Tuesday 1 March 2022
[Judith Cummins in the Chair]
Pensions Guidance and Advice
[Relevant document: Fifth Report of the Work and Pensions Committee, Protecting pension savers—five years on from the Pension Freedoms: Accessing pension savings, HC 237]
I beg to move,
That this House has considered take-up of pensions guidance and advice.
It is a pleasure to serve under your chairmanship, Mrs Cummins. I thank colleagues for turning up after we had a late night last night. We have picked a day when pensions are topical, as we have a tube strike over the very issue that we are talking about.
It is not the Minister’s fault on this occasion.
I do not think the main topic that I am proposing today is one that divides us. I think we would all accept that the problem is that we have a hugely complex pension system. Most people do not really have any understanding of how it works or what their options are, and far too few end up receiving advice or guidance before taking difficult decisions, having probably saved for 30, 40 or more years. They get to the end point and, sadly, do not always understand what they are doing. The huge risk of that situation is that they make a terrible mistake that they could have avoided, which has a detrimental impact on their retirement and reduces their quality of life in their last few years. The real question is what we can do to improve that situation.
We are not here today to talk about the level of pension saving, which is a hugely important topic but one for a different day. We are talking about what we can do to help people who get to the end of their saving journey to get the outcome that they want—the best outcome that they can have with the money that they have. I am not here to criticise auto-enrolment, which has been a huge success. It has hugely improved the situation for many people in work and at least gives them something to worry about when they get to retirement, whereas that would not have been a problem a decade ago. Millions of people would not even have had a pension pot to be thinking about.
Equally, I am not here to criticise the pension freedoms reforms that took place almost exactly seven years ago, which have been a huge success and are hugely welcome. In its recent report, the Works and Pensions Committee accepted that they should stay in place. However, we have to accept that we have a contradiction between the two systems and that we have chosen a way to get people to save pensions by almost tricking them into it, so that they do not realise. They just get defaulted in and do not have to engage, although we wish they would. At the end of that, we now have a hugely complicated system with lots of choices that people are not prepared for, and we need to find a way to prepare them for that, either at some point in their saving journey or when they get to retirement.
This is a problem that is actually getting worse. Statistics show that fewer people than before have taken advice over the last years, and the problem is getting worse because we have more and more people reaching retirement who will not have any defined benefit pension that can provide the majority of their retirement income. In order to ensure their quality of life in retirement, more and more people will be relying on their defined contribution savings and on the decision they make when they hit the age of 50 and get the chance to take a lump sum. It looks like a hugely attractive way to solve their present financial woes, but they do not realise that it makes their future woes a lot worse, having lost a quarter of what they had, which probably was not enough in the first place.
During the pandemic, a lot more working people over a certain age have now decided that they actually quite like being furloughed and have wondered whether they can eke out their retirement savings over a longer period by using the lump sum and not going back to work. It may be a terribly bad decision that they are making. I think the Government are now waking up to the fact that we have lost hundreds of thousands of people from the workforce who could come back but who would quite like not to do so. I am sure we would all like to be able to afford to retire early, but not if that gives us huge financial problems in later life.
I am grateful for the hon. Gentleman’s comments about the importance of pension savings and for his very serious approach to this issue. Does he agree that there is a contradiction here with what the Prime Minister has said about the growth in employment? He may have been somewhat mistaken and inadvertently given a misleading impression that the number of staff on payrolls has increased, but the overall size of the workforce has dropped, as the hon. Gentleman mentioned.
Yes, I think that is right: employment has grown, but participation has reduced. I have spent many years arguing about whether people are in fake self-employment—not really self-employed but being made to be, or pretending to be, because their employers are being unscrupulous or trying to get a tax advantage. Shifting people who were not really self-employed into thinking that they are employed is quite a good outcome—it makes the data more reasonable. The hon. Gentleman is right: we have lost hundreds of thousands of people who could still be working. When there is a workforce shortage, any measure that could get people from those cohorts back into work would probably be good for the majority of them and for the economy as a whole.
To return to today’s topic, Her Majesty’s Revenue and Customs data tells us that £45 billion was taken from pension pots in the first six years of the pension freedoms policy. Some 3.7 million defined-contribution pensions were accessed in that period, and over 2 million of those pots were cashed in full. This is not a problem for the future when defined-benefit pensions start to run off. It is a situation we have seen over the first five years of pension freedoms. It is happening now. Hundreds of thousands of people are accessing their pension pots without knowing what they are really trying to do.
It is worth quickly noting that we still have a problem with the data. The data that we have shows pots being accessed, not pots being accessed by individuals. We do not know whether the data shows one individual accessing 15 different pension pots from 15 different jobs, or 15 different individuals accessing one pension pot each. If we are to have a proper understanding of the situation, we need better data, so that we know what people are doing and what outcomes they are facing. We raised that as a Select Committee on multiple occasions, but we still cannot seem to get that data to be gathered.
The reason for asking for this debate—and what I would quite like the Minister to recognise when he wraps up—is that we have a large problem here. I am sure that the Minister does recognise that; he has said so on many occasions. I would also like the Minister to set out a direction of travel for the regulators and industry. We know that the take-up of pension advice and guidance is far too low—I will come on to the data in a little while. The Minister has made some welcome steps, which will come into force in a few months’ time, but even those steps will not fix the problem or take us to anything like the level that we need. I know that we do not like targets or benchmarks, but perhaps the Government could set an aspiration, an indication of what good practice is, or what the level should be. We need to set an aspiration for the regulators as to what the level of take-up of advice and guidance should be, and we need a plan for how we get there. I will talk through a few ideas about how we could bridge that gap.
If Parliament does not set the regulators a target, benchmark or aspiration—call it what you will—they will flounder, flap around and go round in circles. We need to be clear: “Here is where you need to get to, and here is how long you have to get there; if you do not get there, we will have to take some different measures of our own.” We had a problem during the debate on the Pension Schemes Bill last year or the year before. Amendments were tabled that called for various solutions, and the fact that they were not adopted means that people think that Parliament does not actually want them, whereas that is not how parliamentary debates work. We move amendments to float ideas, and we debate them. The fact that they are not voted on does not mean that we did not want them; it just means that we think that there may be other ways to achieve them. I hope that we can send a strong message today.
I did warn my hon. Friend that I would quote back to him his exact words from debate on the Pension Schemes Bill. His speech on Second Reading genuinely struck me, and to try to beef up the process I revised the specific guidance largely on the back of what he and the Chair of the Select Committee, the right hon. Member for East Ham (Stephen Timms), said. My hon. Friend said:
“I personally would prefer a default guidance appointment, with someone having to sign in blood if they really did not want this free, excellent quality guidance before they could access their money.”—[Official Report, 16 November 2020; Vol. 684, c. 69.]
With respect, that is exactly what the stronger nudge is. We have taken on board the exact comments he made on Second Reading of the Pension Schemes Bill.
I am grateful to the Minister. He did say that he wanted the take-up of pension guidance to be the norm. Even with his changes, which I welcome, the take-up of Pension Wise will increase from a totally inadequate 14% to a really quite unacceptable 22%. I do not know how he defines a norm. I am not sure if there is a written definition of a norm, but I have a feeling that less than a quarter does not count as a norm. In that speech, which I stand by, I said that before they access their pension pot, I want the clear majority of people who have any level of pension savings to have taken guidance or advice.
However, I do not agree that such advice should be mandatory. We cannot put a gun to people’s heads and say, “You cannot have your money unless you sit through this. If you refuse to do it, no matter how long it takes, we’re not giving you your money.” Clearly, we cannot do that, but we can get pretty close to that situation. We need to find processes, techniques and measures that get that percentage up to somewhere much nearer the norm, so that people are not suffering the harm of doing this without understanding the whole landscape of what they are trying to do.
My big concern is not necessarily that people cannot understand the subject, although it is complicated, but that people do not know that there are all manner of uncertainties out there that they have not thought about. It is the “unknown unknowns” that are the problem here.
The beauty of a pension guidance appointment is that it gives people the chance to understand what they do not know, and then gives them the chance to go and find out what they do want to know so that they can make an informed decision. I am not suggesting that we can fix every problem of engagement through an hour or an hour and a half’s pension guidance appointment, but it would give people the tools to get the best possible outcome in their situation.
The hon. Gentleman is making an excellent speech. Further to his point, the need for clear and impartial guidance becomes even more important given the current levels of fraud. We are seeing people defrauded from their pensions and given very poor advice, which means they lose out on their savings, so having clear and impartial advice becomes even more important.
The hon. Lady is absolutely right. It is a sad fact that a small proportion of people, but all too many individuals, have not just made a decision that is not optimal but been tricked into something that has cost them the whole or nearly the whole of what they have saved during their working life, because they did not understand that what they were being promised by the snake oil salesman—the conman—was utterly unachievable.
With some kind of briefing or guidance, they would have had a chance to realise that such an outcome was not possible, that there was no way they would get that kind of return and that such an investment strategy was not remotely sensible. We could have saved them in that situation. We must try to get as many people as possible to take up this service, so that we can put such protections in place and people will have a chance to know that such schemes are not real.
I agree completely with what the hon. Gentleman says. I know I have probably used words that he maybe would not, but does he share my concern about the Minister’s intervention? The Minister effectively said, “I listened to the hon. Member’s speech. We are doing a stronger nudge—job done; nothing to worry about.” Is that not complacent?
I would not use that word. It is a little unfair on the Minister, who has put in place some measures that have not yet come into force, to say that he is being complacent. I urge the Government to see those measures as part of the set of solutions we need.
The Government’s role is to set the aspiration for the level of take-up that we need, so we can then judge the success of their policies. It is a slightly strange situation and we had some rather baffling evidence sessions with the regulators during the recent Work and Pensions Committee inquiry. Everybody accepts that the take-up is not high enough and we should do more, but when asked, “What ought take-up to be?” they say that they do not know and do not have a number. So we know that what we have now is not good enough, but we do not know what is good enough, and therefore we cannot tell when we are going to get to good enough.
It is a slightly strange way of running a strategy, an organisation or a service to not know what is good and what you are aiming for, but to start trying to aim for it in the hope that you might get there by luck. We need a direction of travel, and someone to say, “We think the right target is 60%.” That is the number we had in our Select Committee finding and it seems quite reasonable. We are not asking for 100%, which would not be practical or useful, but we could set that kind of guide.
My hon. Friend is talking about guidance on its own, but 55% of pots over £10,000 are accessed after taking guidance or advice, and above £100,000 the figure is 74%. Surely on those two, the stats are better, with respect, than he is purporting to suggest, and we must look at this in the context of some people taking advice as well.
Absolutely. We hope that more people will take advice and have a properly informed situation, rather than just relying on guidance, and I accept that we want to look at those two things in aggregate. The problem on the numbers the Minister is quoting is that there is still a huge gap in respect of the, I think, 45% of people who have not had advice or guidance. My fear is that they are the people about whom we are most concerned: those with some retirement savings—not a huge amount, although not a very small amount—for whom, if they do not make the right decision and understand all the parameters they are dealing with, there could be a material impact on their retirement.
Should we worry so much about those with a £1 million pension pot? They are probably the ones who are taking advice in the first place. For people who have really a very small amount, there is probably not much that they will be able to do differently after they have had the guidance than take it as a lump sum. Are we to think it is okay that we have 45% of people who in the scheme of things have a relatively small amount and who could, by getting this wrong, materially harm their retirement, and that we do not have a plan for how to close that gap? I am not sure that that is a position I would want to take.
This shows that we have a problem here, and we need to find ways to try to fix it. The Minister is getting defensive, but I hope that when he speaks later he will accept that we need to close that gap and that the measures that will come into force in a few months will not be sufficient to close it. We need to look at different ways—
I am not being defensive; it is just that I do not think that we can look at this matter solely in the context of stronger nudge. We have to look at it in the context of, obviously, the work done with the pension schemes legislation, with the dashboard coming next year; the accumulation pathway, with collective defined contributions coming in; the awareness campaigns, which we are beginning to boost; simpler statements and so much more. Stronger nudge is just one element of about six to eight measures that we are taking to address the problem that my hon. Friend raises, and I accept that he is right to raise it.
I am grateful to the Minister. There is a danger, or there will be if we are not careful, of us starting to disagree on the fundamentals, whereas I thought we had a broad consensus of agreement that we needed to find a way to go further on the issue. Sir Hector Sants chairs the Money and Pensions Service, whose job it is to deliver financial advice and support to people around the country, and even he agrees. Sir Hector said that
“the vast majority of people, left to their own devices, will probably make a poor decision.”
The problem we have is that a large number of people—unless we are able to convince them to take some kind of guidance or input—are at risk of making a very poor decision that they will not be able to reverse. This is not like taking out the wrong mortgage, which people can change after two years. If people take out the wrong pension, they are stuck with it for the rest of their life. It is not fixable if someone has bought the wrong product.
I accept that all manner of other moving fields around the pension situation all have to come together, but if the Minister was saying—I am sure he was not—that the combination of a slightly-easier-to-read statement that gets sent out once a year, and which might or might not get sent out at the same point and that has some advantages, and the creation of a dashboard, which we hope people will engage with and look at regularly, will fix the fundamental problem of our having a pensions system that is hugely complicated and that people do not engage with or understand, even though they will have to make a difficult decision at some point, I am not that optimistic that we will get such a level of engagement through people’s saving journey that they will not need some input before they make their decision.
When we introduced these freedoms—I was on the Select Committee seven or eight years ago—we said yes to providing those freedoms, but the big ask was, “Are we going to help people on that journey?” I am perhaps a little disappointed that the solution that the then Government came up with was the Pension Wise service. At that point, the Government and the regulators expected huge take-up, and we were worried about the service being swamped and unable to cope, but we have found that Pension Wise has exceeded all expectations—except one. The feedback from people who use the scheme is hugely positive, as is its impact on their understanding of the pension landscape and on the decisions they go on to make. The one expectation it has not met has to do with take-up, which is nothing like what it was. In evidence sessions on pension schemes, people were saying that we might get 75% take-up, but we are stuck in the low teens, and the figure has been falling in recent years.
It is slightly incongruous: we introduced a policy of pension freedoms, recognised at the time that the situation would be difficult for people, and put in place a new guidance system to help them. We thought there would be huge take-up, and said that its use should be the norm. A few years on, the position has got worse, and we have more people retiring with only DC pensions—people who need this input. We have this huge gap in take-up, but think that is probably okay, because there are a few things online that people can find. That is a challenge. We need a sense of urgency and direction, so that we can hold the regulators to account for achievement.
I am grateful to all who helped me prepare for this debate and sent me useful briefings, particularly the House of Commons Chamber Engagement Team, which conducted an online survey of people’s lived experience. That chimed with what we see in our constituency casework and in evidence to the Select Committees. It is clear that people do not understand the situation and do not feel well informed during their saving journey, and then have problems over time.
One quote is from Charlotte:
“Guidance and advice is not provided in my workplace, unless you are almost at retirement age, which is way too late.”
“I have tried researching the information online but I find it very confusing.”
Anne, a constituent of mine, said:
“The Government should arrange pension roadshows to assist people with enquiries etc. Employers should hold pension surgeries and ensure guidance is available. There isn’t enough signposting and guidance in place.”
The evidence is pretty clear: there is a gap, and we need to fix that. What are the solutions? The Minister dragged me into talking about solutions earlier than I had planned; I was articulating the problem. Data on the size of the problem shows that HMRC received about £2 billion more than forecast in the early years of pension freedom as a result of people accessing their pensions. That is likely because people took the whole of their pension, as they now can, and became higher-rate taxpayers for the only time in their working life. That was a hugely foolish decision, giving the taxman 20% of their pension. That would not have happened if the pension had been taken out in a smooth way over years.
I am sure the Government do not want that benefit, but that £2 billion was a third more than was forecast. That suggests that something has gone wrong, and that people have not been making the wisest decisions. A Nobel- prize-winning economist has described working out what to do with a pension as
“the nastiest, hardest problem in finance”.
Nobody knows how long they will live, and many people assume they will live fewer years than they do, and end up with the horrible risk of running out of money.
I will move on to the argument the Minister was keen for us to have about how to improve the take-up of Pension Wise advice, and issuing appointments automatically or by default. I am asking for what the Select Committee asked for in its recent report: for the regulator to undertake trials on how to improve the take-up of pension guidance. We are not asking for tens of hundreds and thousands more appointments, and huge costs. We accept that, even with a stronger nudge, we will not get the figure high enough. We could give people an even stronger nudge and look at some of the options. Those include writing to people when they turn 50 or are approaching state pension age to say, “We have made you an appointment with Pension Wise at half-past three on such a date,” and giving them the chance to change the appointment. Or we could go back one step and say, “In six months’ time, you’ll hit state pension age. Before you can access your pension, you need a Pension Wise appointment. Here is the booking number.” There could be other combinations; for example, the pension provider could make planned appointments.
Whatever the trials and the options we look at, we are trying to work out whether giving people an appointment —a real kick—increases take-up, especially in the hard-to-reach groups that are not using the guidance service. I would have thought there were enough good-quality pension schemes out there that are keen to help their members and that would be willing to participate in a trial with the regulator, who could agree the rules and set the parameters. We could do that for a few thousand people on a representative basis.
The Treasury Committee got a letter on 16 February from the Financial Conduct Authority about the trials and how they have been designed. I wonder if the hon. Member shares my disappointment that it said,
“We are still in a design phase and have not yet determined all these details. Some of the answers to your questions will depend on further work.”
It does not feel as though there is a sense of urgency about the issue.
I agree. We had the regulator before the Select Committee, and initially she was quite resistant to do anything beyond giving the stronger nudge that the Minister had provided for, because she did not think Parliament wanted that. We should send the message loud and clear that we want to trial these things and see if they result in higher take-up. None of us would want people at Pension Wise to be sitting around at the end of the phone, waiting for calls, which are not coming in huge numbers, if they were providing something that people really do not want; but people who take these appointments value them, and find them useful. There are all manner of ways that call centres around the country handle unpredictable volume. They know what the take-up will be, and then plan everything with their staff; they move calls around so that they can handle surges in volume, or manage dips in take-up.
I am not saying to the Minister, “Bring in legislation to require a pension guidance appointment for every single saver approaching retirement. Resource Pension Wise to provide that that. Hey, if no-one turns up, it’s just money being lost.” But let us trial things that go beyond what he has already agreed to do, so that we get the take-up we all think we need. If people are not turning up, we will accept that it does not work. If people are turning up totally unengaged, and are there just because they think they have to be and have not bothered to do any research on their own finances, and it is a completely pointless conversation, we will accept that the automatic appointment system does not work. However, if we find, as I suspect we will, that it boosts take-up among the harder-to-reach people, let us roll it out more widely, because we can demonstrate the value of it. If we do not trial any of these things, we will be sitting here in a few years’ time with more people having suffered detriment, and we will be scrabbling around for ideas. We will not have the evidence, because we will not have trialled anything. That is all I am asking the Minister to do.
Another idea we have for improving the outcome is moving the line when it comes to what is advice and guidance, and giving better guidance to the pension schemes about what they can tell their members—what common-sense information they can give people about their options. I am slightly cautious on the latter point, because one of the arguments in favour of pension freedoms, and one of the big problems with the annuity market, was that savers were just defaulting into buying the annuity from their incumbent pension provider, and were not shopping around and understanding their position. They could have got a far better outcome if they bought an ill health annuity, or if they went to a different provider. I do not think we can say that the solution to this problem is for an incumbent pension scheme to tell members what four default pathways they have, and to see which one they want to pick.
Some kind of independent, impartial input should be available to savers, so that they know they can shop around and look elsewhere. The place that is the main contact with the saver should be able to give them useful information, and should be required to give them more useful information than they already do. We should find a way for the regulators to move the line, change the guidance or give some examples to schemes, or give schemes reassurance that they are not breaking the financial advice regulatory rules when giving people what is basically common-sense advice. That would be hugely helpful. If we can, we should reform the system—that is the best way I can put it—so that people do not have to incur the full cost of regulatory advice, which is usually thousands of pounds, and so that we can give people more tailored, individualised guidance on the best option for them. That would be a huge advantage.
It is clear that simple Pension Wise guidance is not the journey’s end that people want. They want something individualised. We need to find a way of making that easier and cheaper for them to get, while keeping it safe; we do not want people being led into buying a product by what they thought was impartial guidance. Making those improvements could give us a dramatic improvement in the situation.
I have spoken for longer than I was expecting to, so I will conclude my remarks by reiterating that I do not think that this issue divides us. We all recognise that we have a problem. We welcome the measures the Government have taken to improve the situation, but I urge the Minister to accept that he needs to go further. We need the regulators to take more action. I urge them to take up the relatively straightforward and low-cost trial options that are out there, so that we can see if we can get a better outcome, and can get more people using a high-quality, free, low-risk guidance service. There is literally no downside to people using it; it is a crying shame that it is not used more. That is all we want to see from this debate.
[Hannah Bardell in the Chair]
It is a pleasure to serve under your chairmanship, Ms Bardell. I will not repeat the excellent points made by the hon. Member for Amber Valley (Nigel Mills), but I echo many of them. The need for good pensions advice is real and pressing. Nobody jumps out of bed in the morning wanting to think about their pension—apart from everyone here, of course, who did that this morning. It is not top on their list of priorities, but it really matters.
Pensions advice matters more as we see the impact of the increased cost of living. More pensioners are falling into poverty and having to choose between heating and eating. The need for an adequate pension is even more pressing. My interest in this debate comes primarily from my role on the Treasury Committee, where I have taken a particular interest in this subject. In my intervention on the hon. Member for Amber Valley, I referred to the letter from the Financial Conduct Authority to the Chair of the Select Committee of 16 February about what a stronger nudge could be, and about trials to improve take-up of impartial pensions advice. My only criticism was the sense of a lack of urgency. There was a lot of, “Well, we are still in the design phase,” “We could try this,” and “We could try that.” There was nothing concrete.
One point that I would love the Minister to take away is that we need to push the FCA and say, “We want you to firm this up. What exactly will you do? When will these trials take place? When will you have a deadline for designing them?” It feels as though they are using warm words but not taking concrete action.
Obviously, pension decisions are complex, even for the well-informed saver. I have heard that many of us will end up with four or five pensions before we reach retirement, and people are having to try to work out the best advice when they are dealing with these many different pension pots. Gone are the days when people stayed in one career all their life and then retired. This added complexity really matters. I did a Facebook Live session on the subject and, believe it or not, members of the public did engage and were quite interested in the issue. They were particularly interested in how they find out where their missing pension pots were. That was another question that came up, which shows that people do not truly understand this subject.
As I mentioned in my intervention, the lack of high-quality advice leads to people being defrauded, which is heartbreaking. They are not just receiving poor pensions advice; they are being tricked and defrauded. That makes getting impartial advice even more important. We can say to people, “Don’t listen to these charlatans who are trying to steal your pensions. Go to this impartial advice service.” I truly do not think many people know that it is there. The feedback from people who use it is that it is a very positive service that gives really good advice. It makes people feel more informed about how to make their decisions. The difficulty, of course, is that if someone does not know the service is there, they will not go to it for advice, and then they are much more vulnerable to making poor decisions.
I want to mention issues that I will talk a lot about in future: the poverty premium and the hidden costs of poverty, and financial inclusion. It is relevant to mention them in this debate on workplace pensions because the Financial Inclusion Commission estimated in January last year that around 8.5 million workers were excluded from automatic enrolment in workplace pensions because they worked in the gig economy, were part time, and earned too little. Those workers tend to rent their homes,
“and will have little in the way of savings or other assets to draw on in retirement…In addition, employees who are eligible for automatic enrolment may not engage because they…don’t feel they can afford to make contributions out of their income”.
That is another of my concerns. I am hearing from residents who are choosing to opt out of pension contributions because of the cost of living. They do not feel they can afford things day to day, so they do not want to continue making pension contributions, and that is a huge worry that brings to the forefront the fact that everybody needs advice when making such decisions.
Nurses tell me that they are opting out of their pensions. I have tried desperately to convince them that the NHS pension is great, and have asked them to please stay in it, but people are deciding to opt out right now. Partly, they do not fully understand the consequences of the decisions that they are making today. That is why we need to ensure that there is excellent advice. I see that my right hon. Friend the Member for East Ham (Stephen Timms), the Chair of the Work and Pensions Committee, is here, so I will not go into the detail of the Committee’s recommendations.
It is good to see you in your place, Ms Bardell. My hon. Friend is making an excellent point about the very real difficulties facing so many families. Does she agree that she is, in part, referring to the wider cost of living crisis and its worrying knock-on effects on many, many families? They feel forced to make these terrible decisions because they are struggling to get to the end of the week as a result of rising heating and fuel bills.
My hon. Friend is absolutely right. The message that we would like to get to those who are making savings is: “Do not do it by not contributing to a pension, because you will need that money in future.” That is why we need important, impartial advice.
I am not a pensions specialist. I am just somebody with a keen interest in the subject because I see what happens to too many people when they go into retirement without the pensions that they need, and I see what happens when people are given poor advice and are defrauded. People just do not understand. They choose to take the lump sum today, not realising it pushes them into a higher tax bracket, and not realising the consequences for their future income. They just do not fully understand all the decisions. I truly believe that if we give people better advice, they will make decisions that mean we will, hopefully, have fewer people in poverty in future.
As I said, I was disappointed by what the FCA said in evidence to the Treasury Committee. We need the firm and clear message from the Government that they will get on with the trials. They should not spend any more time messing around with them. That is a priority; it would help get the situation moving more quickly.
It is a pleasure to serve under your chairmanship, Ms Bardell. I congratulate my hon. Friend the Member for Amber Valley (Nigel Mills) on securing this debate. I was not going to speak today, but felt compelled to do so because I was so impressed that there was yet another debate in this House on the pension fund industry. It is a fantastic thing. Since leaving the fund management industry in 2019 to start this new job, I have been struck by how infrequently we discuss pensions and savings, yet it is so important to all the things that we care about across the House.
We should not forget that Britain is a global leader in pension fund investing. We are one of the largest pension fund markets in the world, with £3 trillion under investment. Some £9.9 trillion is invested through the City of London and fund managers like my old shop. I can tell all Members present that the industry is full of some fantastic advisers and investors, and some of the brightest and best minds in the world.
However, we clearly have some issues that we need to tackle. My hon. Friend the Member for Amber Valley highlighted many of them—maybe too many for the Minister’s liking. In my region, the east midlands, 69% of people who are investing in a pension do not receive advice, so there is a problem. I want to talk for a couple of minutes on how we can tackle the root causes, because we do not have an adequate culture of savings in this country, and I believe that starts from the very beginning of people’s working lives. I will offer a few suggestions as to how the Minister could address the problem in future Bills.
First, let me say that the power of our pension market is astronomical, tackling the things that we all care about. Whether it is levelling up our communities in Leeds, Hull or Grantham, or building infrastructure, our pension funds have the power and capital to do it. If we want to tackle climate change, unlocking pension assets to invest in renewable energy is vital. We can also do more to help younger people get on the housing ladder. The New Zealand Government introduced KiwiSaver, which allows young people to dip into their pension pot to put down a deposit to buy a first home, and there is more that we can do to unlock pension assets and tackle the things that we all care about.
However, the reality is that 12 million people in this country are under-saving, putting at risk their safety and security in older age. What can we do about that? First, we need to get people saving at an earlier age. We can do that by building on the success of auto-enrolment, which has seen 10 million additional people saving into a pension fund. I do not think they are being tricked; I think it is raising awareness of the importance of saving. That has of course been a cross-party effort. Auto-enrolment was introduced under a Labour Government in 2008 and brought forward by the Liberal Democrat and Conservative coalition in 2012. It is an example of what we can do when we work together. Let us expand auto-enrolment to 18 to 22-year-olds and start them saving earlier. Of course, it is that age group of people who will benefit most from the compounding benefits of saving.
I am sympathetic to the Social Market Foundation report on this very subject of advice on the use of technology. We can use technology and encourage fintech entrepreneurs to develop technology to enable people to view their pension pots and investments a lot more clearly. We should get behind the efforts of the Minister and the Government to give a stronger nudge towards pension guidance, which will be much more important than Members have said in the debate so far.
I am struck by the number of job adverts in this country that do not mention pension contributions, even though they can contribute about a third of total take-home income. When a job advert goes out, often it states the salary but not the contribution to a pension, which is bonkers. If we could change that somehow, it would encourage people to be much more mindful of how the jobs they are taking can contribute to their retirement.
Finally, there are things that we can do to make pension saving much more practical in meeting young people’s challenges. The No. 1 challenge for a lot of people in Grantham and Stamford, which I represent, is buying a house, and the Minister could look at that.
I applaud my hon. Friend the Member for Amber Valley for securing the debate, and I am grateful to the House for letting me speak.
I start by congratulating the hon. Member for Amber Valley (Nigel Mills) on securing the debate and on his opening speech.
There was a serious flaw in implementing the pension freedoms. They were announced by George Osborne in his Budget speech in 2014 and implemented the following year. He said in his announcement that
“no one will have to buy an annuity. We are going to introduce a new guarantee, enforced by law, that everyone who retires on these defined contribution schemes will be offered free, impartial, face-to-face advice on how to get the most from the choices they will now have.”—[Official Report, 19 March 2014; Vol. 577, c. 793.]
It was a very clear recognition of the risks involved in people having much more latitude over their pension savings—often the largest sum of money they will ever have access to—and that the Government needed to ensure that everyone had guidance to help them make sound decisions. However, that guarantee has never materialised, and the hon. Member for Amber Valley was absolutely right to say that hundreds of thousands are accessing their pension pots without understanding what they are trying to do.
We do have the Pension Wise service, which is excellent. It is free and impartial, as George Osborne promised, and as the hon. Member for Amber Valley said, it gets very good ratings from those who use it—the problem is that very few people do. As my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) rightly said—I apologise to her for being absent for some of her speech—one of the reasons why Pension Wise is important is so that people can avoid being scammed. In June 2015, I received from the Treasury the answer to parliamentary written question 2227, which said that
“Pension Wise was launched to help people understand their options when taking advantage of the pension freedoms, including how to spot and avoid scams.”
Over the past seven years, there has been a very big phenomenon of pension scams that it is in everybody’s interest to prevent. So the default should be that people get a Pension Wise appointment.
Is the Chair of the Select Committee as concerned as I am that, despite Pension Wise being an excellent service, the number of Pension Wise appointments is actually falling? There is real concern here, which is why many of us want to see auto-appointments.
The hon. Gentleman is absolutely right.
The importance of guaranteeing guidance was stressed repeatedly, not just in George Osborne’s announcement but by the Government in the couple of years afterwards. The Treasury’s public financial guidance review, published for consultation in March 2016, said:
“Guidance is vital to ensure that individuals are fully aware of their options before they make a decision on what to do with their retirement savings”.
The hon. Member for West Worcestershire (Harriett Baldwin), who was then Economic Secretary, said in April 2016 that the Government were introducing
“a requirement that, in effect, ensures that consumers with a high-value annuity receive appropriate financial advice before making the decision to sell their annuity”.—[Official Report, 19 April 2016; Vol. 608, c. 876.]
In April 2018, her successor—the current Economic Secretary—the hon. Member for Salisbury (John Glen), said that before proceeding with an access or transfer application,
“subject to any exceptions, schemes must ensure that individuals have either received Pension Wise guidance or have opted out.”—[Official Report, 24 April 2018; Vol. 639, c. 831.]
That commitment, which the Minister appeared to believe he was delivering four years ago, has never been delivered.
The Treasury has very good reason to be concerned that people should make sound decisions in this area, but so does the Minister’s Department. Baroness Buscombe, when she was a Minister at the Department for Work and Pensions, said in May 2018 that
“We all want people to make more informed decisions and to make it the norm to use Pension Wise before accessing their pension.”—[Official Report, House of Lords, 1 May 2018; Vol. 790, c. 1995.]
Let me quote back to the Minister what he said in a debate on the Pension Schemes Act 2021, that Pension Wise should become the norm. He has since distanced himself a bit from that view, but he did express it: on Third Reading, I said that I was sorry he had not followed Baroness Buscombe and expressed the view that Pension Wise should become the norm, and he intervened on me to correct me. He said:
“I do—I said so.”—[Official Report, 16 November 2020; Vol. 684, c. 136.]
I responded to his intervention by welcoming the apparently universal agreement that taking up Pension Wise guidance should be the norm. Everyone agreed, but in October 2020, the Department published the “Stronger Nudge to pensions guidance” statement of policy intent, which said that the new nudges that would be introduced would increase take-up from one in 33 to one in nine. The most recent figures quoted by the Social Market Foundation last week suggest that take-up now stands at about one in seven.
As the hon. Member for Amber Valley said, the expectations at the start were way higher than that. Michelle Cracknell, the then head of the Pensions Advisory Service, which was subsequently absorbed into the Money and Pensions Service, said in evidence in October 2014 that
“ambition is that the take-up rate will be very high, with over 75% of people taking the guidance”,
but that it might only be 25% to start with. In fact, it has never got anywhere near 25%, let alone 75%.
The Committee’s concern about Pension Wise take-up is long-standing and goes back well before I became Chair, to the period years ago when the hon. Member for Amber Valley was a member of the Committee. The Committee’s 2017 report stated:
“Free and impartial Pension Wise guidance, provided by telephone or face-to-face appointment, is greatly valued by those who use it. Take up, however, is not high enough.”
The report went on to point out that
“the existing Pension Wise promotion regime”
It is a very good service: nine out of 10 of those who use it report high or very high satisfaction—that is a pretty impressive—but it is hidden away from most people. The default ought to be that people get an appointment. That is why the Committee has recommended at least trialling automatic Pension Wise appointments.
Sir Hector Sants, the chair of the Money and Pensions Service, told the Committee in March that 72% of people change their mind about what they will do with their pensions savings as a result of talking to Pension Wise. As he pointed out,
“that tells you that the vast majority of people, left to their own devices, will probably make a poor decision.”
As far as I can see, the Government’s current policy will leave the great majority of savers in exactly that position.
We need to do more. Government and regulators need to end their indifference on this. We need at least a trial of auto-enrolment into a service that enables better outcomes from pensions savings. There will no doubt be difficulties, but let us at least try it out. The Money and Pensions Service has told the Committee that it would be very happy to support a trial.
The Committee recommended that
“the Government sets a goal for the Money and Pensions Service for the combined use of Pension Wise and paid-for advice when accessing pension pots for the first time”
“at least 60 per cent”.
The Minister suggested in his intervention that he thinks use might not be far from that level at the moment, so let us use that as a clear goal. The Committee also recommended
“that automatic Pension Wise appointments are trialled.”
“two trials: one with an appointment when a person accesses their pension for the first time and another at the age of 50, before they can access their pension savings.”
I commend those proposals and recommendations to the Minister.
May I start by wishing you a return to full health and strength, Ms Bardell, so that you are able to play football again? At the moment, it is quite unlikely that you are able to. It is nice to see you here.
It is a pleasure to hear the hon. Member for Amber Valley (Nigel Mills), who I thank for securing the debate. It is no secret that I am totally sold on the pensions issue. I know its importance, and I have expressed that in previous debates. As a teenager, I was encouraged by my mother—you never say no to your mum—to take out a pension at a very early age. Obviously, over the years, we have taken out a few others as well. There is no doubt in my mind that, in these uncertain times, it is more important than ever that people ensure not only that they have a pension, but that they have the one that works for them.
I am pleased to see the Minister in his place. I know that, like me, he is sold on this issue. We can see from his earlier response that he is energetic and keen to respond to hon. Members’ questions.
I did a quick round robin in my office among the six staff I employ. Of the six, only two actively check their pensions—one personally and one with her financial adviser. I thought having a financial adviser was quite impressive. Some staff are obviously very aware of the future. The other four members of staff, ranging in age between 20s and 40s, have no knowledge of what to do with their pensions. I think that is query. They have a pension—that is good news—but they have no idea what it really means. That is the question and that is the thrust of this debate.
Without a UK-wide perception of the importance of pensions, we may be in trouble. People must be aware that it is not enough to know that they have a pension; they should be aware of what it is and actively try to understand what it will do for their future.
I received a detailed briefing from Just Group, which highlighted that, as noted by the Financial Inclusion Commission in January 2021,
“pensions have largely been absent from the financial inclusion debate—even though they are a major factor in ensuring people are financially and socially included in retirement.”
The concepts, terms and associated risks are unfamiliar to most, which creates risks for savers when research shows that the complexity of related decisions is high and the familiarity with the products, options and processes is so low.
I am trying to make it a tradition to always intervene on the hon. Gentleman in any debate. I feel that Parliament is better when he intervenes, so I have decided that I will always try to intervene on him. The hon. Gentleman raised the point that pensions are not part of the financial inclusion debate—I look forward to appearing in front of the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) tomorrow, sort of. [Laughter.] The serious point is that the financial inclusion forum, which was set up after the Financial Guidance and Claims Act 2018 was brought in, specifically has Ministers from the Treasury and the Department for Work and Pensions working together. While it is not the main event—I totally accept that—there is no doubt that a real effort has been made. I would urge those who doubt my comments to look at the specifics of the reports of that financial inclusion forum.
I never doubt the Minister’s commitment to do what he says; I am sold on it already.
The Government created Pension Wise in 2015 as a free, impartial guidance service for people to use before accessing defined contribution pensions under the pension freedoms policy. There has been a lot of change in policy direction. The service was intended to enable informed decision making and has received consistently excellent feedback. User evaluations found that 94% of Pension Wise appointment customers were either very or fairly satisfied—at 77% and 18% respectively—with 97% saying they had already recommended or would recommend the service to others. That is good news for Pension Wise, but it also leaves people more informed and better equipped to avoid pension scams than non-users.
However, Pension Wise usage remains low and has actually fallen over the last three years. I do not think that we can ignore that. FCA data shows that the number of DC pension pots accessed after Pension Wise was used fell from 94,744 in 2018-19 to 94,274 in 2019-20, and down to 81,805 in 2020-21—a 14% reduction. We cannot ignore those facts. Perhaps the Minister will tell us how we can energise that again. Similarly, the number of pensions accessed via a regulated financial adviser fell by 4% in that period. That is important because Pension Wise provides an opportunity for savers who do not access financial advice to at least understand their options and speak with a professional who can impart key, relevant information, answer their questions and correct misunderstandings. However, the FCA data confirmed that hundreds of thousands of savers are accessing their pension benefits each year without first using Pension Wise, even though appointments are available for free. We must reach that mindset and change that.
There is clearly a massive breakdown in communication with our working people regarding pensions and the fact that they should have an active role in that respect. There is a fear concealed behind the attitude of my younger staff, which we should perhaps look at, that they “don’t do finance”—those are their words. When I asked whether they had ever topped up their pension with additional money in their account, they looked at me blankly and asked, “What does that mean?” We must get the message across, beginning in schools and throughout working life, that pensions are not something to be scared of.
Ms Bardell, you have been kind with your time, as have other hon. Members, so I will conclude with this point. A pension is a part of life, in preparation for the hopefully happy days of retirement—hopefully people will all see that. However, what will add to that happiness is a working pension that can provide when we cannot and do not work. We all have a part to play in that. I look to the Minister, as I always do—I know that he understands where I and others are coming from—to outline how we can get the engagement that is apparently, for some, missing.
It is a pleasure to serve under your chairmanship, Ms Bardell. I congratulate the hon. Member for Amber Valley (Nigel Mills) on bringing this debate forward. I know that he has followed this issue for some time, always with diligence and concern for the outcomes experienced by pension savers. I also thought that he spoke very well in the recent social security benefits up-rating debate.
The hon. Member set out clearly how complex pensions can be and the need, therefore, for people to access impartial advice to get the best outcome from the pensions that they have worked hard to save for over their lives. His final point was that if we do not run a trial of auto-appointments, people will continue to make the wrong decisions and be at risk of being scammed, and there will still be no evidence of the value of auto-appointments.
We also heard good contributions from the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy), from the Chair of the Select Committee, the right hon. Member for East Ham (Stephen Timms), and from the hon. Member for Grantham and Stamford (Gareth Davies)—and no debate would be complete without the hon. Member for Strangford (Jim Shannon). The hon. Member for Kingston upon Hull West and Hessle and the right hon. Member for East Ham both spoke about the risk of people getting scammed, and we need to remember that. What could be more heart-breaking than working hard all your life, looking forward to a comfortable retirement, and then being scammed out of your lifetime savings? It is awful.
Another thing I would like to draw the Minister’s attention to that needs to be addressed is that there are people who give the wrong advice or scam people, and then set themselves up as a claims management company to advocate for the people who just lost their money. That needs to end. The Government must put regulations in place to stop these people reinventing themselves as claims management companies.
A constituent of mine who is a financial adviser highlighted that her fees as a regulated financial adviser are going through the roof, so people are accessing unregulated advisers who do not pay those fees and can undercut the people providing real advice. That is another subject the Government need to address.
The Select Committee, of which I am a member, has heard evidence from the Association of British Insurers, the Pensions and Lifetime Savings Association, the Financial Inclusion Commission and Age UK, which all say that there should be an evaluation trial of auto-appointments as a means of increasing take-up of pension guidance. They are correct, are they not?
My hon. Friend is right; I was going to come on to that. When the industry and all those bodies are saying that there should be a trial of auto-appointments, it is not controversial, and is something the Government should embrace. It was a Conservative Government that set up the Pension Wise advice system as a complementary service to the pension freedoms legislation, so it surely makes sense that the Government want to ensure that as many people as possible access impartial advice.
According to the Association of British Insurers, over £42 billion has been flexibly withdrawn since 2015, but just 14% of defined-contribution pension pots are accessed after the use of Pension Wise. We are talking about potentially billions of pounds being accessed with a high risk of it not being utilised properly for maximum gain. As the hon. Member for Amber Valley pointed out, people might make decisions that suddenly mean they are in higher tax bracket for the first time in their lives. Simple advice would remedy that.
Realistically, those figures should make the Minister sit up right away and pledge to take action. As others have highlighted, Financial Conduct Authority data confirms that the use of guidance and advice has actually decreased in recent years. Again, that should be an urgent call to action for the Government.
In March 2020, the chairman of the Money and Pensions Service, Sir Hector Sants, told the Work and Pensions Committee:
“A significant number of the people who contact Pension Wise will come away saying that, after having spoken to our guidance service, they have concluded that they should do something different from what they had in mind in the first place… There is a figure that suggests that 72% of people are saying they have changed their mind about what they will do as a result of talking to our guidance service. In a way, that is a simple statistic that tells you that the vast majority of people, left to their own devices, will probably make a poor decision.”
Again, £42 billion has been accessed since 2015, but 72% of the small number of people who received advice ended up making different decisions following receipt and consideration of that advice. The level of cash that is being accessed, with poor decisions possibly made on the back of that, is frightening—and, of course, some people are being scammed altogether.
The chairman of the Financial Conduct Authority, Charles Randell, made the following observation when asked about the adequacy of regulatory policy when he gave oral evidence to the Treasury Committee in November 2020:
“This issue about people making poor choices when exercising the freedoms and responsibilities that have been put on them in the last 10 years, through a variety of changes in Government policy, is probably the one that I worry about most of all.”
Does the Minister not share these concerns? I am concerned that he does not. I welcome the fact that the right hon. Member for East Ham highlighted comments that the Minister has made previously that he does not seem to be holding true to. Is the Minister blind to these concerns that everybody in the industry is raising?
The other crucial aspect in all this is that, for those who have used Pension Wise, it has been deemed a success. When the Government have a success story that they can relay, why are they not trying to build on it and enhance it? The 2019-20 Pension Wise user evaluation found that 94% of appointment users were very or fairly satisfied with their overall experience of Pension Wise; 88% of appointment users said that Pension Wise helped to improve their understanding of pension options; and 70% of Pension Wise users correctly answered eight true or false statements relating to their pension options, compared with 43% of non-users. That last statistic is proof of the additional knowledge gained by accessing impartial advice.
In contrast to the evidence gathered since 2015, the Government’s approach to non-advised savers seems to inhabit a space somewhere between “fingers crossed it’ll be okay” and “if savers stuff it up, that’s their own fault”. Again, that brings me back to what the hon. Member for Amber Valley outlined about the known risk that affects savers; he put it well.
Currently, 19 million people are at various stages of their defined-contribution pension journey. Their retirement outcomes depend, first, on the generosity of their employer’s pension offer and, secondly and critically, on the decisions they make at the accumulation and decumulation stages. If a saver has contributed to pensions for over 40 years, surely it is right that the system does all it can to ensure that they take as little time as 40 minutes for a guidance appointment.
The Minister’s response to this issue of low take-up of guidance and advice has not been to address it directly but instead to point to the “stronger nudge”, as he did earlier, or to other pet projects such as mid-life MOTs and pension dashboards. They are measures that I support, but they are not available in the here and now, whereas Pension Wise is. As for the stronger nudge, the FCA and his own Department admit that, on the basis of trials to date, it is unlikely to have a dramatic effect on guidance take-up. Indeed, the trials suggested that there would be an increase of only 8% in the take-up of advice, so that clearly is not the solution.
Once again, I ask the Minister and the Government to commit to a trial of auto-appointments. Two trials could be considered: one with an appointment when a person accesses their pension for the first time, and another—this idea came from the Select Committee—with an appointment at the age of 50, before someone can access their pension savings, which is the kind of mid-life MOT that the Minister supports. Piloting an auto-appointment system for the Pension Wise service is a clear recommendation of the Work and Pensions Committee, and the Association of British Insurers supports it too.
The Committee also recommended that the UK Government should set a goal of at least 60% of people using Pension Wise, the Government guidance service from MaPS, or receiving paid-for advice when they access their pension pots for the first time. Meeting such a target would see billions of pounds being accessed in a way that minimises the risk of poor decision making by people who are not used to assessing such sums of money.
Will the Minister confirm, once and for all, that he supports a trial of auto-appointments, as recommended by the Select Committee and the industry? It is a no-risk option for the Government to implement. Will he confirm the timescale for such a trial? If not, will he say why he is ignoring the advice and why he is willing to allow people unwittingly to continue making bad decisions with their pension pots? If they are accessing that money and using it for the best means possible, it should be able to support not just them but the wider economy better.
It is a pleasure to serve under your chairship, Ms Bardell. I pay tribute to the hon. Member for Amber Valley (Nigel Mills) for what I thought was a very thoughtful and knowledgeable speech, which has left us all with a great deal of food for thought.
I also thank the Chair of the Select Committee, my right hon. Friend the Member for East Ham (Stephen Timms), and Members across the House, in particular my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) and the hon. Members for Strangford (Jim Shannon), for Kilmarnock and Loudoun (Alan Brown) and for Glasgow South West (Chris Stephens). In addition, the hon. Member for Grantham and Stamford (Gareth Davies)—I beg his pardon—spoke with great knowledge of the sector; I appreciate his detailed explanation.
I do not want to completely rehash or repeat points that have been made by colleagues, but I want to focus the Minister and ask him for a response on one or two very important things. First, however, we should acknowledge, seven years on from their introduction, that while increased pension freedoms have brought greater flexibility, they have also resulted in a potentially greater degree of risk. Although advice services such as Pension Wise have played an important role in making advice more available, the service’s own figures show that just 14% of savers are accessing that advice. That really is not good enough.
Clearly, most people will make a decision about their pension—a decision of this scale—only once in their lives, so it is staggering that only 14% of people are receiving appropriate advice from Pension Wise. Imagine if only 14% of people were seeking advice for any other major financial decision—obviously, alarm bells would be ringing in Ministers’ offices and across the relevant sector. We have to reflect on that, so I hope that the Minister will try to address some of the thoughtful and well-made points raised by the hon. Member for Amber Valley and others.
I also want to draw the Minister’s attention to the fact that the same points have been raised by a number of other voices outside of the House today, so I hope he will go into this issue in some detail. I hope, in particular, that he will address the point made by the hon. Member for Amber Valley that many of the people who are not seeking advice have smaller pension pots and possibly less financial experience, and may need a greater degree of support, while those seeking advice appear to have larger pension pots and, arguably, may have a bit more financial experience. That seems to be the wrong way around.
I hope that Government policy can focus on that and, in particular, that they will look at some of the behavioural points—the nudges—and ways that they may legitimately assist people in this important matter. The Chair of the Select Committee also raised some interesting and thoughtful points on the issue of the potential trial service. I hope the Minister will comment on those.
I appreciate that time is limited, so I want to draw the Minister’s attention to another key area; I hope he will update the House on what the Government intend to do on this matter. The flip side of the lack of advice is the very sad and quite worrying growth in the number of scams; it is interesting that the two things have happened at the same time. While organisations such as Age UK have produced guidance to support those who may be vulnerable, it is really the role of Government to do much more on this important issue. Again, as with the issue of the lack of advice, the question of scams has been highlighted by the official Opposition, the Work and Pensions Committee, former Ministers and other respected figures such as Martin Lewis.
The pensions industry estimates that more than 40,000 people may have been cheated out of £10 billion-worth of pensions savings since freedoms were introduced in 2015. Action Fraud has reported that pension scams are becoming one of the UK’s most common types of fraud. These scams are often harder to spot than expected, even for those with good IT or tech skills. Research by Citizens Advice showed that one in eight people who said they were confident with technology found it difficult to spot a scam. However, it is possible to take action against that sort of fraud; as the Minister knows well from his involvement in the passage of the Pension Schemes Act 2021, the Government have taken action on telephone fraud, which is a related type of scam.
The hon. Gentleman is absolutely right. If someone is approached by a person with a scheme to improve their pension that looks too good, it probably is too good. Be careful—if someone promises you the world, the stars and the moon, there is something wrong.
The hon. Gentleman makes an excellent point; we do need to apply common sense to these very important matters. As I was saying, the Pension Schemes Act made it illegal to cold call and offer advice, in an attempt to reduce the number of telephone scams. Obviously, there are other forms of scams.
My hon. Friend is making an excellent speech. I think everyone would accept that the sophistication of the fraudsters is developing day by day, and that both legislation, and police and the Government action, is playing catch up—as it always will. Therefore, there is an urgency to deal with this; while the Government might have dealt with the telephone matter, scams are now more likely to be online or via other avenues. We need to make this a priority.
My hon. Friend is absolutely right that, sadly, technology and the ability of fraudsters is racing ahead. We need to take far more urgent action to tackle these awful problems. In fact, she has anticipated my next point; I hope that the Minister will clarify the Government’s position on this. I understand that he may be interested in the possibility of this action being included in the Online Safety Bill, and I ask him to update us on the discussions he has had with his colleagues. That Bill offers all sorts of possibilities to tackle these dreadful frauds. I hope that the Government will take determined action to tackle those problems, given that they have legislation that could address them in an appropriate and timely manner.
I will briefly mention some concerns about the roll-out of the dashboard and one or two other tools. Like Members across the House, I welcome the Government’s approach in attempting to devise the dashboard, and I recognise the need for greater information, but I understand from speaking to the industry that there are a series of technical problems. We should not let those delay the process too much. I ask the Government to take on board the industry’s views on that, and to be careful to ensure, as it is rolled out, that the dashboard is robust. I see that the Minister is nodding; I am sure that he will want to elaborate on that. It is important not only to achieve the dashboard, but to make sure that it is a high-quality product that offers the hoped-for level of reassurance and advice.
It is fair to say that the Government are taking rather small steps in the right direction, but they need to do so much more on the issue of advice. I hope that the Minister will elaborate on those points and reassure us that he is addressing this issue with the level of energy that is needed.
First and foremost, we all wish you well, Ms Bardell. We gather you were doing your best Franz Klammer impersonation down the slopes; I am certain that you will be back on the football field before too long. You are also the third Chair that we have enjoyed in barely a one-and-a-quarter-hour debate.
Today is an odd day, as we have all struggled through the pension-related tube strikes. We have dealt with many known unknowns, both in life and in the speech of my hon. Friend the Member for Amber Valley (Nigel Mills). In broad terms, I was in glorious agreement with him. The wonderful thing about pensions debates in this House is that effectively we are all singing from the same hymn sheet, and trying to get the same outcomes. However, there might be differences in how we reach those outcomes and, in the nine minutes that I have, I will try and address the 35 to 40 points that have been put to me that require urgent answers.
I will defer some of the questions asked by the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) because, to my great delight—I was told only last week—I am going to the Treasury Committee tomorrow specifically to answer on financial inclusion. That issue was also raised by the hon. Member for Strangford (Jim Shannon). The hon. Member for Kingston upon Hull West and Hessle raised a couple of points that I want to refer to briefly. She described the number of pension pots as four to five; we will probably have 10 to 11. It is a much bigger problem, but we are on it with two particular interventions. In the short term there is the pension tracing service, which I strongly urge all colleagues to recommend to their constituents, because they can be tracked down on the present basis. However, it is relatively basic and clunky; the dashboard is clearly a much better thing.
I will address a specific point about the dashboard at the outset. Many parts of my portfolio and job involve herculean heavy lifting—as the right hon. Member for East Ham (Stephen Timms), who has done my job previously, knows. The dashboard involves the most herculean heavy lifting of them all, taking 40,000 pensions schemes, getting all the data together, making them all talk to one another, incorporating the state pension and doing so in a data-friendly safe way.
I want to put on record my support for Chris Curry and the team. I have to say that I am not aware of such criticisms from businesses. That relates to the point made by my hon. Friend the Member for Amber Valley: data is everything here. It really is. The pension schemes have to improve their data, and once they do, a whole host of positive actions can flow. The dashboard is clearly one of them. It will allow an individual to see what they have, in the comfort of their own home or with an independent financial adviser, and do all of the things that we want them to do. The data flows from the dashboard decisions. The industry is concerned that I am pressing them to get its data together in a robust way; I do not shy away from that. Some people want me to go faster than I am. I would like to think that we are actually going quite fast to get the dashboard up and running. It will be live, in some shape or form, very soon.
That brings me to the specific points made in the debate; I obviously look forward to being grilled on all matters of financial inclusion tomorrow. In my experience, automatic enrolment opt-outs are not actually as bad as the hon. Member for Kingston upon Hull West and Hessle described, but I will take her point away and have a look at it. Obviously, they are a relevant factor.
I want briefly to deal with the point about the FCA. Clearly, my hon. Friend the Member for Amber Valley chose to have the Pensions Minister answer today’s debate rather than the Treasury Minister who deals with all matters of advice and the FCA. That makes my life a little difficult, but we are one Government, so I answer for everything, whatever the situation. The 2020 evaluation of the “Financial Advice Market Review” found that the financial advice market was going in the right direction, with more people accessing advice, but also recognised that some remaining challenges in the market needed further work. The Treasury is working with the FCA on the next steps. The hon. Member for Kingston upon Hull West and Hessle raised the FCA’s stronger nudge approach. I believe that the Department for Work and Pensions is actually going way faster. In 93 days, by my count—on 1 June—the stronger nudge policy will come into law. Although I obviously revere and adore the FCA and Treasury, and everything that they do, the DWP is at the front of that particular queue and is driving that policy forward.
Let me try to address the point about the signposting of Pension Wise by pension schemes. Wake-up packs are provided on an ongoing basis, but we also believe very strongly that impartial guidance from the Money and Pensions Service is a very good thing. MAPS is a very young institution. Parliament decided, following Select Committee reports, to legislate to create it and it melded all the previous operations together. It is a young institution—not even four years old. We are gently trying to nudge it into a greater take-up of all of its services, and it is part of the dashboard delivery service, for example. Although Pension Wise provides guidance about the options for accessing defined-contribution savings, it is primarily designed for those aged 50 and above who are making decisions about how to access such savings.
However, we are ignoring the MoneyHelper pensions service, formerly the Pensions Advisory Service. No one has mentioned it in any way whatsoever. The stats show that there were 113,000 Pension Wise appointments in 2020-21, and that MoneyHelper supported 220,000 people during that time. We are very focused. I understand why, in discussing Pension Wise, we have not discussed in any way all of the great work that the Money and Pensions Service is doing with MoneyHelper on pensions. The number of people using the service went up by 8% in 2019-20.
Separately, a report by the Social Market Foundation, which is a lovely organisation—I revere the fact that any think-tank is doing any work on pensions, and I agree with my hon. Friend the Member for Grantham and Stamford (Gareth Davies) that the more we talk about them, the better—made the point that we need a greater online service. The number of people using MoneyHelper’s digital pension tools has grown by 47%, from 170,000 users in the first quarter of 2020-21 compared with Q1 of the following year. There is much greater usage of MoneyHelper and other online services.
The statistics on MoneyHelper show how much the service helps, but I want to address the stronger nudge. It comes into force on 1 June, which, off the top of my head, is in 93 days. It requires schemes to go beyond signposting to guidance, as they currently do. They will be required to take an active role by offering to book a Pension Wise appointment on behalf of the member when they seek to access their defined contribution savings. That will be presented as a normal part of the process for accessing a pension.
Schemes will also be unable to proceed with any application to access savings until members have either received or explicitly and clearly opted out of guidance. For occupational schemes, the opt-out must be given in a separate communication from the member. We believe that that will ensure that all members are required to make an active, informed choice on guidance before they are able to access their savings. I believe that that strikes the right balance and is the right way forward. Although we all want to do more, Parliament has decided and has legislated for the Money and Pensions Service, Pension Wise and the Department for Work and Pensions to drive forward the stronger nudge as the way forward. I urge colleagues to get behind that in the short term.
In the short time I have left, I want to address fraud. Obviously, we believe that the stronger nudge will help. The Pension Schemes Act 2021 sets out four red flags to address those specific problems, and I pay tribute to the Pension Scams Industry Group and the other organisations with which I have worked. I hope that the draft Online Safety Bill will continue the good work that pre-legislative scrutiny has shown we are doing on pensions and investment scams. I have personally raised that with Google, Facebook, Instagram and LinkedIn. All those companies, particularly Google, need to be acutely aware that it is utterly unacceptable that there are 47 fake versions of Aviva at the top of the online search list, and that that needs to stop. To be fair, those companies can do that themselves without Government action.
I do not have time, as I have only 30 seconds left. Those companies do not need Government action. They can stop all of that by simply vetting their advertisers. It is long overdue that Google and others took such action. I sincerely hope that they do so on an ongoing basis, rather than our having to force them to do so at the threat of penalties.
I have totally run out of time, but I thank all colleagues. I genuinely believe we are all on the same pathway and journey, but just nudging each other in slightly different ways.
I am grateful to the Minister and to all colleagues who have taken part in the debate. It is regrettable that we did not quite give the Minister a strong enough nudge to convince him to make a change to the Government’s position at this stage. We will keep a watching eye on that and come back to it, because even with the stronger nudge starting in 93 days, as the Minister said, we know that will not get us to where we want to be.
Hundreds of thousands of people will still make this life-changing decision without the information they need, and without even knowing that they do not have the information that they need. That is not a situation that we want to see and it will inevitably lead to some people suffering detriment that they could dodge with the free, relatively quick and completely painless high-quality guidance service that is out there—a system that we put in place and wanted to become the norm. We wanted high take-up and we have not got there yet.
I recognise that there has been progress and I am sure we will see some progress as the new rules come in from 1 June. I hope that they solve the problem and that it goes away, but I fear it will not and I look forward to the next time we are here debating the issue. Hopefully, we can then make some further progress that we did not quite get to today.
Question put and agreed to.
That this House has considered take-up of pensions guidance and advice.
Planning Permission and Housing Need: Wealden
I beg to move,
That this House has considered planning permission and calculation of housing need numbers for Wealden.
It is an honour to serve under your chairmanship, Ms Bardell. I welcome the Minister to his new role, and I look forward to working with him intimately in helping Wealden put together its housing plan.
It is a huge honour to represent Wealden in Parliament. It is a joy to live in one of the most beautiful parts of our country, and our communities are excellent. During covid, I established the Wealden Heroes Award, which the Minister may want to reflect on. It showed the fantastic work that so many of our residents did for each other in the communities we wish to serve.
Before there is any confusion, let me point out that Wealden District Council covers more than my constituency, even though we share the same name. To continue the confusion—mostly to confuse the Minister—my married name is also Wheeldon, but I go by Ghani in this place. Many assumptions are made, but my constituency covers Forest Row, Wadhurst, Crowborough, the glorious Ashdown Forest, Mayfield, Uckfield, Fletching, Horeham, Hailsham and all the villages in between. They are watching, Minister, so I had to point out all of them.
When and where new homes are built is always controversial, but I fully recognise that our country and county need more homes and that a level of development is inevitable. My case work reflects that. I work with businesses that want homes for their workers, and with domestic violence victims who need social housing. I work with older residents who want to downsize, and with younger families who want to stop renting and buy their first home. I will never forget that, a few years ago, the fantastic Fletching Primary School was struggling because of the lack of kids coming in. We also did not have many young people in the area. When I speak to health practitioners serving Wealden, especially nurses, one of the big issues is that they just cannot afford to move in.
In Wealden, we are realists; we are not nimbys. Wealden District Council is already going above and beyond in order to accommodate the requirement set by the Government. However, the numbers are just too high. They ignore our environmental constraints and expect Wealden District Council to pick up the slack for failing neighbouring councils, which I will expand on as I go on. Wealden is presently working with the Department to put together its housing plan, and the Minister will know that I have been working with the Department since 2015—seven long years to try to resolve Wealden’s housing plan. I hope that today’s debate will help Wealden and the Minister to put that in place.
One of the big points that I need the Minister to respond to is about the population growth calculation. I am deeply concerned about how the statistics are used by the Department. Based on the Department’s standard method, Wealden’s share is 1,221 new houses each year. However, the standard method uses Office for National Statistics population projection data from 2014 that show that between 2021 and 2031, a total of 212,739 new houses are needed each year for the whole of England. However, the corresponding figure in the latest data, which are for 2018, shows a reduction of 161,048 houses per annum—a reduction of 24%. According to the 2014 ONS projections, Wealden’s share was 872 houses per year, whereas the 2018 projection is for 598 houses per year, an even larger reduction of 31%. Ignoring the reduction just does not make sense, and I hope the Minister can confirm what data the Department is using. If there is not the population need for the homes, what is the justification for the Department’s data and the pressure on Wealden District Council?
According to current targets, 24,500 houses are scheduled across Wealden District Council between 2018 and 2038. To put that into context, 24,500 homes is equivalent to approximately one home for every 2.8 already in the district. Let us just think about how that would ever make sense, because I do not know how such numbers are meant to stack up. From 2017-18 to 2019-20, the requirement for new houses for Wealden went up from 499 to 1,236—an increase of 226%. Those targets are incredibly high and one could even say slightly absurd considering the jump. I hope the Minister will explain to us how the targets are set.
Notwithstanding the large increase in deliveries of new houses, Wealden Council was unable to deliver the quota demanded by the Department, as it achieved 83% for the housing delivery test. Wealden was therefore penalised with an increase to its five-year land supply by a buffer of 20%, resulting in a five-year land supply figure of 7,440. Moreover, planning applications are often granted but not built out for a number of years. Although Wealden did achieve 83%, it has approved many more houses than that, and it is essential that those approvals are also included in the overall numbers.
At Wealden District Council, more than 7,600 permissions have been given for new homes, but not all of them are being built right now. During the past two years especially we have seen understandable delays in construction due to the disruptions of covid and supply chain issues. The projected completions within five years currently amount to 3.6 years’ supply. We need to ensure that all homes that have been granted consent will count towards the forward targets and the five-year land supply as well. Over the last seven years, along with the council, I have repeatedly asked the Department to respond to this point, which will help Wealden council put together a more realistic housing plan, where the numbers will not be bounced around, which would stress constituents out even more. I hope the Minister will respond to that as well.
We talked about Wealden achieving just 83% of the housing delivery test, but only one authority in East Sussex has avoided continued Government sanctions for failing to meet the housing targets. Four out of the five local planning authorities in East Sussex have failed to deliver the housing requirement in the years up to March 2021. Hastings Borough Council and Rother District Council fell below 75% of their target, building an average of less than 200 dwellings a year, which compares to the 800 that Wealden is doing at the same time, yet those areas receive additional Government support for infrastructure, whereas Wealden does not, because they traditionally fall into the metrics of deprivation. I hope the Minister can explain why, when a council achieves 83% compared with 75% in neighbouring authorities, it is further penalised and does not secure infrastructure funding. We need to have the right incentives in place for good councils.
We are incredibly excited about the levelling-up fund and all the funding that will come to our county. We have projects—I can see my hon. Friend the Member for Eastbourne (Caroline Ansell) is here—and funding for Hastings, Newhaven, Seaford and across the Lewes constituency. That is great for the county, but we want to see further investment in our roads. The levelling-up White Paper highlights planned investment for the A27 at Lewes, improvements to the Brighton mainline and a new hospital for Eastbourne.
As East Sussex MPs, we meet up every Tuesday afternoon under the auspices of my hon. Friend the Member for Bexhill and Battle (Huw Merriman) to make sure that we co-ordinate our funding. Although we appreciate the funding for the county, as I pointed out, Wealden builds above and beyond all of its neighbouring local authorities but tends to receive the least funding, and that has to be re-evaluated. A local authority that builds more homes than its neighbouring local authorities should be prioritised for funding, not penalised because it does not meet the traditional metrics of deprivation. Wealden should be rewarded for the homes that it is building.
I hope my hon. Friend the Member for Eastbourne will forgive me as I make my next point. Eastbourne also has an increasing population, and it tends to build higher-storey homes, but it constantly argues or complains that it does not have the space to build outwards, so the pressure falls on Wealden.
I thank my hon. Friend and very dear parliamentary neighbour for giving way. I commend her on her tireless campaigning for Wealden to ensure there is sustainable and appropriate development. I know the pressure that Wealden is under, and part of that is because of Eastbourne, where we are constrained by the sea and downland, so it is challenging to deliver on the numbers. I rise in the name of that small part of my constituency that sits within Wealden District Council. Because of the beauty of the constituency, which my hon. Friend has described—much of it areas of outstanding natural beauty—Willingdon, Jevington and Wannock are often subject to planning applications—disproportionately so—and recently a very unpopular Mornings Mill application was kicked out. Does my hon. Friend agree that for development on that scale, without the infrastructure coming down the line, such as the road development she has mentioned but also, notably, GP practices, we simply cannot deliver on those numbers?
My hon. Friend and neighbour makes a very valid point. I am going to ask the Minister to consider putting in forward infrastructure funding before developments are fully developed, to ensure that our communities benefit from the new homes that are coming. Of course, Eastbourne has the sea, but it could also—I urge my lovely neighbour to consider this—build up so that we do not have to build out into the area of outstanding natural beauty in Wealden.
Moving across the county, we have the Pevensey levels and the South Downs in the south of Wealden, which cannot be developed, and then we have areas of outstanding natural beauty in the north of the district, including Ashdown forest—the home of Winnie the Pooh—which restricts growth. We therefore have a lot of pressure on areas such as Horam and Hailsham in the Low Weald, which tend to bear the brunt of housing applications. I hope my colleague and neighbour, the hon. Member for Eastbourne, will agree that it is unfair that Wealden has to shoulder local needs elsewhere in East Sussex and absorb the numbers we need for Eastbourne, Hastings and Lewes because those towns are unable to deliver their fair share. I hope the Minister can recognise the pressure that Wealden District Council is under and can try to not only deliver greater funding but support its need to push back unnecessary development proposals.
My hon. Friend’s point is well made, but does she agree that the dynamic she described around population growth applies equally to Eastbourne, where we need to see a significant fall in the numbers we are expected to build? There will then be every expectation that we can meet our own need and do not need to look to neighbours to bring forward these homes. The population forecasts that apply to my hon. Friend’s constituency have equally cast far greater numbers in my patch.
The ONS data is the crux of the problem that we need to resolve. If the population growth is not as it has been tracked, then we need to re-evaluate the numbers that local authorities have to set their targets to, so I agree with my colleague. Hopefully, we will continue to meet every Tuesday to hash out planning for the foreseeable seven years as well.
I will now turn to infrastructure, which does not neatly sit within the Minister’s Department, but I wish him to understand the pressure that the district is under. The scale of growth that the Government are asking for has to be accompanied by meaningful infrastructure funding, which also helps alleviate the pressure from new homes arriving in any area. We have major road arteries such as the A22, A26 and A27 connecting Wealden to the rest of the south-east, and they are in dire need of upgrades.
Our rail network is similar: I look forward to the Minister visiting Wealden, when he may have the joy of travelling on the Uckfield line—if he googles it, he can just google the “misery line”. Let me explain why: it is unreliable, and it is a real dinosaur. It operates one of the country’s last diesel trains on a single track. It is completely unfit for this day and age, and it is already under pressure before the new homes have arrived. I am told that it is the most polluting line in the country; I have yet to check that figure, but we desperately need it to be electrified, and I will continue to campaign for that.
As my neighbour the hon. Friend the Member for Eastbourne has mentioned, there are concerns about healthcare and dental care provision. We have a particular aging population, and because of the area we are in, we also have pressure on sewerage and water. We need greater broadband and of course we always need greater transport investment as well.
As I have mentioned to the Minister, after seven long years of meetings, it would be good to try to get to a point where everybody is comfortable. We were really pleased that we were able to host a meeting with the Secretary of State last year to make sure that Wealden District Council was given the support it needed in putting together its plan. We want its plan to pass and to be successful. I would not be able to represent Wealden today without the support I receive from the district council leader, Bob Standley; the deputy leader for planning, Ann Newton; the chief executive officer of Wealden District Council, Trevor Scott; and all the fantastic councillors.
It is not just Wealden or our county: a lot of councillors are under huge pressure to deliver to meet the housing need, given the stress that it creates in local communities. Ann Newton in particular has received a lot of unnecessary abuse for just being the public servant trying to deliver for East Sussex.
These are my asks of the Minister: first, let us make housing targets advisory, not mandatory. Let us link Government funding, whether the towns fund, school funding, infrastructure, jobs and healthcare, to councils that build homes. Let us incentivise them; let us adapt the proposed infrastructure levy to ensure that infrastructure is provided before homes are built—the point raised by my hon. Friend the Member for Eastbourne.
Let us help last-time buyers, as well as first-time buyers, by examining measures to encourage elderly homeowners to downsize by providing a stamp duty exemption or reduction. Let us reduce rates on the top end of stamp duty. People cannot afford to move when their circumstances change, because they simply cannot afford the stamp duty. Let us outlaw gazumping. Let us improve schemes to help housing associations, and Wealden Council, which has its own housing company, to develop and build bungalows. Let us have “use it or lose it” planning permissions. Let us prioritise low-carbon house building.
Lastly, and mostly importantly for Wealden, let us adapt current rules to fix situations where a council has given planning permission for sites that are not developed, but the council then faces Government censure when developers are at fault for refusing to build out those permissions. Let us include permissions granted for new homes in the housing number allocations. As mentioned, Wealden District Council has given 7,600 permissions for new homes; they have not all been built yet, but they are on their way. Will the Minister ensure that those are not only allocated within overall targets but go towards the overall five-year land supply, as well?
Those are a lot of asks for the Minister, but it is incredibly important for Wealden to get this right. It is the last Conservative council in the county and we are keen to build—properly and in an environmentally friendly way—homes that people want to move into. We can do that only with the support of the Minister, and I look forward to welcoming him to my constituency.
It is a pleasure to serve, for my first time in this role, under your chairmanship, Ms Bardell. I thank my hon. Friend the Member for Wealden (Ms Ghani) for securing this important debate and my hon. Friend the Member for Eastbourne (Caroline Ansell) for her interventions.
My hon. Friend the Member for Wealden described her constituency as a beautiful area and listed the many communities that make it a unique place to live. I was particularly interested to hear about the Wealden heroes, and I think we all want to say thank you to our constituents, up and down the country, who have done so much during the pandemic to help those who needed support.
My hon. Friend is an assiduous Member on this important issue of building the houses we need in a way that gets the community behind it. I was interested in the debate between my two hon. Friends, which demonstrated clearly and visually the difficulties I will face in my role, with contrasting viewpoints about how to deliver these houses.
My hon. Friend the Member for Wealden will know that, due to my right hon. Friend the Secretary of State’s quasi-judicial role in the planning system, I am unable to comment on the merits of a specific plan, but I can provide some general comments. Having an effective, up-to-date plan in place is essential to planning for and meeting housing requirements. Each plan is subject to a public examination in front of an independent inspector who examines plans impartially to ensure that they are legally compliant and sound.
Getting an up-to-date plan in place, backed by evidence and produced with community involvement, will stand local planning authorities in good stead in determining planning applications and at any appeal. To get enough homes built in the places where people and communities need them, a crucial first step is to plan for the right number of homes. That is why, in 2018, we introduced a standard method for assessing local housing need, to make the process of identifying the number of homes needed in an area simple, quick and transparent. The standard method shows the number of homes needed in a local planning authority and is the first step in deciding how many homes an area should plan for.
To help enable the country to deliver 300,000 homes a year, in December 2020 we changed the formula to increase the need by 35% in 20 of our most populated urban areas to maximise use of existing infrastructure and to support development that reduces the need for high-carbon travel. All other local authorities in England, including Wealden, saw no change compared to the previous method, so, in effect, continued to calculate their local housing need in the same way.
Following the 2020 consultation, the Government concluded that the 2014-based projections would continue to be used to calculate housing targets. Household projections are not just a measure of how many houses are needed to meet demand; the ONS has been clear that lower household projections do not necessarily mean fewer homes needing to be built. The standard method is used by councils as a guide when they develop their local plans. That means that councils decide their own housing requirement once they have their local need, with the expectation that the inspector should also consider the local circumstances and the constraints that really matter to local people. The council should also consider working with neighbouring authorities if it would be more appropriate for the needs to be met elsewhere.
I want to add that I know that Councillor Standley and Councillor Newton of Wealden District Council are doing their utmost to deliver the homes they need for their areas, and I reassure my hon. Friend the Member for Wealden that the Department will continue to support the work of her council, now and into the future.
Building the homes this country needs is at the heart of the Government’s commitment to levelling up across the United Kingdom. The planning policy framework still expects local authorities to demonstrate a five-year housing land supply against the housing requirement. Therefore, following consultations with communities, local authorities need to get a local plan in place and allocate appropriate sites. When a local authority finds itself unable to demonstrate a five-year housing land supply and engages the presumption in favour of sustainable development, that does not mean that planning permission is automatically granted. Each case is considered on its merits, and only planning matters may be taken into consideration. When any adverse impacts of granting approval would significantly or demonstrably outweigh the benefits, or if national policies protecting important assets provide a clear reason for refusal of an application when assessed against the national policies taken as a whole, the application should be refused.
For as long as local authorities fail to demonstrate a five-year housing land supply, they will be more at risk of appeals and speculative planning applications being successful. That said, we are reviewing the planning system, including the role of the five-year housing land supply policy, and considering its alignment with and support of the levelling-up agenda.
The housing delivery test is a scheme that is designed to encourage authorities to focus on supporting the build-out of deliverable schemes with planning permission, but also to be realistic about likely rates of delivery from sites in those plans. It aims to offer greater transparency on the actual housing delivery in an area and to ensure that communities’ local housing need is being delivered in a local planning authority area. It therefore does not necessarily just measure permissions.
The Government are clear that developers should build out permissions as quickly as possible. That is an area in which I am taking a personal interest. When planning permission has been granted for new developments or when sites are stalled or experiencing delays in being delivered, it is for local authorities and developers to work closely together at a local level to overcome the barriers, as they are best placed to achieve that.
My hon. Friend the Member for Wealden talked passionately about infrastructure, and contributions from developers play an important role in developing the infrastructure that new homes require. Local authorities can obtain contributions by charging a community infrastructure levy on new developments and by negotiating section 106 planning obligations with a developer. According to its 2021 infrastructure funding statement, Wealden District Council collected over £5 million in community infrastructure levy in that year, plus over £3.4 million from section 106 agreements.
I know that my hon. Friend has called for the Government to explore the whole issue of the introduction of a new infrastructure levy, which will replace section 106 planning obligations and the community infrastructure levy. The proposed levy will be simpler, more transparent and more consistent. I would like to reassure her that I recognise the importance of the timely delivery of infrastructure through developer contributions. That will be an important consideration in the design of the new levy. In my constituency, I know people feel frustrated that often the infrastructure comes way too late, or perhaps not at all, to meet the demands.
My hon. Friend kindly invited me to visit her constituency; I will be delighted to do so at some point, although she did not quite sell it with the misery line. Even so, I would be more than happy to come.
I thank, again, both my hon. Friends for fighting for their constituencies and for raising this important topic for debate. The Government recognise that we need a modernised planning system. We are considering how best to take forward proposals for changes to the planning system. An announcement on next steps will be made in due course. I know that my hon. Friend the Member for Wealden also previously suggested that numbers for local authorities reflecting the housing an area needs should be advisory, not mandatory. I want to take this opportunity to reassure her that I have heard the concerns loud and clear, not just from her but from many colleagues in the last three weeks.
My hon. Friend also raised the important point about older people. She may be interested to know that we are developing an older people’s taskforce to see what we can do to help in that important area. She raised the possibility of a stamp duty reduction for last-time buyers. She will be aware that that is a decision for the Treasury and is a bit beyond my purview. I sincerely encourage her to have a constructive debate with our Treasury colleagues on that issue.
I am grateful to my hon. Friend for giving me the opportunity to speak on this subject again. As the new Minister in the Department, I am keen to understand the issues in her area and in other areas around the country as we try to find a planning policy and system that works for the whole country, delivers the houses we need for our local people and ensures we have the economic prosperity that that will bring. I look forward to working with her over the coming years.
Question put and agreed to.
International Mother Language Day
[Sir Edward Leigh in the Chair]
I beg to move,
That this House has considered International Mother Language Day 2022.
It is a pleasure to serve under your chairmanship, Sir Edward. I start by wishing everyone happy St David’s day—I can see many of my Welsh colleagues here. I begin my remarks by speaking the language of my parents—Sylheti—for what I understand could be for the first time in a UK parliamentary debate by simply saying,
“Ekta basha kuno dino jotheshto oy na”.
In English, that means, “One language is never enough”.
I am delighted to have secured this debate about Language Martyrs Day and International Mother Language Day on the date that those remembrances fall—21 February, or Ekushey February in Bangla, when 70 years ago this year political activists and students in Dhaka were killed while demanding official status for their mother tongue Bangla. Honouring those Bengali students martyred in 1952 has, of course, deep personal meaning for me as a British Bangladeshi growing up in, and now representing, an area with a large Bengali-speaking community. Every day I feel acutely a deep sense of responsibility from knowing that I owe so much personally to those who came before me, who had to struggle to keep our culture and language alive, facing prejudice, discrimination and state repression.
The language of my family—Sylheti—is spoken by an estimated 11 million people, primarily in the Sylhet district of Bangladesh and, of course, around the world by a diaspora community, including in my constituency of Poplar and Limehouse. In fact, we are lucky in east London to be one of the most linguistically vibrant areas and communities in the entire country, with at least 90 identified different languages being used in Tower Hamlets alone.
Globally, there are a wonderful 6,500 spoken languages in the world today, and each is superbly unique in a number of exciting ways. Language is one of the most important parts of any culture and society, and it is critical for our daily lives as we continually seek to further understand and improve the world around us. The words that we use are constantly evolving and changing. New words are created to describe new things, and old words invariably take on new meanings. The nuances and multiple levels on which a single word can operate are just incredible. Our language can be remarkably simple and extraordinarily complex, and sometimes both at the same time. Words can be extremely specific, and yet they can mean almost anything and everything in between. Language diversity is at the heart of this human brilliance.
I am glad that the hon. Member said that old words can grow new meanings. In this place, I have actually asked Members on the Government side, “Is having a curry on the veranda of my bungalow, with some chutney and a lager, English?” Clearly, it is English, but it is also a huge number of other languages, which have contributed to the mix that is English and to the mix that is Welsh, as I will explain later.
I thank the hon. Member for making such an important point, which is actually a running theme of my words here today.
I know people who tell me that there are things they can say in their mother language that they cannot say in English, and that there are things they can say in English that they cannot say in their parents’ language. And there is no doubt that we are richer for the range of people who call Britain home but carry in their hearts the language of another land. So, Language Martyrs Day and International Mother Language Day emphasise the significance of protecting, nurturing and embracing different cultures, languages and ways of life.
My hon. Friend is making a very important speech. I am proud to be a Member of Parliament in England, for Stockport. At home, my parents speak Hindi, which is one of the languages of India; indeed, it is the main language. I believe that Hindi is the fourth most spoken language in the world—over 341 million people speak it as their native language—and I am proud to be able to speak it, read it and write it in addition to English.
The point I am trying to make is the point that my hon. Friend made about protecting and respecting other cultures and languages. On this point, does she agree that the persecution in China of people who teach or want to speak Tibetan, which is the native language of Tibet, has to stop, because freedom of expression, freedom of association and freedom of religion are fundamental rights?
My hon. Friend makes a very important point and I hope that the Minister can address it in her remarks.
As I was saying, Language Martyrs Day and International Mother Language Day emphasise the significance of protecting, nurturing and embracing different cultures, languages and ways of life, accepting ourselves and accepting each other, as my hon. Friend the Member for Stockport (Navendu Mishra) has just said.
As the MP for a diverse and dynamic constituency, for me every day highlights the benefits of celebrating our various cultural heritages and linguistic diversity, learning from different traditions of living together and interacting with each other, and—importantly—nurturing the language and culture that grow out of those experiences. In short, multiculturalism is a privilege, not a problem, and diversity of language makes the collective fabric of our society stronger.
Yet the last few years have seen a growing trend whereby there are some attempts to engage in the so-called “culture wars”, with anti-immigration rhetoric being used as a smokescreen to hide society’s wider failings, legitimising racist attitudes and exacerbating social marginalisation.
Unfortunately, language can be used as a tool to construct certain people as “the other” and to force them to assimilate. All around the world, states have often restricted official use of minority languages, because of the idea that it is necessary to use only specified languages. The pandemic exposed the fact that many minority language speakers continue to be excluded from learning and accessing crucial information, which has had significant implications, for example for the roll-out of the vaccine and the fact that people from black, Asian and minority ethnic backgrounds have faced greater risks and endured greater hardships.
Language diversity plays a key role in people’s identity and it plays a similarly key role in our wellbeing and mental health. That is why it is vital that local and public provision of community language services is free at the point of use and that digital technology is made widely available for multi-lingual learning. At a time when many people are worried about knife crime, radicalisation and many young people’s lack of a sense of belonging, it is devastating that these sorts of services are being cut and privatised. Indeed, local community language services, which were a huge part of my life growing up and of the lives of so many people around me, have now been outsourced and cut, making them another casualty of the programme of public sector cuts that has been disastrous for everyone. I find that particularly sad because it was through such services that I myself learned to speak, read and write Bangla, and it is my constant wish that my Bangla and Sylheti skills were better than they actually are.
The opportunity to use one’s own language and the language of one’s family can be of crucial importance for individual and collective identity and culture, as well as participation in public life. Language services help to provide people with an understanding of their first language and culture, raise educational attainment and promote inclusion, because when people understand their community language, they understand their community and their elders better. Of course, during the covid crisis, language barriers and challenges regarding intergenerational communication were part of putting certain segments of our communities at greater risk. Multilingual education based on people’s mother tongues is therefore a key component of inclusion in education.
The United Nations and others have long argued that education based on the first language or mother tongue must begin from the early years of every child’s life. The theme of this year’s International Mother Language Day is “Using technology for multilingual learning: challenges and opportunities”, which speaks to the role of technology in advancing multilingual education. School closures have been a prominent feature of the covid-19 crisis, and while communities around the world had to use technology-based solutions to maintain continuity of learning, too many lacked the necessary equipment means such as laptops and other items, internet access and accessible materials. As such, many of us campaigned for everyone to have access to the internet and to the technology needed. In today’s world, fast, reliable broadband is not a desirable extra but a fundamental requirement for a decent life, and it is most certainly vital for education and linguistic development. That is why the Labour party’s 2019 manifesto pledged to offer free and fast broadband to every household in the country by 2030—a pledge, and a manifesto, that I was very proud to stand on.
It is also crucial to recognise the role of specialist language media outlets in providing high-quality journalism and addressing the issues that different communities face. In the face of an increasingly politically and culturally homogenous media landscape, media diversity is key to empowering everyone, and it plays a key role in reaching out to, informing, including and representing ethnic minority communities in particular. There is a great need for the histories, cultures and languages of those communities to feature much more across the whole educational curriculum, local services and the cultural sector.
Language Martyrs Day and International Mother Language Day emerge from a history of jostling powers and political struggles. I think about how the Black Lives Matter protests all over the world recognised the importance of the inclusion of diverse cultural storytelling through their demand to ensure that school curriculums include educating young people about racism and imperialism. There is a need to rebalance historical and social narratives that currently exclude certain experiences and perspectives. We all have a duty to make sure that the next generation, at least, has a better understanding of the historical injustices that contribute to the institutional racism that persists in the UK and elsewhere today.
Ultimately, Language Martyrs Day and International Mother Language Day is an opportunity to see the rich tapestry of our linguistic diversity as something to be cherished—a joyful kaleidoscope of possibilities and potential to be revelled in. People, with all our diversity and rich traditions, have much more to gain by standing together than being divided. We do not have to be alike to have the same interests and shared sense of solidarity.
As ever, it is a privilege to serve under your chairmanship, Sir Edward, and I take the opportunity to wish everybody in Westminster Hall a dydd Gŵyl Dewi hapus iawn—a very happy St David’s day, very appropriate for today’s debate.
I join colleagues in congratulating my hon. Friend the Member for Poplar and Limehouse (Apsana Begum) on having secured this important debate. She made some incredibly important points about the real benefits of second, third and even fourth languages in keeping our country’s cultural diversity at the very forefront. As a very proud Welsh MP, it would feel remiss not to use this opportunity to highlight the incredible work of the Labour Government in Wales and how they are doing their bit to keep the brilliant Welsh language alive and kicking.
Earlier today, my wonderful friend and colleague, the Minister for Education in Welsh Government, announced major new projects to grow the Welsh language that include bold plans to open new Welsh-medium schools, creating more opportunities for adult learners and supporting the Urdd, Wales’s largest national youth organisation, with an extra £1.2 million. That is just a small insight into what incredible work a Labour Government can do for our cultural heritage, and I am especially proud today to see those amazing policy commitments in action.
Indeed, colleagues may be surprised to learn that Welsh is actually undergoing a resurgence of its own, with Welsh being the fastest-growing language, according to research by popular language app, Duolingo. The number of people learning Welsh rose particularly during lockdown; it saw a whopping 44% increase in 2020, with Welsh beating Hindi, Japanese, French and Turkish. I would like to declare my own interest as a keen Welsh learner trying to improve my fluency in the language.
As is the case with so many other languages, the Welsh language is at the very heart of Welsh culture and identity, from phrases used to cheer on our sports teams, “Cymru am byth” to “iechyd da”, a personal favourite of mine, and my favourite word in any language, “cwtch”. We cannot forget our proud national anthem, “Mae Hen Wlad Fy Nhadau”, which translates as “The Land of my Fathers”, proudly written by two of Pontypridd’s residents, Evan and James. It just goes to show how beautiful, vibrant, and full of variety our Welsh language truly is.
In Wales, we are very lucky to see the Welsh-medium channel S4C continue to thrive, although given the Government’s lack of awareness when it comes to the future funding of the BBC, perhaps the less said on that the better. That aside, I am particularly proud that Welsh is undergoing an overdue resurgence, but of course, none of that could happen without a bold commitment by the Welsh Labour Government to invest in our heritage. The Welsh Language Minister and the Senedd have set an incredible goal to reach 1 million Welsh speakers by 2050, which is around a third of Wales’s current population. It is only with that type of commitment that languages like Welsh can continue to flourish and reach new households, and I am very proud to say that I have seen my own Welsh skills recently develop thanks to the campaign to get us all learning.
The ambition and commitment do not stop there. A few weeks ago, the Welsh Labour Government announced that free Welsh lessons would be made available to anyone aged 16 to 25 and to all education practitioners. That is an incredible effort, and only possible thanks to the Labour Government and to the National Centre for Learning Welsh, which launched an incredibly successful online taster course for teachers and leaders back in February 2020.
Not everyone has the chance to learn Welsh from a young age, and many of us decide to give it a go later in life after building up an understanding of the value of being able to use Welsh in daily conversations. I would urge anyone who is tempted to join the 1.5 million people who have, to date, started learning Welsh on Duolingo to just give it a go. You absolutely never know where a second language—especially Welsh—may take you. Diolch.
I fell into today’s debate just like I fell into languages upon becoming an adult, and I thank the hon. Member for Poplar and Limehouse (Apsana Begum) for bringing this debate to the Chamber today. It is a very fun debate, and I am most interested to hear and learn what everyone has to say.
The hon. Member for Pontypridd (Alex Davies-Jones) referred to pride, and I was wondering, what am I proud of? I am proud of being a sometimes English-speaking MP from Northern Ireland, representing the constituency of Bolton North East, who in any given week probably spends about 20% of his time speaking Mandarin Chinese because that is what I speak with my daughter at home. It is probably more standard than my English.
From a very personal perspective, I absolutely understand the sheer importance of learning languages. On leaving university, I spent roughly 14,000 hours trying to learn Mandarin Chinese; I read and write about 4,000 Chinese characters, and read the newspaper or whatever else, and I have gained a huge amount from the capacity to improve cognitive ability.
The Minister will understand what I am about to say. As someone who was born and grew up in Northern Ireland, I know that language and culture can often be politicised, unfortunately. In my own case, I come from an Ulster Scots or a Protestant Unionist background in the town of Ballymena in County Antrim, and when I was growing up we did not learn Gaelic at school. We never came across the Irish language. Therefore, when we met people from the other community if they had what, to us, looked like a nuanced sort of name, we did not know how to pronounce it half the time.
Three years ago, I took it upon myself to spend a week in Glencolumbkille in Donegal, on the west coast of Ireland, trying to learn Irish Gaelic. Do you know what, Sir Edward? It is more difficult than Mandarin Chinese. Perhaps it is just because I am getting old, but I was humbled by the experience. At least Chinese characters look different from the word go, so there an expectation; Gaelic has what look like English-language letters, but when I tried to read them my teacher told me I was getting them completely wrong.
The personal dimension is very important, and my first message to my fellow countrymen in Northern Ireland is to be open to different languages and cultures. When people as their native tongue have English, which is the hegemonic language of the world and spoken more than any other language as a second language, they have nothing to be worried or scared about. The British Council, among others, does a fantastic job at projecting soft power across the world.
My constituency of Bolton North East has one of the largest and most flourishing Indian Gujarati Muslim communities in the United Kingdom, bar a very few of the 650 constituencies out there. The hon. Member for Poplar and Limehouse said that sometimes people are sceptical about diversity or have a fear of it, but I am the complete opposite. I see nothing but opportunity. I think of my Gujarati community, along with a significant Pakistani community, as a massive opportunity for us, especially at a time when south Asia and its distinctive economies have such a promising future in what is already shaping up to be the Asian-Eurasian century in front of us.
My own shortcoming on this is that I have had on my desk here in Westminster, for the last year and a half, a book about learning Urdu. When I asked people if I should learn Hindi or Gujarati, they said, “They are all beautiful languages, but Urdu is slightly more beautiful.” I am not sure if the hon. Member for Stockport (Navendu Mishra) would agree with that.
I would like to share the fact that Hindi and Urdu are very similar when spoken, but they are written differently. Hindi is written left to right, but Urdu is based on the Arabic script and it is right to left. I would encourage the hon. Gentleman to learn either, then he will be able to speak both, but he will have to do a lot more work when it comes to writing.
I thank the hon. Gentleman, who also represents a Greater Manchester constituency. If I am ever in the market for a teacher, I will know who to look to. My constituency has a huge advantage when it comes to linguistic diversity.
Finally, in thinking of the world, the environment in which we live and the announcements made by the Prime Minister and the Home Secretary today about opening our arms even further to the Ukrainian people, in my constituency I have one of the most established Ukrainian diasporas in the United Kingdom outside of London. I attended a rally on Saturday with the Bolton Ukrainian Social Club and Cultural Centre, headed up by Yaroslaw Tymchyshyn. As the number of people coming from Ukraine to the United Kingdom inevitably increases, there is an opportunity, in the words of the hon. Member for Poplar and Limehouse, to add to that “rich tapestry” of the United Kingdom. We have always to be open to change, because change is the only constant. Linguistic diversity has added so much not just to the culture of the United Kingdom, but to our economics and future prosperity. I again thank the hon. Lady for securing the debate.
It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate my hon. Friend the Member for Poplar and Limehouse (Apsana Begum) on securing this important debate.
Languages and multilingualism can advance inclusion and cohesion. The diversity of languages spoken in towns such as Luton, where I come from, acts as an avenue to strengthening and enhancing community cohesion. We are very proud of our town’s diversity and global outlook. In Luton, over 100 languages are spoken and our diversity is our strength.
I was introduced to the celebration of International Mother Language Day by friends in the Bangladeshi community in Luton. Only this weekend, the Purbachal—The Eastern Sky cultural group and the United Nations Association—Luton held an International Mother Language Day celebration event. The theme for the event was “valuing identity, culture, diversity and peace”, which was very appropriate for this time, although the association was using technology, because it was over Zoom. The opportunity to learn about the other languages and cultures that contribute to an area’s identity helps to create shared understanding and respect. In my short contribution to the event, I reflected on the fact that my own mother language, English, is derived from many other languages, including the old Germanic languages, Norse, Latin, French and some ancient Greek, and the point about words evolving is really important.
On the need to develop understanding of languages, we have many local groups in Luton that are key to this endeavour. The Centre for Youth Community and Development is a community group that provides enormous benefits to our diverse communities in Luton. It delivers many services, including educational programmes, English language lessons and activities for our young people. However, one of the most important things that it has done recently is social and heritage history projects, particularly around oral history. People learn about the social development of different generations, which is spoken—it is not possible to write it down. The important thing is being able to speak in the mother language of the elders from the community. If we do not retain those links and the ability to speak the languages of the generations above us, we will lose them.
Very pertinently, I visited the Luton branch of the Association of Ukrainians in Great Britain on Sunday to express my solidarity with the community and support their donation drive as they came together. I listened to accounts of the invasion by Putin and the fear that some people’s family members had back in Ukraine, but one of conversations I had with some of the people there was about their pride in the importance of retaining their Ukrainian language with their children to ensure that their children can communicate with their grandparents back in Ukraine. That is prevalent in many different languages, particularly in Luton, where we have many supplementary schools to facilitate learning a language, whether Bangla, Ukrainian, Turkish, Polish, Greek or Tamil. For young children to learn the language of their parents and grandparents so that they are fluent, as we have heard Members say, is really important for remembering these connections. However, it is absolutely right that I make the point that more than 10 years of Tory austerity, with 60p in every £1 being cut from local authorities, have had a detrimental impact on language learning, because the discretionary grants that local authorities were able to make have been taken away, which has been damaging for many of our young children.
On that basis, I would like to hear what the Minister has to say about the impact of 10 years of Tory austerity, and of the cuts to local authorities, on community language schools and supplementary schools, particularly the impact on intergenerational communication and cohesion. Similarly, if we talk about learning and remembering one’s mother language, we have to reflect on the fact that funding across England for providers of English for speakers of other languages, or ESOL, was slashed from £202 million in 2008 to only £105 million in 2018—a real-terms cut of almost 60%. Ensuring that English language lessons are accessible should be a priority for the Government. Either way, it is critical for people to engage in society and fulfil their potential, so I hope that the Minister will outline what steps the Government are taking to ensure that nobody is left behind due to language barriers.
Hon. Members have talked about the languages they have learned. I studied French as a younger person, but the most important thing I learned on Sunday was how to say hello in Ukrainian, so I will leave you with “pryvit”.
I thank you, Sir Edward, and congratulate the hon. Member for Poplar and Limehouse (Apsana Begum) on securing this interesting and important debate. It is interesting and important because language is so intimately tied up with identity. I congratulate the hon. Members who have taken part so far on the positive tone of the debate. I come from a country where language has been a contentious issue for many years—something that has now largely passed, I am glad to say.
I am glad that we are debating mother tongues, or what are sometimes called minority languages, lesser used languages in the European Union term, and autochthonous languages, which I use as a former academic. It is a lovely term, which means arising from the land it comes from. In that respect, Welsh and English in Wales are both autochthonous languages, as are other languages that have been mentioned.
I am also glad that we are discussing this on Dydd Gŵyl Dewi, our national saint’s day, St David’s day. In Wales, we have a wealth of understanding of the nature of bilingualism, or rather multilingualism. Bilingualism is just a special case of multilingualism. We also know a lot about translation, machine translation, the technology of simultaneous translation, bilingualism, IT and education, through two languages or one at a time.
We also have experience of devising new terms and growing new meanings on old terms. It is one of the abiding joys of my life that I occasionally see terms that I devised a long time ago, going past on paper from Government publications on social matters. It is humbling to know that I have added one or two to the million entries in the University of Wales dictionary of Welsh, which comes in four volumes and is available upstairs in the Members’ Library, if anybody is interested. I think they bought it especially for me.
It is multilingualism, for many languages are spoken in Wales and the UK, although in Wales only two have legal status, while others are extensively catered for. My argument is that if two are conceded rather than one, why not concede three? Why not make provision in particular circumstances for three or more? The important point is that multilingualism is the normal condition throughout the world. It is the UK’s sometimes suffocating monolingualism that is the exception. There is monolingualism in a large number of other countries as well, although they are a minority.
I have already suggested, in the moments that I have been on my feet, a number of directions that this debate could take. To refer to legal status and its complexities, if we wish to discuss real change we have to think about changing the law, to give rights. It is only through rights that one can secure provision. Welsh language legislation has always been confined to Wales and to the Welsh language. That is how this place has historically treated the language issue. If we are to have proper provision for people who speak the wealth of languages spoken in the UK, we have to think about changing the law. As an old hand in these matters, I suggest that to the hon. Member for Poplar and Limehouse.
Other languages at present do not count in the same way, although there are variations. In Canada, bilingualism exists broadly throughout the country in a limited sense, but much more intensively in Quebec, but Welsh is confined to Wales. I will refer briefly, as an example, to the Welsh Language Act 1967, which provided equal validity to Welsh, so that if something was done in Welsh, it was as if it was done in English. It was equally valid, though not equal. A provision in that very short Act also said that, in the case of a divergence between the two texts,
“the English text shall prevail”.
That was how the question of equality was dealt with. It could lead to the ridiculous situation that the English says “two and two is five” and the Welsh “dau a dau yn bedwar”, and the answer would be five rather than four, because in the case of a divergence between the two texts, the English shall prevail. That is a hard case, and it is a bad law in that respect. The Welsh Language Act 1993 brought in the principle of
“treated on a basis of equality”.
That is not equality, but “on a basis of”. That is essentially how it stands. It is something that one can work with.
I want to refer the Minister to a couple of private Members’ Bills that I have brought in. Perhaps at least one of them might be revisited at some point, either by me or by the Ministry of Justice, if it is interested. It is a reform of the Juries Act 1974. The Act provides that juries must be able to understand English: that is, the language-understanding principle has been conceded. There is a qualification—that jurors must be able to understand English. Judges can disqualify jurors if they do not understand English. The principle of having to understand the language has been conceded.
The question therefore is, how many languages? I would say, in Wales, two at least—and possibly more. Some years ago, I therefore proposed the Bilingual Juries (Wales) Bill, which would in some cases mean that all members of a jury should be bilingual on the basis of the 1974 Act. The principle is that the jury should understand the evidence as directly as possible in the language in which it is presented, not through the medium of a translator, however good translators are. The law on the Welsh language has been reviewed recently by Lord Thomas of Cwmgiedd, who provided a substantial report to the Welsh Government. He did not suggest bilingual juries, by the way, but I think he went quite far in that direction. It is worth having a quick look at that again.
One thing that strikes me regularly is that whenever the use of more than one language is discussed—particularly, I would say, on the BBC—the participants seem to feel the need to find interesting but very distanced examples of languages in New Guinea, Australia or China, and the wealth that we have in the UK, and in Wales in particular, is usually ignored. We have a variety of languages in Wales, and not exclusively in urban areas. I represent a rural area, and there are people who speak a variety of languages. They include people who were born in Wales whose home language is another one.
Indeed, as an interested Welsh speaker, I have occasionally said in this place—sometimes to the surprise of the other side—that English is a Welsh language. If hon. Members ponder that for a moment, they will see the reasoning behind it. In that sense, I would also say that Polish, Urdu, Kurdish, Italian, Sylheti and all the others are also Welsh languages. Language is a social construction; it is something that we all agree on that we can use. In that respect, all languages require and deserve respect, and the ability for people to use them.
I have talked much too long already, and I could go on for a very long time. However, I draw hon. Members’ attention to something that some might not have noticed. This House operates bilingually as well—at times, at least. It is a bit under the radar. The Welsh Grand Committee operates in Welsh and English. My last speech to the Committee was entirely in Welsh, and the majority of Members who contributed did so fully or partly in Welsh as well. The Welsh Affairs Committee also regularly enables the use of two languages. The House’s education department has taken great strides in providing education material bilingually, although when the education centre was built around the back of the House of Lords, I suggested that simultaneous translation facilities should be incorporated—they were on demand in one of the lecture rooms—but to no avail. When Welsh is used in the Palace, we build a temporary shed in the corner of the Committee room, complete with snaking wires across the floor to trip anybody who is unwary.
There are alternatives. In Wales, I am used to having bilingual committee meetings of four or five people, and the fifth—or the fourth, even—is a translator who sits in the corner whispering into a microphone, so that people have translation through discreet wireless headphones. It is possible to do without a shed in the corner and wires all over the place.
We need to look at normalising that sort of provision, not just for Welsh but for any language, to enable anyone to contribute. Translation is a boon. It is useful and, in the end, it is a concession for those who do not speak the other language. I can manage well enough in Welsh, and fairly well in English, but translation is a boon for the people who cannot manage. If we bear that principle in mind, the changes to practice become obvious.
Diolch yn fawr, Cadeirydd; thank you very much, Chair. I am delighted to join this debate celebrating International Mother Language Day. I congratulate my hon. Friend the Member for Poplar and Limehouse (Apsana Begum) on securing the debate, giving her the opportunity to emphasise the importance of the Sylheti language to so many of her constituents. Diolch yn fawr.
UNESCO, which, along with the UN, adopted International Mother Language Day following the initiative by Bangladesh, states that it
“believes in the importance of cultural and linguistic diversity for sustainable societies”
“Linguistic diversity is increasingly threatened as more and more languages disappear.”
That is why I wish to take this opportunity, particularly on St David’s day—dydd Gŵyl Dewi—to talk about the importance of our Welsh language. We cannot underestimate the importance of language to human relationships.
I will give an example of my own experience. My own grandparents—my Mam-gu and Tad-cu—spoke only Welsh in the house. For my mother, it was the language of the home. The bond and nature of the relationship between them is closely linked to their use of the Welsh language. That relationship changed when they spoke English, which was very rare. It was unnatural to them and very uncomfortable. The Welsh language, with its richness of culture, was a vital part of their identity.
The Welsh language story is one of survival, as it is for so many other languages—survival against oppression and prejudice. An example of that is the Welsh not, which was used in schools in the 19th century. Throughout the week, schoolchildren who were caught speaking Welsh had to wear the Welsh not around their neck, and the one who was wearing it at end of the week received a punishment. I am really glad that that is not in existence any more.
The language survived the emigration of Welsh-speaking people to find work after the first world war, and it has survived the inward migration to small rural communities, where Welsh has often remained a first language. The buying up of second homes and the break-up of communities make it impossible for younger people to afford to live in their own communities. The Welsh Government are introducing legislation to try to address that issue. The Welsh language has survived the prejudice of a lack of financial support over decades, as colleagues have mentioned, particularly in the last decade or so of austerity cuts.
On a positive note, thanks to Welsh Government initiatives and campaigning by individuals and organisations such as Cymdeithas yr Iaith, the Welsh language lives on—mae’r iaith yn cadw’n fyw. Welsh is Britain’s oldest language, but it is a living language in daily use. Just under 30% of the population of Wales are able to speak Welsh, and around half a million people use the language daily.
Although my mother received Welsh-medium education at primary school, that was not an option at secondary school. I am very pleased to say that over the last 60 years there has been vast progress. I and my children have received Welsh-medium education. Moreover, since 2017, the Welsh Government have developed their Welsh language strategy, “Cymraeg 2050”. The first four-year phase has the goal of 1 million Welsh speakers by 2050.
I also welcome today’s announcement of the significant additional funding to promote Welsh-medium education support for the work of the Urdd, which is the youth organisation for Wales, by the Minister for Education and Welsh Language.
The use of technology for multilingual learning is the focus of International Mother Language Day 2022, so it is worth noting the increasing spread of Welsh in online learning apps and language podcasts. As I have already mentioned, we have our own Welsh language TV channel, S4C, and the passing of the Welsh Language Act 1993 gave Welsh and English almost equal status, shall we say? That has since been strengthened and updated. In 2011, the Welsh Government established the role of the Welsh Language Commissioner. I would wish, here, to express my sadness at the sudden death on 14 February this year of Aled Roberts, who was the Commissioner since 2019, and had such a depth of love and passion for the Welsh language.
Briefly, our National Eisteddfod epitomises our love of our language. Its poetry and music, and the Llangollen International Eisteddfod, is a mark of Wales’ internationalist tradition. In fact, the first of the reincarnations of the National Eisteddfod actually took place in my constituency in Aberdare in 1861.
I will indulge myself, so let me take this opportunity to share my love and joy of the Welsh language. Wales is sometimes called the land of song—Gwlad y Gân—or, as the Welsh national anthem states, “Gwlad beirdd a chantorion”, the land of poets and singers. The language really does sing to me, particularly through its poetry. That is not only because it sounds so beautiful but because the messages from many of the Welsh poets are also beautiful.
I will read an extract from a poem by Jacob Davies, who was a Unitarian minister and, like so many Welsh poets, had a strong desire to see a more equal and just world, where peace and compassion for our fellow human beings ruled supreme. He said:
“A phan ddaw plant y byd yn grwn
I ganu can o hedd,
Anghofir am y rhannu blin
O achos lliw a gwedd.
O dewch blant o liwiau’r haul
A holl deuluoedd dyn,
I ganu can ein gobaith cu
Fod plant y byd yn un.”
It speaks of children, of all parts of the world, from all families of humankind coming together as one, forgetting our divisions, and singing a song of peace. Diolch yn fawr.
O seun, Sir Edward, and o seun fun ore mi, Apsana. That was “Thank you, Sir Edward” and “thank you to my friend”—to my hon. Friend the Member for Poplar and Limehouse (Apsana Begum), who called this debate—in Yoruba, my late mother’s native tongue. I note that the Minister has recently returned from Ghana and Nigeria, so I say to her, “kaabo” and “akwaaba” which mean “welcome” in both Yoruba and Twi.
My constituency of Vauxhall is a community made whole by a multitude of multilingual people. Nobody living in Stockwell during the finals of Euro 2016 could have failed to notice the vibrant Portuguese community that calls my constituency home. Vauxhall is also home to large Jamaican, Nigerian, Ghanaian, Italian, Ecuadorian, Somalian, Ethiopian and Eritrean communities.
Our schools are home to over 50 languages, spoken by the children of migrants from right across the world. As a result, no one can fail to be exposed to a number of different languages spoken by native speakers walking through the streets of Brixton, Stockwell, Kennington, Clapham, or even just across the river from here, in Waterloo, in my constituency.
Far from the predictions of the doomsayers on multiculturalism, my constituency thrives from that diversity of language and culture. Rather than create a division, the multilingual nature of Vauxhall has harboured tolerance and respect among my constituents. It has allowed diverse businesses to thrive, and exposed all of us to cultures from around the world without even leaving our neighbourhoods. Most importantly, it means that, wherever someone comes from, they will find a home in Vauxhall, whatever language they speak. Whether it is Portuguese, Italian, Somalian, or my late mother’s native tongue of Yoruba, our mother tongues should be celebrated. However, around the world, we are seeing mother tongues marginalised and discriminated against, often with disastrous consequences.
The theme of this year’s International Mother Language Day 2022 is technology and multilingual learning. That is so important after we have seen much learning activity move online due to measures taken to combat covid-19. Lambeth is home to one of the largest Portuguese-speaking populations in the UK. However, some of those Portuguese-speaking pupils are also the lowest-attaining pupil group in Lambeth. Last October, at Vauxhall Primary School, I attended the launch of Lambeth Schools Partnership’s Somos Lambeth, which celebrates and fosters the rise in the achievement and profile of Portuguese-speaking pupils in Lambeth, and supports family and community collaboration.
Unfortunately, reports from UNESCO found that children in education who did not speak a major or national language in their country did not have the same vital access to education as their peers. It is unacceptable for young people to miss out simply for not speaking their mother tongue in the country that they are in. I have one ask for the Minister this afternoon. Will she work with the Government and our international partners to improve access to education for speakers of all languages? E seun, Sir Edward.
I am not sure how long I have to wind up for the SNP, but I will assume it is about five minutes and be gentle and kind to Labour and the Conservatives—as is always my way. It was a very interesting debate and I congratulate the hon. Member for Poplar and Limehouse (Apsana Begum)—it is absolutely fantastic that she secured it. It was inspiring to hear that Tower Hamlets has 90 languages; I am not sure that it is a competition with Vauxhall, but Tower Hamlets is winning 90 to 50. I gently say to the hon. Member for Vauxhall (Florence Eshalomi) that she has another 40 to go in order to hold her head up with Poplar and Limehouse.
The hon. Member for Poplar and Limehouse also talked about the expressing of ideas in various languages; those of us who are multilingual or bilingual understand that intuitively. She said very wisely that one language is never enough. I will help: chan eil aon chànan a-riamh gu leòr, as it is in Scottish Gaelic; ní leor teanga amháin riamh, in Irish Gaelic, which my mother spoke; and, einn tungumál er aldrei nóg, in Icelandic, which I have been trying to learn in Parliament with the help of the Foreign Office. Lessons are available to Members of Parliament, incidentally, in any language. There are ups and downs of doing that. I got hammered in the Daily Express for it—but that is the sort of thing the Daily Express does anyway. However, on the upside, when people in Iceland read the Daily Express, I became a national hero there for 24 hours. I have to thank the Daily Express for pointing out—and it might want to print the article again—that I learnt Icelandic in Parliament with the Foreign Office’s help. I would encourage other Members to take that up; it is a fantastic opportunity.
The hon. Member for Poplar and Limehouse also said that culture wars were a mistake. That is absolutely right; they cut people off, as was mentioned by the hon. Member for Bolton North East (Mark Logan). I was fascinated to hear about his use of Mandarin at home—I think he has told me before. It was amazing to hear what he had to say on language. He also said that he was in Donegal to learn some Irish. I have also been to Donegal; although my mother was Irish, she was not really from a Gaeltacht area. I would say to him that he should persevere, because the spelling systems of both Scottish and Irish Gaelic are logical. The only time that English had such a system was when the monks of Iona went to Lindisfarne and sorted out the spelling for English—which the English language has gone about messing up ever since. I am sure that the monks of Donegal, or Iona, if they were still there, might be willing to come back and help.
The hon. Member for Bolton North East also mentioned the hegemonic place of English in the world. That is an advantage but it is also a disadvantage. We cannot see into other societies as clearly as they can see into our society. We do not know the granular arguments that are going on in Oslo, Stockholm or Helsinki like they know the arguments that are going on in the UK or Washington DC. Too often, the monolingual English world loses a lot of insight as to what other people are doing. I think that is a big mistake.
The hon. Member for Luton South (Rachel Hopkins) emphasised that languages borrow from each other. That was no idle slogan—if I can throw in a Gaelic word. Languages do borrow from each other, and that is something very natural. People often ask me, “What is the Scottish Gaelic for helicopter?” I say to them, “What is the English for helicopter? It is a Greek word, for goodness sake.” Similarly, “television”—
Very good; yes, I remember the great gift to modern democracy and politics that was that certain individual.
The hon. Member for Poplar and Limehouse was also right to make the point about funding and how the Government have to provide it. We are having a nice, celebratory debate about International Mother Language Day; maybe that phrase is benignly sexist in a way, because Scottish Gaelic was my father’s language. However, the hon. Member made the serious point about cuts of 60p in the pound. On a day of good will to the Government, perhaps the point can be made gently to them that they should ensure that languages are not left as barriers to people but rightly become the conduits to a greater understanding that they should be.
The hon. Member for Arfon (Hywel Williams) gave us a scholarly account of Welsh and multilingualism in Wales; I thought his speech was a tour de force. In fact, he devises new terms himself; he is a wordsmith. We have a wordsmith in our midst; we are very lucky. In fact, he was so scholarly that he encouraged us all to go to the library and learn some Welsh. He also emphasised that monolingualism is the exception and that most people in the world are bilingual.
I myself used to be a bilingual teacher, teaching Scottish Gaelic on the island of Mull to young children coming from English-speaking households. They could pick up Gaelic very quickly and very easily. Typically, 800 hours was the amount required for a breakthrough in Gaelic; after 2,000 hours, they were generally quite fluent. They had no problems at all and I would say that their lives were enhanced. Research from Canada and other countries shows the benefits of a bilingual education. One is improved problem-solving in maths and another is that although children study their own first language less in school, they end up being better at it; that is one of the benefits of expanding and stretching the brain, with the gymnastics—perhaps—of learning a second language.
Then there is the Juries Act 1974. I want to check this one, because the hon. Gentleman wants to change it. However, given people’s willingness to serve on juries, perhaps it might work as a perverse incentive to bilingualism; people might claim not to be bilingual to get off serving on juries. That would be my only word of caution there.
The hon. Member for Cynon Valley (Beth Winter) mentioned language death, family relationships and people having different ways of expressing themselves and knowing each other, due to the language they choose to use. I can remember quite vividly that, when my late parents were alive, there was an occasion when speaking around the table were myself, my mother and my father; my two sisters were not there. I was speaking Gaelic to my father and English to my mother; my parents spoke English together; and all three of us understood each other. It felt alien to me to speak English to my father. It felt a bit of work to talk to my mother in Gaelic, because I knew she had learned Gaelic; she used to envy me as a child, because I had gone from being a baby to vaulting past her in linguistic ability by the time I was four or five.
The hon. Member’s comments really brought back to me how people are comfortable in some languages and uncomfortable in others. I know that some of my own neighbours would prefer by far to use Gaelic all the time. I asked one neighbour to do an interview for radio; it was just about agriculture in the area. He asked me if the interview was in Gaelic or English. I said it was in English and he refused point blank to do it, saying he was not comfortable enough in English to do it. He said, “I dinnae want to be doing it”.
The hon. Member also mentioned how Welsh has survived the economic forces of people coming in and buying houses, which happens in many places. We see it perhaps particularly with Cornish; now it is a dead language, but we have to remember it in this debate, because it is one of the older languages of the British isles. I would put Manx in there, too; we have mentioned Irish Gaelic and Scottish Gaelic. And today, of course, we are conversing in one of the Johnny-come-lately languages to these islands, if I can gently say that, which is English; of course, it is also a very welcome language.
The hon. Member also mentioned the focus on technology. I should say that 500,000 people have started to learn Scottish Gaelic on Duolingo. It is also important if there can be spellcheckers in various programmes, to help people in their various languages. It helps and increases the use of those languages, and makes it seen that the languages are about. I say that because I know myself that if somebody joins the company and we are speaking in Gaelic, we will move to English, but that gives people an impression that there is no Gaelic about. The Welsh are renowned for not doing that; whether that is true or not, I do not know. It is possibly detrimental to the Gaelic language that we do that.
There was also mention of poetry and music. I should also put an advert in for BBC Radio nan Gàidheal, available on BBC Sounds. From 10 to 12 every weekday morning, people can listen to “A’ Mire ri Mòir”—a fantastic programme, where the best of traditional Gaelic songs can be heard. On Friday nights, if people want to chill between 6 pm and 9 pm, they can listen to “Na Dùrachdan”—that is a great programme as well. I think I am making a good case for Gaelic there.
Everybody has emphasised that there are many languages about and we are very fortunate to have them, whether that is Mandarin, Irish Gaelic, Yoruba or Bangla, or any of the number that have been mentioned. In Scotland, we have seen a resurgence in Gaelic, which has been low. We have about 87,000 speakers. The Gaelic school in Glasgow is doing particularly well, having gone from 450 pupils to 1,300 in the last 10 years. A second school is on the way. In the Highlands, almost 2,000 pupils are in Gaelic medium education. My own constituency, the smallest by population in this Parliament, has 1,400 students in Gaelic medium education. The Scottish Government are planning to bring forward a new Scottish languages Bill, which will support not only Gaelic, but also the Scots language.
The hon. Member for Pontypridd (Alex Davies-Jones) had some fantastic boasts about what Labour were doing in Wales. That is fantastic—every political party should have boasts on what they are doing for second languages. Languages do not belong to anybody. The hon. Member for Bolton North East, who is originally from Northern Ireland, made that point. I pay tribute to Linda Ervine in Northern Ireland who does an awful lot, from the Unionist loyalist community, for the promotion, in a sensible and mature way, of enhancing her life and the lives of those around her through the use of the old language of Ireland, while not in any way diminishing any other language—a point we all should be making.
I have often heard the opinion that it would be great if we all spoke the one language. On reflection, when we think about that, it is not true, although the language of heaven might be a separate point—the Welsh have claimed it is Welsh, actually. It would be great to see an eternal life, not where we have one language, but where we have the capacity to understand and to speak the thousands of languages that are about and to get the insights, the views and the jokes. Bilingual jokes rely on two languages; our sense of fun would certainly grow. I have never heard anybody who can speak however many languages say that they wish they could speak fewer languages. We always hear them say, “I wish I could speak more.”
As politicians, we have to look at the resource in communities across the United Kingdom of Yoruba, Bangla and so on—those 50 or 90 languages—and maintain them, and keep them. In years to come, those might be the languages of trade and commerce. They are a direct route into another community; there is a fantastic dividend for everybody, not just through the joy of knowing that language, but through the access to and communication with other people. That is essentially what language is—a communication with other people, and that communication is very special when people can use idiosyncratic and family terms together.
I thank you for chairing today’s important debate, Sir Edward. Let me start by saying that the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) is still a legend in Iceland, as I know from personal experience.
On this day of all days, I start by saying, salaam alaikum, shalom, sat sri akaal, namaste, dobry den—and, most importantly, because it is the only other language I speak, bienvenue à notre débat d’aujourd’hui.
I was privileged to grow up in a French-speaking household. My father’s first language—his mother tongue— was French. My grandmother, who was born in Switzerland, spoke French. She also spoke eight other languages, including a language that I doubt many people have heard of, called Ladino. That was the language of the Sephardic Jewish community that left southern Spain in the 15th century and emigrated across to the Netherlands, then a Spanish colony, and to the Ottoman empire, where Jews were given sanctuary for many centuries, until the Nazis destroyed that community—among them, my own grandparents.
Today’s debate comes at a very important time. I thank my hon. Friend the Member for Poplar and Limehouse (Apsana Begum) for securing the debate. It is right that we should be debating something as fundamental as language, which is so critical to the avoidance of conflict and the keeping of peace. As we have heard this afternoon, Britain rightly prides herself on the diversity of our communities up and down the country. It is what makes our towns and cities strong and unified, and it keeps our economy going. Many Members have made that point. We are privileged in this country to have an education system that is available to all who need it and in the language that they need it. Sadly, though, 40% of the world’s population does not have access to an education in a language they speak or understand. That has a severe impact on millions of children across the world, and it is especially damaging during their formative years.
We should also realise that this issue mainly affects people living in poverty. In Côte d’Ivoire, 55% of grade 5 students who spoke the test language at home—French—learned the basics of reading in 2010, compared with only 25% of those who spoke another language. As UNESCO put it,
“If you don’t understand, how can you learn?”
We must work with our international partners and allies to empower multilingual education and ensure that no child is ever left behind. This is especially important in communities where significant ethnic minorities are present—here in the UK, for example. The domination of an official language in countries can lead to severe social and economic disparities between those who speak the official language and those who do not.
Most disturbingly, as has already been mentioned, we have seen Governments actively repress linguistic freedom in some parts of the world. In China, the people of Tibet, as mentioned by my hon. Friend the Member for Stockport (Navendu Mishra), and Mongolia and, most recently, the Uyghur Muslims in Xinjiang have had their languages banned or severely restricted as part of the Chinese Government’s twisted obsession with cultural policy.
The United Nations defines
“Any deliberate act committed with intent to destroy the language”
as a clear breach of the 1948 Convention on the Prevention and Punishment of the Crime of Genocide. Before this repression began, 80% of those who lived in Tibet could speak the Tibetan language. I have been there and experienced it myself, and I have heard it myself from Tibetan colleagues and friends here in the United Kingdom. Today, nine out of 10 Tibetans do not know how to write their own language. How tragic is that? Repression like that is completely unacceptable. I would be grateful if the Minister could tell us what action the Government are taking to try to co-ordinate an international response to those affected by appalling attacks on their culture and language.
The diversity of language is not only important in keeping our societies sustainable, but it is vital for our culture and our diplomacy. It is how we put forward the case for Britain abroad. We have some brilliant and truly amazing institutions with the ability to galvanise our country’s soft power, and we must start using them again. I ask the Minister: how are the Government working with our institutions abroad, the British Council, for example, to empower multilingualism?
The pandemic has shown us just how effective distance learning can be during a crisis. It kept schools going across the world. Given that this year’s theme of International Mother Language Day is
“Using technology for multilingual learning”,
I ask the Minister what economic and technological support is being given by the UK Government to countries that are struggling to provide remote learning for their children.
I am proud to represent Leeds North East, where over 20 languages are spoken and where some schools have more than 100 languages spoken—Carr Manor Community School, for example. It is good for our communities and our children’s education and cultural prosperity. However, there is still work to do at home. As we have heard this afternoon, there are hundreds of thousands of people in our United Kingdom who have been left behind because they cannot speak English. That is severely detrimental to their physical and mental health, as well as their societal and economic wellbeing.
In London alone, as my hon. Friend the Member for Vauxhall (Florence Eshalomi) mentioned in her speech, almost 350,000 people are unable to speak English, and, worryingly, around 60% of them are women. It is vital that we look to empower the over 7,000 different languages both in our country and across the world, and the Opposition stands ready to work with colleagues from right across the House to achieve this. Let me conclude by using some of the few words I have in Russian—net voyny, which means “no war”.
It is an honour to serve under your chairmanship, Sir Edward. I begin by thanking the hon. Member for Poplar and Limehouse (Apsana Begum) and all the hon. Members for speaking. I also wish a particularly happy St David’s day to all our Welsh colleagues.
It has been wonderful to hear everyone speak in so many languages. I am not going to speak in another language, but I was deeply grateful to the headteacher of the Royal School for the Deaf Derby for teaching me how to introduce myself. My name is Vicky. [In British Sign Language: “My name is Vicky.”] Also, to the children who come each year to Chelmsford for our annual carol concert for the deaf and hearing impaired, who taught me how to say “Happy Christmas”. [In British Sign Language: “Happy Christmas.”] That is “happy”, with a big smile, and then a reindeer, stroking the snow and then putting their foot down. I hope hon. Members remember that.
As the hon. Member for Poplar and Limehouse pointed out, International Mother Language Day was established by UNESCO in 1999. It is an annual global celebration of cultural and linguistic diversity. It was a Bangladeshi initiative inspired by Bengali students, who sacrificed their lives for the right to speak in their mother tongue in what was then East Pakistan. Those students have been honoured annually in Bangladesh since 1952 on Language Martyrs’ Day, which also marks the significance of the movement as a cornerstone of Bangladeshi independence.
Successive UK Governments have a proud history of standing up for minority groups, including linguistic minorities. International Mother Language Day promotes linguistic and cultural diversity across the world. It encourages the preservation of more than 6,000 languages and promotes the need for multilingual education to aid learning and preserve cultures. This year’s event focuses on the challenges and opportunities of using technology for multilingual learning. That is timely following the pandemic and the way the world has had to reimagine the way we use technology to teach and learn.
The Department for Education has invested significantly in devices to support disadvantaged students and platforms and connectivity for schools and colleges, particularly those in rural and hard to reach areas. Across the world, however, we know that many lack the equipment and internet access needed for home learning during the pandemic and more must be done to ensure quality education for all. The UK is committed to ensuring that everyone can access education and learn. Last year, despite covid, under our presidency of the G7, we committed to two important global targets to get 40 million more girls in school and 20 million more girls learning by 2026.
The impact of school closures during the pandemic means that the initiative to get girls learning is more urgent than ever. We recently launched the prestigious Global Education Evidence Advisory Panel report with the World Bank and UNICEF to provide practical, evidence-based recommendations to drive learning recovery globally. Following on from the global launch of the report, the Foreign, Commonwealth and Development Office will be hosting in-country launch events, starting with Bangladesh on 12 March, which—the hon. Member for Vauxhall (Florence Eshalomi) will like this—will be followed by events in Ghana, Tanzania, Kenya, South Africa and India.
We remain committed to our call for 12 years of quality education for all children, especially girls. Last year, the Foreign Secretary publicly committed to restoring gender equality funding to pre-cut official development assistance levels, as part of her vision to put women and girls at the heart of our international development strategy. We are delivering on this commitment to girls’ education all around the world. For example, in Bangladesh, we recently announced a £54 million programme supporting access to improved education for all.
The Government recognise the many benefits of multilingualism, and International Mother Language Day is one of myriad events in which we celebrate the cultural and linguistic diversity of the UK. Doing so builds tolerance, understanding and solidarity between us. Linguistic diversity is one of the defining aspects of our country.
My hon. Friend the Member for Bolton North East (Mark Logan) spoke of his valiant efforts to learn Irish. I, too, have spent many a summer in Donegal, but have never tried to learn Irish—it is an incredibly challenging subject, but I encourage him to keep going. We remain committed to linguistic diversity and protecting minority languages across the UK, including Cornish, Manx Gaelic, Scots Gaelic, Scots, Ulster Scots, Irish and Welsh. Today, there are over 300 languages spoken in our schools.
As it is St David’s day, I remind colleagues that Welsh is the oldest indigenous language of these British Isles. It is also one of the oldest in Europe, and since 2011 it has been a language protected by law and has had equal status to English in Wales. The UK Government are supporting the Welsh language, including the aim of achieving 1 million Welsh speakers by 2050, and the Government have also increased the use of that language in public debate—including in the House of Commons, as was seen most recently in the Welsh Grand Committee debate held on 18 January 2022. The hon. Member for Pontypridd (Alex Davies-Jones) spoke about the many people who turned to learning the Welsh language via the Duolingo app during lockdown; my own husband contributed to that great effort.
Our country is blessed by the dynamism and contributions of our many diaspora communities, and I again thank the 600,000 British people of Bangladeshi origin who live in the UK. Our diversity makes it easier for us to forge meaningful and productive partnerships with countries across the world—again, I return to Bangladesh, because over recent months we have celebrated the golden jubilee of Bangladesh’s independence and of UK-Bangladesh relations. For the past five decades, the UK and Bangladesh have worked together as friends and partners to overcome challenges and help our countries to become more secure and prosperous.
Bangladesh has made remarkable progress. It has lifted millions of people out of poverty and made giant leaps forward in life expectancy. It has built a dynamic economy that is among the fastest growing in the world. It has supported international peace and stability, being the largest contributor to UN peacekeepers. Over recent years, Bangladesh has showed incredible generosity by hosting nearly 1 million Rohingya refugees from Myanmar, and we have stood with Bangladesh, contributing £320 million to its refugee programme. We have worked particularly closely with Bangladesh over the past year in response to the covid pandemic and to tackle climate change, and the UK is proud to partner with Bangladesh on so many fronts.
The hon. Member for Leeds North East (Fabian Hamilton) spoke about the situation in Tibet. We have very serious concerns about that situation, including about reports of the erosion of the Tibetan language and culture. We continue to urge China to respect fundamental rights across China, in line with its own constitution and international frameworks. The hon. Gentleman specifically asked what the Government are doing to co-ordinate international efforts: maybe he is in two countries at once, because earlier today, the Foreign Secretary expressed her concern about human rights violations in Tibet at the Human Rights Council taking place in Geneva today.
At this time, all across the UK, we are thinking about the really brave people in Ukraine. Ukraine is a multilingual nation, with both Ukrainian and Russian spoken widely in many households. Ukraine does not restrict Russian as a language used by citizens; Russian is spoken frequently in the street and freely in people’s homes. Millions of Ukrainians across the country speak Russian as their first language and face no problems. Let me use my language very clearly: we call on Putin to remove his troops and stop the violence. [Hon. Members: “Hear, hear.”] We in the UK stand firmly with the people of Ukraine, and are proud to be stepping up our role and playing our part in responding to the terrible situation on the ground. Yesterday, the UK announced the first phase of bespoke humanitarian routes for the people of Ukraine, responding directly to the needs and asks of the Ukrainian Government. We will continue to do so.
At this dark hour in human history, with conflict raging on the European continent, we should welcome all initiatives that build understanding and tolerance. International Mother Language Day is one such initiative, and I thank our friends and partners from Bangladesh and UNESCO for it.
I thank everyone who has contributed today to what has been a very positive debate. It is clear that valuing linguistic diversity helps people with their understanding of language and culture, raises educational attainment—as the Minister has mentioned—and celebrates the plurality and richness of our multicultural communities. It is important for us all to continue to stand with and celebrate all of our communities: diverse, dynamic, multicultural and multiracial, with people of all different faiths and none from everywhere around the world, including Ukraine.
Question put and agreed to.
That this House has considered International Mother Language Day 2022.
Household Support Fund
I beg to move,
That this House has considered the household support fund.
It is a pleasure to serve under your chairmanship, Sir Edward, and a pleasure to speak about what is one of the Government’s better-kept secrets: the household support fund. I thank the Minister for his time today—I am sure that he has better things to do than listen to me. I also thank the Trussell Trust and StepChange for their assistance in advance of the debate.
In US presidential elections, there is a phenomenon called the October surprise, when something occurs that transforms the election in an unprecedented way. Well, we had our own October surprise last year, when the Chancellor announced a £500 million household support fund, to be spent between 6 October last year and the end of March this year. However, it seems to be the Government support package that dare not speak its name, so rarely do I see it referred to in the media. Voluntary sector organisations in Blackpool have simply not heard of it, despite it offering some £1.7 million to households in need across the town, which has some of the most deprived communities in the country. I therefore very much want to talk about it. That is not because I am going to demand that the Chancellor spend £500 million every year—year in, year out—but because I want the Department for Work and Pensions to learn from the experience of the fund, and the previous temporary covid grant schemes, to better target existing crisis funding.
The Government have invested nearly £1 billion in this type of support in the last two years. It is now time to enable local authorities to plan for the long term and put in place strategies that can implement best practice around co-ordination. Specifically, the Government should review the Welfare Reform Act 2012, which localised significant welfare powers, including the delivery of council tax reduction schemes, discretionary housing payments and so on. A review one decade on, alongside a consideration of interventions during the pandemic, would allow for a proper consideration of how best to deliver crisis support in the future. We have to take the lessons from the household support fund and apply them to existing Government schemes, so that they work better, avoid duplication and empower local government to be a more effective delivery vehicle. Central Government will always pick up the tab if a local government response does not meet need.
However, although crisis support is delivered locally, too often it is not part of the local authority’s wider support network, which can boost incomes and prevent crises from happening in the first place. For example, someone who needs support with their housing might not be referred further to the local welfare assistance scheme in their area, as it might be located in a different department in the council. The provision of cash crisis support not only benefits the recipient but helps to prevent higher-cost interventions further down the line. Milton Keynes Council used a New Economy unit cost database to estimate the cost savings to other public services from its own local welfare scheme. It estimated that, over a full year, awards made by the authority worth £500,000 led to a total estimated combined saving for central Government and local government of almost £10 million.
We know that in the weeks and months to come we will see people struggle with energy costs, increasing inflation in food basics in the supermarkets—as the campaigner Jack Monroe has discovered—and other higher costs across the entire household budget. The need for this type of support is not going to dissipate. We have to maximise the effectiveness of what the Government already spend. The Government have a duty to focus on preventing destitution in the coming months. Many people have had an adverse life experience in the previous 12 months, such as becoming homeless, becoming sick or disabled, or facing a bereavement. Those experiences interact with the existence and persistence of poverty in our communities, and can tip people further into destitution. In those situations, locally run services have a vital role to play, from providing support with rental arrears to delivering cash-first support to people who are facing immediate financial shortfall.
We know that local policy interventions can make an important difference, preventing a short-term shock from turning into a long-term problem. However, local support is often not joined up effectively, with a lack of targeting and communication, and poor links between statutory and voluntary sector services. For example, someone who needs support with their housing might not be referred further. In some areas, local welfare assistance will not even exist.
Indeed, there is evidence that third sector delivery can be more effective than that provided by councils. The North East Child Poverty Commission’s recent report on local welfare assistance schemes highlighted Darlington Borough Council, and said
“it is felt the delivery of the service by Citizens Advice has been ‘much more effective in identifying and addressing the underlying reasons for people’s financial crises’”
than the council support.
Time and again, when I speak to third sector providers of emergency support, I hear how the slowness of the local government response through existing funds means that the charity uses its own funds to meet crisis needs, because the recipients simply cannot wait, when the state is already providing local government with the money to do just that. This seems wholly counter-productive to me.
The housing support fund has been a chance to fix this disjointed approach, but it is critical that the evaluation of how to reform both this scheme and existing schemes begins now. There was meant to have been a review of two previous covid grant schemes, announced back in February 2021, when I first introduced a ten-minute rule Bill to reform the local welfare assistance scheme. Can the Minister update me on the progress of that review? Is it complete? When will it be published?
The household support fund and local welfare assistance schemes are the safety net that exists beneath the safety net, but there have long been concerns about both the adequacy and, more importantly, the efficiency and coverage of local welfare assistance schemes. The household support fund is a chance to correct that.
One might think it too soon to publish a review on the household support fund when money will still be being disbursed in voucher form well into April. Yet we also know that an interim management information return was required by 21 January 2022 for spend between 6 October 2021 and 31 December 2021. This was presumably to make an assessment of progress so far, so I hope the Minister might be able to say a little more than some might anticipate by telling everybody how the fund has performed so far; otherwise, why collect the information?
I have some specific queries about how the Department for Work and Pensions intends to learn from this fund. What metrics will the household support fund be evaluated against? What would success for the fund look like? When it was announced, the fund pledged that
“everyone should be able to afford the essentials.”
Does the Minister agree that this is still the purpose of the fund? If so, how will he assess whether it has met this objective, which was set by the Chancellor? Indeed, how would he define “essentials”? It is a nebulous term. Do the Government intend to map how the household support fund has been delivered by each local authority and make that information publicly available?
One significant problem, pre pandemic, was the unwillingness of some councils to even operate a local welfare assistance scheme. The Government provided some £167 million to local authorities for these schemes. I know that was not ringfenced, but it was provided as a visible funding line. However, recent research by Liverpool-based charity End Furniture Poverty found that increasing numbers of upper-tier local authorities no longer run local welfare assistance schemes. This has got worse during the pandemic and there are now 32 such authorities, up from 23 in 2019, including authorities the size of Hampshire, Nottinghamshire, Nottingham, Stoke, Staffordshire and Wolverhampton. Many other councils spend less than 10% of what was allocated to them, and few operate the full wraparound service that represents best practice.
Research by End Furniture Poverty shows the situation has become worse during covid, despite funding for local welfare doubling, with money diverted to increasing free school meal provision, for example, despite a separate Government revenue stream precisely to fund that. Can the Minister answer these questions? Based on the interim management information I know he has available, how many local authorities have used the household support fund to improve and cross-subsidise their own local welfare assistance schemes?
In extreme cases, local authorities with limited capacity to deliver and spend this funding instead provided blanket grants to voluntary sector organisations, including food banks. The Trussell Trust itself thinks it is questionable whether this is an effective or intended use of Government funding, and that that risks entrenching emergency food aid as part of the local welfare system. What assessment has the Minister made of how much funding the voluntary and community sector has received through the household support fund?
The guidance for the fund lists a range of groups beyond just food banks, including GPs and schools. Will the Minister commit to publishing data on which third-sector groups the money has gone to, segmenting it by category, so that we can better understand best practice and different delivery models? Does he believe that local authority funding of food banks is an effective use of public funds? On what basis is that assessment being made? Do returns show that more or less was spent in the period to December? What impact will that have on the guidance that all moneys must be spent by the end of March? More fundamentally, given all the data now available, will the Government commit, as per my previous ten-minute rule Bill, to a review of all local support, including the household support fund, local welfare assistance schemes, discretionary housing payments and council tax support?
The North East Child Poverty Commission’s report, which I referred to earlier, details the tangled web of potential support across the north-east that many people would argue needs rationalising. I quote from the report as an example, not because I know the north-east particularly well. The commission writes:
“accessing the Gregg’s Foundation Hardship Fund; utilising stocks of second-hand furniture and white goods stored by some councils; providing support via Section 17 of the Children’s Act 1989; the use of Discretionary Housing Payments, Council Tax Support and Section 13a discretionary Council Tax reductions; accessing assistance from social housing providers; using ward member budgets; referring into Warm Homes teams; in the case of one authority, using a pot of funding bequeathed to them by a resident for local people facing financial hardship.”
So many pots, and so little co-ordination. I could easily add universal credit crisis loans, given how many are effectively written off; the availability of upcycling in the community these days; the British Heart Foundation furniture charity shops that I see across the north-west; domestic violence charities using public grants to provide emergency packages; council-funded food banks; and individual schools in my constituency topping up pupils’ prepayment meters. The list of publicly funded sources of short-term financial help is endless, but they can actually start to cancel each other out. All this public funding needs bringing together under one branded title that people know exists, with minimum standards of provision set out in statutory guidance. There should not be a differently named project in each council, with different criteria, different application processes and different types of assistance.
I should explain some salient background points to the Minister, whose predecessor, the hon. Member for Colchester (Will Quince), bore the brunt of my obsession with this topic. Low-income families have an average of only £95 in savings, and some 40% of those aged 20 to 29 have no savings at all. These sorts of situations reinforce what is called the poverty premium—a term that I heartily dislike—which is increasingly prevalent. For example, if someone has no cooker, it may mean that they spend more on costly takeaway meals, if they are time-poor. Having no washing machine might mean someone paying £4 down the launderette, and £3 for the dryer, rather than 25p for the average home wash. Local welfare assistance schemes offer timely support, but there should be a wider challenge to policy makers to find ways to incentivise small or even tiny amounts of savings, to improve financial resilience over time.
From professional bodies such as Perennial, which cares for those in the horticulture sector, to religious groups such as St Vincent de Paul or Quaker Social Action, there are myriad charitable providers out there. The Association of Charitable Organisations counts some 800 providing practical support alone. The overlapping tapestry of voluntary support is a credit to our nation’s sense of collective endeavour, but together these organisations can achieve so much more as part of a wrap-around, best practice model that reduces longer-term costs for councils and social housing providers. In discussions with them, however, I hear time and again that they do not know about local government schemes, or that they are too time-consuming or difficult to access. Speed matters, so they deploy their own funds, which might otherwise go on things that the Government already make provision for, but that councils do not always use for that purpose.
There are exceptional private sector providers out there that connect individuals in need of help with funding bodies. Charis Grants and Family Fund Business Services are just two examples of organisations that provide platforms through which public bodies can access goods and supply them to those in need. Pin4 Cash and Cash Perks can immediately deliver a “cash first” solution straight to those needing help. Why are these providers not playing a more salient role in how the Government seek to deliver help to the frontline? They offer greater efficiency and the help can be more precisely targeted.
We also welcome Toynbee Hall and Fair4All Finance’s piloting of no interest loans. That is modelled on what Good Shepherd does in Australia, and the pilot was commissioned by the Treasury, which I welcome. I recognise that this needs doing right. Will the Minister assure me that he will personally take an interest these schemes, which should reduce long-term demand for local welfare assistance schemes by creating financial resilience, and which will enable people to access some white goods without being pushed into a poor financial situation?
All of that would mean that what the Government spend would go that much further, and then we would not have the usual debate in this place in which Members, particularly Labour MPs, demand ever larger amounts of new money. How we spend matters as much as how much we spend. The household support fund has been the largest exercise in delivering emergency financial support since world war two. If we do not use this opportunity to ask key questions and reimagine how we provide this support, we are missing a crucial opportunity to bring the financially vulnerable back from the brink of destitution.
It is an honour to serve under your chairmanship, Sir Edward. I congratulate my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) on securing this debate on the household support fund. He is a thoughtful and dedicated constituency MP who has a lot of experience in this area. I take his comments and observations very seriously. I will try to answer some of his points—he has made quite a few, but that is good.
As Members will be aware, we introduced a £500 million support fund last October to help vulnerable households with essentials, running until 31 March this year. That was in recognition of the fact that some people required extra support over the year as we entered the final stages of the recovery from the pandemic. The household support fund has provided £421 million of support to local authorities to help vulnerable people in England with the cost of food, utilities and wider essentials. The Barnett formula has been applied in the usual way, meaning that the devolved Administrations also received almost £80 million.
The household support fund helps vulnerable households with food, energy and water costs, and many local authorities have used the funding to support vulnerable households with children by providing free school meal vouchers during the holidays. The support also covers any form of fuel that is used for domestic heating, cooking or lighting, as well as water for drinking, washing, cooking, or sewage and sanitary purposes. The household support fund can be used to support wider essential needs that are not linked to energy and water, and those may include, but are not limited to, support with other bills, including broadband, phone bills, clothing and essential transport-related costs.
In response to one of the concerns of my hon. Friend the Member for Blackpool North and Cleveleys, there is no prescriptive definition of essentials, although our guidance for the household support fund outlined how we felt the funding ought to be targeted. Authorities have discretion—that is an important word—to assess what is reasonable when it comes to assisting those in genuine need this winter. Local authorities also have discretion on exactly how this funding is used in their area. They can take a variety of routes: they can offer vouchers to households, directly provide food or other goods, or issue grants to third parties, who then distribute goods to vulnerable households on their behalf.
Local authorities set their own eligibility requirements, and they have been encouraged to use a wide range of data and sources of information at their disposal to identify and provide support to a broad cross-section of vulnerable households in their area. Assistance from the household support fund is not restricted to households in receipt of benefits. At least 50% of the funding is dedicated to vulnerable households with children, while up to 50% is available to vulnerable households without children, including individuals.
As my hon. Friend has set out, the household support fund is a form of local welfare assistance. Local welfare assistance is a local authority-delivered discretionary safety net beyond the national benefit system that can provide one-off or infrequent assistance for people in need. Funding for local welfare assistance is included in the local government finance settlement. This Government remain committed to supporting people on low incomes, and the household support fund is just one element of a wider package of support. We established several local welfare schemes during the pandemic, including the covid winter grant scheme, which ran from December 2020 to April 2021, and the covid local support grant, which ran from April 2021 to September 2021. The household support fund built on this support, and it means that we have provided nearly £1 billion in local welfare support since December 2020.
Those schemes offered quick, targeted support for families when they needed it most. Local authorities in England made six million awards through the covid winter grant scheme and a further 4.3 million through the covid local support grant. We will be internally reviewing the delivery of those schemes to learn lessons and inform policy making moving forward.
In order to support local authorities in implementing the covid winter support scheme, covid local support grant and household support fund by identifying those most in need, my Department has shared data on universal credit claimants on low incomes who are eligible for free school meals or free prescriptions, whether those are households with or without children. The data is shared with authorities through local welfare provision regulations. There are many examples of good practice delivery of the household support fund.
Blackpool, which includes the constituency of my hon. Friend, has done some good work in this space. Happily, it is a place I am familiar with, having recently attended a jobs fair at Blackpool Tower for the Kickstart scheme. I think that was back in September. Time flies. Blackpool has been allocated £1.7 million from the household support fund, which is being used to provide short-term financial support to vulnerable households in the area.
Indeed, Blackpool is demonstrating the value and the flexibility of the household support fund by prioritising costs relating to energy, water bills and items relating to keeping warm, including winter clothing, blankets, draught excluders and window sealants. The scheme is also providing funding for boiler repair services. That demonstrates just how responsive and diverse the support under this scheme can be. Another example of good practice can be found in Leicester. It is responding to an increase in the wholesale price of gas by issuing an energy grant of, on average, £340 per eligible household through the fund. It has been providing travelling communities with grants to refill bottle gas, and around 300 foster family households are receiving one-off grants of £500 towards the increased cost of utilities and fuel.
Likewise, Lambeth has made good use of the fund. It provided additional support to community organisations that provide food boxes to harder-to-reach communities; the food is tailored to reflect the diverse cultural make-up of those areas. It also encouraged residents to apply for further support by promoting the fund through the borough’s health and wellbeing bus, which visits high footfall areas and provides covid vaccinations and other health and wellbeing offers. It is a very creative approach, which is to be commended.
My hon. Friend highlighted the important role of third-party providers in delivering support locally. Local authorities have worked closely with third parties on delivery of the household support fund, and they have been an important part of how the scheme has been delivered in some areas.
Darlington Borough Council, which I think my hon. Friend mentioned, has a mature relationship with the charity Bread and Butter Thing. The charity’s core mission is to make affordable food available to struggling families. It already works with local community organisations in a well-established network, making it an ideal partner for the borough council to approach for help with distributing the household support fund. A partnership was agreed, whereby it would administer fuel voucher applications and provide free bags of shopping for those in greatest need, in addition to running weekly mobile food clubs.
The household support fund ends on 31 March, but other support for those on low incomes will continue to be available after this point. We understand that people are concerned about pressure on household budgets, and we are taking action to help. The household support fund is just one part of a £12 billion fund that the Government are spending this year and next on providing wider support, in order to ease cost of living pressures. Help is targeted at working families, low-income households and those in the most need and with vulnerable families.
We are cutting the universal credit taper rate to make sure that work pays, and are uplifting the work allowance, which will put an extra £1,000 a year into the pockets of two million low-income families. We are also freezing fuel and alcohol duties to keep costs down, and are increasing the national living wage to £9.50 per hour in April, providing an extra £1,000 in pay for a full-time worker. It has risen every year since it was introduced in 2016.
In addition, in response to the concern about increasing energy prices, the Government recently announced a three-part plan of support to help households with rising energy bills. That support is worth £9.1 billion in 2022-23. That includes a £200 discount on energy bills this autumn for domestic electricity customers in Great Britain, which will be paid back automatically over the next five years. There is also a £150 non-repayable rebate on council tax bills for households in bands A to D in England, as well as a £144 million discretionary fund for local authorities, so that they can support households that need assistance but are not eligible for the rebate.
There is also existing support to help people with the cost of fuel or energy, for example through the warm home discount and the winter fuel payment. That will help households with rising energy costs. Cold weather payments provide £25 a week extra for poorer households when temperatures are consistently below zero. We have increased the value of healthy start vouchers to £4.25, and we are also investing more than £200 million a year, from 2022, in continuing our holiday activities food programme. That is already providing enriching activities and healthy meals to children in English local authorities.
My hon. Friend mentioned local authority funding for food banks. He is well aware that they are independent and charitable organisations, and the Department for Work and Pensions does not have a role in their operation. There is no consistent and accurate measure of food bank usage at a constituency or national level. We understand the data limitations in that area, so in April 2021, we introduced a set of questions into the family resources survey to measure and track food bank usage. The first results of those questions, which will be subject to the usual quality assurance processes, are due to be published in March 2023. I am sure that the data will be of great interest to him, as it will be to me and Ministers in the Department.
To conclude, the household support fund is one of a number of ways the Government have supported those who need help most across the country. The household support fund has provided local authorities with the flexibility to tailor their provision to individual needs, and it allows them to target a broader cohort of households. We are unfortunately not yet able to discuss the interim management information collected from the household support fund so far. The information gathered from the scheme will be published once the scheme has closed and the data has been properly analysed and checked by our officials. That management information on the household support fund will provide helpful further details on how local authorities have been using this important funding. The covid winter grant scheme management information was published in June 2021, and the covid local support grant management information was published in September 2021.[Official Report, 8 March 2022, Vol. 710, c. 4MC.]
That information will inform future policy decisions in this area, as we look to learn lessons from the support we provided throughout the pandemic and beyond. I am sure that that information will be of interest to my hon. Friend, who has once again this afternoon demonstrated his expertise in this area of policy, and his commitment to improving the life chances of vulnerable people, not just in Blackpool but across the country. I am grateful for his interest and expertise.
Question put and agreed to.
Shared Prosperity Fund: Devolved Administrations
I beg to move,
That this House has considered the shared prosperity fund and the devolved Administrations.
It is a pleasure to serve under your chairship, Sir Edward.
I am grateful for the opportunity to raise an issue and hopefully to get some clarity on a matter of concern and potential opportunity for a number of third sector partners and others in Northern Ireland. It has been almost five years since the shared prosperity fund was first floated as the replacement for the loss of EU structural funds after Brexit. The SPF was included in the Conservative manifesto, which claimed that the focus would be on reducing inequalities between communities and that the Government would consult widely on the design of the fund. The manifesto explicitly outlined the involvement of the devolved Administrations, although stakeholder engagement events a few years ago were characterised to me by polite generalities and weak assurances, and unfortunately the Government do not appear to have met those commitments, either about the breadth and the scope of the scheme or about the engagement with partners.
From what information we have, we know that funding will come directly from Westminster, without the involvement of local authorities or devolved Parliaments. In Northern Ireland, some of the bodies that have been administering European funds for the last several decades and that have experience and trusted links are apparently being retired at this point, amid a centralisation of power. The phrase “Take back control” resonated with many people, but with some of the funds that have traditionally underpinned social progress and economic progress in Northern Ireland, it appears to mean taking back control and handing it directly to London.
I am grateful to the hon. Lady for giving way and I congratulate her on securing the debate on a very important issue—perhaps the most important issue for the economic development of the respective countries of the UK. The hon. Lady is right that this is an unashamed power grab by the UK Government. It fatally undermines the ability of the Welsh Government, the Northern Ireland Government and the Scottish Government to deal with their role in economic development. A key part of the role, of course, is strategic regional planning. The constitutional issue is very important, but so is delivery. The way that the UK Government go about the process will fundamentally undermine strategic regional economic planning in our respective countries.
I agree. As I say, there are opportunities and willing partners, but unfortunately it appears that the funding is being delivered over the heads of those who have an interest in and a proven track record on a number of the issues.
The latest information we have is that the fund is set to operate from April 2022, which is next month, replacing funds such as the European social fund and regional development funds that have provided vital opportunity for infrastructure and specifically to support some of the most marginalised and vulnerable individuals in our region and across the devolved areas. At the moment, however, the information people are seeking on the design, the priorities, the level of funding available and the governance arrangements simply is not there.
That confusion has left substantial holes in a number of Stormont Departments and left many key third sector partners in the lurch. Northern Ireland’s Department for the Economy has warned that the £100 million gap that it faces in this funding period will mean halving its apprenticeship programmes and a rollback of the skills agenda, which has been a key focus of our party and of many others.
It also means missing a potential opportunity. As Members from all parties will know, we face an almost unprecedented demand for labour. There are opportunities in that regard, but some of the funds were specifically designed to work with individuals and get them over the barriers that they personally faced to take up and retain work.
There are organisations such as Orchardville, a social enterprise and charity in my own constituency, which for four decades has worked with people with autism and learning disabilities, helping them to learn and to earn, and to have the dignity and support of a work environment. At this moment, however, Orchardville faces a substantial black hole.
It is worth saying that the concerns are held not just by those organisations that sought to receive these funds, or by political parties such as my own. Invest NI has been very clear that it believes that the funding would be best delivered in conjunction with the Northern Ireland programme for government and through existing delivery partners. The think-tank Pivotal and a number of other respected commentators and business voices have been raising that point over the past month or two, and the Select Committee on Northern Ireland Affairs has conducted a wide-ranging inquiry into investment priorities in Northern Ireland. Although people see opportunities, concern has been expressed by many of those people about the loss of experience and fidelity that changes to delivery will bring.
Northern Ireland, like other devolved regions, was a net beneficiary in Europe—that is not a secret. I do not think it is anything to be ashamed about either, because the funding allocations were made on the basis of need, and in many cases they were a counterweight to the obvious challenges that Northern Ireland faced in those years, but also to decades of under-investment in areas such as skills and infrastructure. We have had the lowest UK rate of capital investment over many decades and, of course, a stark failure to attract quality foreign direct investment. The founder of our party, John Hume, said many times that the best peace process is a job: the best way to enable people to build and have hope in their futures and, I suppose, to get around the things that have divided them is for them to have meaningful employment—a reason to stay, a reason to get up in the morning and a reason to build.
It is worth also saying that we unashamedly saw an opportunity for Northern Ireland in that political example of common endeavour, with people pooling their needs and abilities in a spirit of co-operation and interdependence, without those people having to change their identity in any way. The French are still French in Europe, and the Germans are still German in Europe. British people in Northern Ireland and Irish people in Northern Ireland could still have an opportunity to co-operate, and the European funds facilitated that over many years. Individuals and the capacity they built, as well as regions and specific industries, are almost unrecognisable after the funding they received.
“Have faith and try new things” is the message we have heard so far from the UK Government, but unfortunately, the experiences people have had so far with the community renewal fund—billed by the Secretary of State for Levelling Up as the forerunner to the SPF— have exacerbated fears. Bids for that fund were invited by the UK Government from a range of local applicants including, but not limited to, universities, voluntary and community sector organisations and umbrella business groups. They were received from a variety of partners, such as Women’s Aid, Mencap, and the Royal National Institute of Blind People. Applications were rejected from groups including Catalyst, which is a well-respected entrepreneurial hub, and Northern Ireland Screen, which is trying to capitalise on the burgeoning film and television sector in Northern Ireland and is creating the kind of exciting jobs that young people in Northern Ireland have never had the opportunity to have—the kind of jobs that allow people to stay and to build a career and a life.
Who was the biggest recipient? It was not any of those groups: it was TieTa, an Oxford-based call centre with no ground game and no operational experience in Northern Ireland, a group that started its life as the customer service arm of a payday lending company. Its funding allocation through the predecessor fund was over twice that of the next biggest recipient, which was Ulster University. Looking at Companies House, three directors of that company are listed: are they from Maghera or the Mournes, or are they from Millisle? No, they are from Monaco; that is the experience that people are having. The fears that many of us have articulated for many years about the loss of EU funds have not been allayed in any way by the rolling out of that fund.
We are in a new paradigm. We are where we are, and our approach has always been to try to make lemonade out of the lemons we have been handed. We want the opportunity to build in Northern Ireland, we want to create real careers and real opportunities for young people, and we want to capitalise on Northern Ireland’s unique dual market access—the first real unique selling point that we have had in many decades of sluggishness and low productivity—but to do that we need local power in local hands. That was a key part of the 1998 agreement. Brexit has not just been a threat in terms of border and identities; that concept of local powers, local decision making and building up trust between local decision makers in mutual endeavour has been crucial to the last 20 years.
The fund should have been an opportunity to realise some of those ambitions. It should have been a way to connect regions—to “level up”, in the common vernacular —and remove barriers to employment. So far, the experience is not good. People need information, and they need some experience that is not handing cash to people registered in Monaco and Oxfordshire.
It is not often that I am called first to speak. Indeed, I am always shocked that it should happen—and very pleased, too; thank you so much, Sir Edward.
I congratulate the hon. Member for Belfast South (Claire Hanna) on her excellent representations for the project that we all wish to see more of—the shared prosperity fund. As she said, we want to see more funds filtering down to our constituencies. She referred to three or four things, including the TieTa group and its three owners from Monaco. I just said to my hon. Friend the Member for Upper Bann (Carla Lockhart), “Who wants to live in Monaco when you can live in Millisle?” That is because Millisle is in my constituency, of course—at least, part of it is.
No, for the record, the Drumfad Road—the Drumfad estate right up to the car park—is in mine. I know it is, because I knock those doors.
I am very pleased to support the hon. Member for Belfast South in bringing the debate forward. There is absolutely no doubt that the shared prosperity fund is needed to build on work that has been done in every region of the United Kingdom through EU funding. Not to be too pedantic, but it is always great to get a percentage of the money that we funnelled into the EU back into our communities. I am very pleased that we have been able to do that.
I share a semblance of the dismay outlined by the hon. Lady, my Northern Ireland colleague—we are from different parties but very much on the same page on this issue—yet I am perhaps a wee bit more optimistic. I suppose I tend to be more optimistic about life—the glass is always half-full rather than half-empty—because there are good things happening. To be fair to the hon. Lady, she outlined the issues but also where we can go with this, and I want to do the same.
When the new Minister of State, the right hon. Member for Bournemouth West (Conor Burns)—it is lovely to see him in his place—was appointed, I quickly asked him to come down to the most beautiful constituency in the whole United Kingdom of Great Britain and Northern Ireland, Strangford. I say to the hon. Member for North Down (Stephen Farry) that that is not in dispute. I was very pleased to bring the Minister down to Strangford. I know that he has a deep interest in Northern Ireland—it has always been in his blood and in his life—so it was good to get him down to Strangford to introduce him to some of the issues on which the shared prosperity fund could make the difference.
I wanted speak to those issues and to give the Minister a taste of the concerns. I spoke to him beforehand and said, “Here are my thoughts; are those things that you would like to do?” and he very quickly said that he would. Issues such as the local high street and how it should feature, and our education system, are key for every one of us. We had a chance to go to Castle Gardens School, and we went to the high street and met the chamber of trade in Newtownards town. There is also our tourism industry; we went to Mount Stewart, and we had a lovely lunch in Harrisons in the constituency. That is one of the tourism projects that has taken off.
In two major areas in which the EU has had control over subsidies in the past, we spoke to the fishermen and, importantly, to the community representatives. The Minister asked for that specifically, and I was very pleased to make that happen. Those are the sorts of things—the changes in the community—that we want. I think I referred to them as the journeys that people have taken away from the past to a new future. Those are the sorts of things that I wish to speak about.
The Minister acknowledged the awful handling of the situation so far for the fishermen. I know that the fishermen in Portavogie were particularly enthralled with the Minister. Sir Edward, if you ever want somebody to imitate our Prime Minister, he is the man who can do it—nobody can do it better. For one minute, if I closed my eyes, I thought it was the Prime Minister. The Minister issued a promise to get it right with his colleagues; he did that for us, and we appreciate that. I got him to meet with the local community representatives from one of the estates in my area, a very progressive community group that is probably one of the best in the Ards area. I did so with a clear view of showing him how far so many have come in our town, and the giant leap forward there has been in the work that they carry out. It is work that it is essential to continue. That is why the shared prosperity fund is so important; it makes a difference and builds a future that we can all wrap our arms around and be part of.
I felt that the Minister took seriously the five areas that I had highlighted. The group he wanted to meet again was the community group, and in particular, its young people. I could see that the Minister was interested. He, like myself and the community group, could see where the future needs to be built. The shared prosperity fund is one way of doing that. We heard how the community wanted to move away from the actions and the reactions of the past. They want to train the new generations in a new way of doing and looking at things. They want to train the new generation to look at things in a way that, some time ago, the community did not, and, if I am perfectly honest, in a way that I did not 40 years ago either. The Minister saw the value of facilitating the local community network through European funding and his response was clear: the work must continue. I subscribe to that. That is what the hon. Member for Belfast South wants. I believe it will continue, but we need a wee bit of help.
We look to the Under-Secretary of State for Levelling Up, Housing and Communities, the hon. Member for Harborough (Neil O’Brien). I know I have been referring to the Minister of State at the Northern Ireland Office—he will forgive me for that, but I wanted to tell the story because it is part of where we are. I look to the Minister for a positive response. That cannot happen without dedicated funding. I have highlighted the areas in my constituency that need help from the fund, including the small businesses that we met on that day; people working in fishing and agriculture, which are still major employers; tourism, which Ards and North Down Council believes is key to building the economy; and our community and educators. Funding for innovation is also essential for large business expansion.
All of that is necessary for a flourishing Northern Ireland—a Northern Ireland for everyone. That is what I want to see, it is what the hon. Member for Belfast South wants to see, and it is what the Minister wants to see. I am sure that everyone else here wants to see the same thing. There is work to be done, and more to do. We have moved forward with a contribution from both sides of the community working together. There is an appetite to do it; there is an appetite from elected representatives, from the Minister and from others here today.
I encourage the Minister to announce the parameters of the fund, to allow every area—not just my constituency, but Belfast South and every constituency in Northern Ireland—the support. We need to help Northern Ireland, and indeed the United Kingdom of Great Britain and Northern Ireland as whole, to live up to our potential. I believe that Northern Ireland has that potential, we just need help through the shared prosperity fund to do that. There is no pressure on the Minister, whatsoever, but will he tell us what he will do for us? We want to take that journey together—all parties and all representatives, along with our Minister and our Government.
It is a pleasure to serve under your chairmanship, Sir Edward. I will begin by thanking the hon. Member for Belfast South (Claire Hanna) for securing this debate and for the welcome opportunity to discuss the shared prosperity fund’s governance and scale, as well as the promises that were made to the devolved nations. Levelling up is an economic necessity, and for decades Plaid Cymru has drawn attention to the chasms that separate our nations in economic development, social opportunity and political attention. That is why, although I applauded the long-term vision contained in the levelling-up White Paper, I am concerned that it lacks the requisite funding and structural reform necessary to realise that vision. Quite simply, we need to get the shared prosperity fund right—a task that has been made even more difficult by a less than auspicious start. The Government dragged their heels in publicising the detail and in implementing the fund itself, and we now know that it also represents a broken manifesto promise, at least as it relates to Wales. On page 15 of the Welsh Conservative manifesto, the party committed
“to ensure that no part of the UK loses out from the withdrawal of EU funding”.
The Welsh Government have recently calculated that the Welsh budget will instead be £1 billion worse off by the year 2024 than if we had continued to receive EU funding through the structural funds. If we look to the EU and its €750 billion covid recovery fund, or to Germany’s historic €2 trillion, or £71 billion annual, investment in east Germany, we have an idea of the scale of the funding that levelling up truly requires.
I urge the Government, in the light of some of those examples, to raise their ambitions when it comes to levelling up—to levelling up levelling up, even—and to perhaps look at committing 1% of GDP over the coming decade, equivalent to some £22 billion annually, to the shared prosperity fund and the task of levelling up the nations and regions of the United Kingdom.
Sadly, in terms of governance, the UK Government are already repeating past mistakes by adopting the same centralised Whitehall model that created many of the regional inequalities in the first place. The shared prosperity fund must be administered by each nation, rather than being disbursed in a fashion that turns nations and regions against each other. Not only is that inefficient but it undermines devolved responsibilities for economic development, a point made by my hon. Friend the Member for Carmarthen East and Dinefwr (Jonathan Edwards).
The shared prosperity fund must be better resourced and must work with rather than over the devolved nations. Anything else would be further proof that Westminster does not work for Wales. It would also call into question whether it works for the persistence of this Union.
It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate the hon. Member for Belfast South (Claire Hanna) on securing this debate. I declare my membership of the all-party parliamentary group on the shared prosperity fund.
Since we heard about the shared prosperity fund way back in 2017, the whole thing has been shrouded in confusion. The Government have been less than forthcoming with clarity and detail. While we now have some more information about the fund, there is still too much uncertainty.
Then there is the top-down, Whitehall-led approach that the Government have insisted on using. Welsh local authorities such as my own in Merthyr Tydfil and Caerphilly County Borough Council, which covers the Upper Rhymney valley part of my constituency, have 20 years’ experience of working together through the Welsh Local Government Association and alongside the Welsh Government to deliver strategic regeneration projects. It is deeply concerning that, instead of a strategic joined-up approach to investment to tackle the urgent issues affecting our communities, we now seem to see a centralised Whitehall-led approach administered by Departments with no real understanding of the needs of Welsh communities. They have limited experience of working with communities in Wales and little understanding of the priorities of those communities. There is also the complete bypassing of devolution.
My hon. Friend is making an excellent speech. I also declare an interest: I chair the APPG on the shared prosperity fund. The pre-launch guidance to the fund simply says that the devolved Administrations
“will be invited to play a role in the development and delivery of local investment plans.”
Does my hon. Friend agree that that is an incredibly vague statement, which could mean absolutely nothing, and that the fund is also part of a broader project being pursued by the UK Government of dismantling the entire project of devolution?
I very much agree. We are seeing an opportunity to bypass devolution, which is a very real threat to what has been built up over the last 20 years. This is not the partnership approach we all could have supported; I fear that it is a real step backwards.
I am deeply concerned, as I know others are, that Wales and areas across the UK are going to lose out as a result of the withdrawal of EU funds, despite the promise that we would not lose a penny. The Chancellor’s Budget for next year shows some £400 million across the UK as opposed to the £1.5 billion that was earlier mentioned. For the purposes of comparison, Wales alone used to receive £375 million. Next year, for the whole of the UK the figure will be barely that.
The lack of clarity from the Government on the amount of funding, how it will be used and the involvement of devolved Administrations has been hugely disappointing from the start, and it saddens me that it shows no sign of improvement. Hopefully, the Minister will give us further clarity and address the points that have been raised for so long.
I want to give a short, quick example to the Minister. Some years ago, prior to entering this place, I was a local councillor heavily involved in regeneration in my local community. A hugely significant regeneration project had £6 million of EU funding allocated to it, but that was just a catalyst. That funding also unlocked funding through the Welsh Government, the private sector, the lottery and other charitable partners, and not least the local community, meaning a significant investment of around £26 million all told. Those projects are still going strong almost 20 years later and are going from strength to strength. I use that example as an illustration because of the nature of the partnership between agencies, not least local government and the Welsh Government. We should learn from such examples.
Finally, what measures is the Minister taking to ensure that we can move forward in a spirit of collaboration involving all partners? As I said previously, any investment is welcome, but it should be in partnership with regional and local government and the Welsh Government, who have had significant experience in these areas. Speaking as somebody who was very much pro-Union, we achieve much more when we work together in partnership for the good of all.
It is a pleasure to serve under your chairmanship, Sir Edward. I thank the hon. Member for Belfast South (Claire Hanna) for securing this important debate today.
My comments largely reflect Northern Ireland, but there will be a large degree of commonality between the situations in Scotland and Wales. I speak as a former Minister for Employment and Learning in Northern Ireland with overall responsibility for the administration of the European social fund. I also have direct knowledge of the application of the European regional development fund as well, so I can testify to the huge value that both of those played in Northern Ireland.
To follow up what the hon. Member for Belfast South indicated, we were told that Brexit was all about taking back control. Well, may I say that when we were members of the European Union, Northern Ireland Departments had more control over that money than we will have in the context of the shared prosperity fund. That is a rather ironic situation, to say the least.
I have numerous concerns to highlight. The first involves governance. To reiterate the point, this cuts across the devolved settlements in all three nations and regions of the UK. In the case of Northern Ireland, it cuts across the Good Friday agreement itself, and that is a fairly serious thing to do. It also creates a real mess in terms of governance itself. In essence, we end up with the UK Government and the Northern Ireland Executive both as players essentially on the same pitch trying to do things in the same areas, whether it is around skills, apprenticeships, labour market inclusion, economic development or economic regeneration. Rather than that being greater than the sum of the parts, I fear this will become lesser than the sum of the parts because there will be built-in inefficiency in terms of what happens.
With all the best intentions in the world around co-ordination and communication, it has been far from perfect up until now. Even if that is remedied, nothing will replace the same teams in the Northern Ireland Departments having overall control over the resources and applying them in the most efficient way. That then begs the question as to what happens in terms of things like the programme for government and measurements of impact. I am not sure whether those have been highlighted by the Department at all.
We are hopeful in Northern Ireland of having an outcomes-based programme for government if and when devolution returns after the Assembly election. In that context, it is important that whatever happens, the Department for Levelling Up, Housing and Communities works hand in hand to the same objectives. If not, again we are going to miss the opportunity to make the best use of the resources.
The same point applies to measurement. How on earth will the Department measure the impact of its interventions on, for example, skill levels, if it is only one part of a wider equation in which Northern Ireland Departments, notably the Department for the Economy and the further education colleges and universities, are all trying to do the same thing? How on earth do we disaggregate all of that? There is then the issue of the scale of the spending. Like Wales, Northern Ireland was told that we would be no worse off under the shared prosperity fund than we were under the structural funds, and yet the Northern Ireland Department of Finance and the wider Executive have made it clear that Northern Ireland risks losing up to £70 million per year of spending power. I would be grateful if the Minister could reconcile those two seemingly contradictory positions.
We then come to the nature of the spending itself. There has been a long-established pattern in terms of the areas where European funding has been put to use. In terms of investment in skills, a large part of apprenticeship funding in Northern Ireland has come through the European social fund, and almost the entirety of areas such as disability employment have been funded through European funding. The ERDF supported a wide range of economic development measures and regeneration issues. Indeed, Invest Northern Ireland, our main inward investment organisation, has depended on that type of funding, and its budget faces a very uncertain future.
Even if those issues are clarified, there are issues around the switchover between the next—and final—round of ESF and the start of the shared prosperity fund. There are a lot of groups working on the margins that are deeply concerned in that regard. There are fears of gaps in the provision of programmes, and of some programmes ceasing altogether. There are concerns about those who are employed. Unlike the civil service, the community and voluntary sector has to put people on notice of redundancy whenever funding comes to an end. There are a lot of people out there who are very worried about their own futures.
Finally, I want to ask why the actions and role of the Department for Levelling Up, Housing and Communities in Northern Ireland will not be covered under section 75 of the Northern Ireland Act 1998. By contrast, both the Northern Ireland Office and Her Majesty’s Revenue and Customs are covered under section 75. The spending that will potentially come through the Department is much greater than that which comes through either of those bodies, so the situation is slightly incongruous. I would be grateful if the Minister could explain the discrepancy.
Thank you, Sir Edward. It is a pleasure to speak in this debate on the shared prosperity fund and the devolved Governments, and I pay tribute to the hon. Member for Belfast South (Claire Hanna) for bringing it forward and for setting out her case so comprehensively.
The Tory manifesto pledged a fair and equal share of funding that would fully replace EU support, which in Scotland would have been around £183 million per year. However, the Treasury Committee has already indicated, in a report published at the end of January, that the UK shared prosperity fund up to 2024-25 will be worth 40% less than EU support. In addition, all the power over the delivery of the funding is concentrated in Whitehall. There is no doubt that devolved Governments have been ignored. The Scottish Government as yet have no details of how much funding will be allocated to Scotland, nor has there been any consultation with Scottish Ministers, who have had no role in investment proposals or decisions in areas that are devolved to the Scottish Parliament.
The UK shared prosperity fund will replace the EU structural funds from next month, and still there has been no meaningful engagement with Scottish Ministers, or indeed those of other devolved nations. In January, the House of Lords Constitution Committee concluded that the UK Government continued to ignore devolution and the devolved Governments’ calls for greater transparency on decisions being taken with regard to levelling-up funding. With the publication of the shared prosperity fund pre-launch guidance this month, the role of devolved Governments and Parliaments is still completely unclear. The UK Government have chosen to work directly with local authorities, as presented in the guidance, and there is no evidence that they respect devolution or consider the Scottish Government, for example, an equal partner. Because the UK Government have also failed to offer any indication of Scotland’s shared prosperity fund allocation, or indeed how levelling up will align with the priorities of the Scottish Government, there is no overarching strategic thinking or planning in accordance with the Scottish Government’s priorities.
It is simply not respectful for the UK Government to seek the Scottish Government’s help in implementing projects after they have been selected by the UK Government. The Scottish Government, and all the devolved Governments, should be consulted at all stages, as was the case with EU funding. What possible objection could there be to that, unless the purpose is to undermine devolution? Although I appreciate that the Minister will tell us of the great munificence of the UK Government, it is also important to remember that in his last Budget, the Chancellor announced several direct funding programmes in Scotland through the levelling-up funding, totalling £172 million in spending. However, the rolling out of the levelling-up fund to communities around the UK short-changed the Scottish Government of expected Barnett consequentials, leaving a £400 million hole in the budget.
Delays to the delivery of post-Brexit funding—a year into Brexit—have already robbed poorer areas of £1.5 billion in funding, with the shared prosperity fund not set to deliver until April. When it is delivered, it will fall far short of previous EU funding. The reality is that Scotland will receive 3.5% of all levelling-up funding, despite having 8.2% of the UK’s population. Perhaps the Minister could explain that. The reality is that the Secretary of State for Levelling Up and the Prime Minister led a Brexit campaign promising £1.5 billion a year for Scottish devolved services when the UK left the EU. Instead, all we have heard is an announcement of £172 million. To put that into context, Scotland has received 11p for every £1 promised. In effect, Scotland has been short-changed by 89% of what was promised. I know the Minister will dispute this, but there is a growing consensus that the devolved Governments have been short-changed. The Treasury Committee says so, the House of Lords Constitution Committee says so, the Scottish Government say so, and the Unionist Welsh Government say so. They all agree that this is the case.
I want to raise the issue of Interreg with my hon. Friend, because the shared prosperity fund is touted as a replacement for EU structural funds, but the levelling-up White Paper makes no mention of Interreg. Interreg was very important to organisations such as the European Marine Energy Centre in Orkney, which works in collaboration with other partners and gets a lot of funding on the back of that in order to tackle really important common challenges in meeting our targets for net zero. Is my hon. Friend aware of that, and does she agree that it is essential that the funding is replaced?
My hon. Friend makes an excellent point. The fact is that a number of organisations, including the European Marine Energy Centre, are very concerned about funding going forward, given the cuts to funding that I and many other speakers in the debate have talked about today.
Scotland has been short-changed and her Parliament undermined. I know the Minister thinks Scotland should be grateful, but the post-Brexit funding bonanza has not materialised and as a result important projects across Scotland and the devolved nations have been jeopardised. Scotland is the poorer for Brexit in so many ways. I hope the Minister will at least recognise the loss of funding that Scotland and the other devolved nations have suffered as a result and all the other concerns that he has heard about today. I really hope that when he gets to his feet, he will make a genuine attempt to address those concerns.
It is a pleasure to serve once again under your chairmanship, Sir Edward, and to contribute to the debate. My sincere thanks go to the hon. Member for Belfast South (Claire Hanna) for securing today’s very important debate.
We have heard some excellent contributions from hon. Members of different parties who represent communities across our devolved nations. The hon. Member for Belfast South spoke about local charities needing security and sustainability in order to continue with their excellent work in her community in Northern Ireland. She referred to the programme as “learn and earn”, and I certainly wish such programmes well in the future.
The hon. Member for Strangford (Jim Shannon) made a very powerful contribution and spoke eloquently about the need to have not a penny less, in order to shape a bright future for all the communities in Northern Ireland. My hon. Friend the Member for Merthyr Tydfil and Rhymney (Gerald Jones) referred to the Westminster-centric approach of levelling up and the shared prosperity fund, and to the need to work in partnership with the Government in Wales and with local government so they can shape their own destiny. The hon. Member for North Down (Stephen Farry) correctly derided the notion of taking control. If we look at levelling up and the shared prosperity fund, the reality on the ground is anything but that of taking control.
Even though the Government have touted the shared prosperity fund as a central pillar of their levelling-up agenda, serious questions remain. The Minister will no doubt ask us to wait until the formal launch, when all questions will be answered. However, important questions need to be answered now, as eloquently argued by the hon. Member for Belfast South. Fundamentally, we cannot escape the fact that this funding is worth only 60% of the EU funds it is replacing. How do the Government reconcile cutting 40%, which is a considerable share of the fund, and claiming to level up at the same time?
The Government are trying to hide behind rhetoric that tells the public that they are investing in them and in communities that the Government have left behind for close to 12 years, when they are doing the exact opposite, on top of a clear breaking of important manifesto pledges, as stated across the Chamber today. The Government said they would match funding to devolved nations, but clearly that is not the case. The evidence is there to see. Concerns have also been raised that the chosen delivery geographies—essentially, lower tier and unitary authorities—will result in inefficient procurement and fragmented and duplicated services. Indeed, some Members have argued powerfully that, in some cases, devolved Governments have been ignored completely.
We have heard concerns from Members representing all the devolved nations here today. As the Institute of Government has stated, the shared prosperity fund
“risks damaging trust between the UK and devolved administrations and undermining the UK government’s key objective of binding the four nations of the UK closer together.”
As we have heard today, the “Westminster knows best” diktat is an affront to the very principle of devolution, while giving the Chancellor the reins to oversee funding cuts.
As my hon. Friend the Member for Aberavon (Stephen Kinnock) eloquently and powerfully argued, this overly centralised scheme, devised by Ministers in Westminster, has not seen proper engagement with devolved nations and other stakeholders during the development of the plans for the UK shared prosperity fund. I am sure the Minister will, again, ask us all to wait for the full prospectus to be published. Given the scant involvement of the devolved nations that has been permitted so far, and the scant detail provided so far, he can hardly be surprised that he has been asked to attend this important debate today.
Finally, as mentioned by the hon. Member for Belfast South, can the Minister discuss the funding gap between the end of the current funding and the beginning of the shared prosperity funding, which puts community projects at risk before the shared prosperity fund even pays out a penny? With European funding provision ending in some areas as early as April, there is a real funding gap and it is causing anxieties and insecurities in our communities. Can the Minister respond to that important question?
Our collective vision should be a programme that genuinely powers up people, places and nations. It should have a focus on need. It should have fairness in its DNA and put devolved nations in the driving seat, as leaders in their localities, with not a penny or a power taken away. I look forward to the Minister’s response.
It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate the hon. Member for Belfast South (Claire Hanna) on securing this important and timely debate. It was also good to welcome the Minister of State for the Northern Ireland Office, my right hon. Friend the Member for Bournemouth West (Conor Burns), who was listening to all the extremely important points being made as closely as I was.
Given the short time available, I will come directly to the important points made by hon. Members. I am not here to argue the toss with them, but to try to start to set out how we will work together to do all these things. As hon. Members know, the shared prosperity fund will provide £2.6 billion of new funding for local investment by March 2025; it is a significant scheme. It will be provided through a funding formula, rather than a competition, which is important. While there are advantages in funding competitions, because they get people sharpening their pencils, there are a lot of advantages in formula allocations, because people have the same certainty that places used to have through some of the European structural funds.
On the point about funding, the Minister has just mentioned the figure of £2.6 billion. Does he therefore accept that the manifesto commitment has been broken? The manifesto commitment was to match the previous funding, which would mean £1.5 billion per year over a seven-year planning cycle. The comprehensive spending review is only a three-year time horizon, so will the Minister accept that the manifesto pledge has been broken?
I will come to quantums later in my speech, but no, we will keep our manifesto promises.
The hon. Member for Belfast South raised really important points, and I hope I can start to set Members’ minds at ease. The hon. Member for Strangford (Jim Shannon), whose health I would have feared for had he not been here today, was right when he said that we are all on this journey together.
I agreed with the hon. Member for Ceredigion (Ben Lake) when he said that we must work with devolved Governments and local people, not over their heads. I also agreed with the sensible speech made by hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones), who said that we must use the experience of local partners who know what is needed and how to run these kinds of schemes.
In Scotland, Wales and Northern Ireland we are very clear that we want local partners, at all levels, to be able to shape what is done to this funding and how it is allocated. In Northern Ireland, we have a unique local government landscape in our work on the UKSPF, so we proposed to deliver at a Northern Ireland-wide scale, which will enable us to have an allocation that is felt to be fair by all communities and that will make the most of all the fantastic opportunities that there are across Northern Ireland.
The development of that single Northern Ireland plan will draw on the insight and expertise of local partners, including the Northern Ireland Executive, local authorities, businesses, the community and the voluntary sector, in order to maximise all the local intelligence, insight and knowledge that they have. We have engaged with the Northern Ireland civil service, the Northern Ireland Local Government Association and Solace on UKSPF.
I have also reached out to the Northern Ireland Executive’s Minister for Finance and I plan to discuss the UKSPF further with him on Thursday. I had a very useful meeting with Minister Lochhead from the Scottish Government on Friday, and I am setting up a meeting with Vaughan Gething of the Welsh Government, as well. We are keen to work with all of the devolved Administrations to shape the way this funding is used.
When the Secretary of State for Levelling Up, Housing and Communities delivered his statement on the levelling-up White Paper, he acknowledged to me that the First Minister was advised of an innovation accelerator that was being put into Glasgow in a phone call only the night before. Can the Minister guarantee that that sort of behaviour will not continue in the future?
I think that innovation accelerator is terribly exciting, but I can guarantee to the hon. Lady that as part of UKSPF we are engaging at all levels with devolved Governments and other local partners with important expertise. We will also be setting up an inter-ministerial group, with ministerial representation from all the devolved Governments, so that we have a regular forum on the breadth of my Department’s work to discuss these matters and to ensure there is an open dialogue across the whole UK.
The UKSPF has been designed to empower local places in all four nations of the UK. My Department is engaging with local government associations—including the Local Government Association, the Convention of Scottish Local Authorities, the Northern Ireland Local Government Association and the Welsh Local Government Association—ahead of and following the publication of the pre-launch guidance.
We will continue to engage with the devolved Governments and wider partners on the design and operation of the fund so that we can get the best outcomes across all the UK, because there are so many different priorities. The hon. Member for Strangford talked about fishing communities, and we heard from the hon. Member for North Down (Stephen Farry) about important community groups. There are many different partners that we have to engage in shaping this important programme.
We are engaging with the Northern Ireland Executive at an official level regarding the concerns they raised about programmes that are currently running under the European social fund. That dialogue will help to push on arrangements that maximise that fund delivery in Northern Ireland. However, it is worth thinking about the totality of these different funds because, as well as the shared prosperity fund, we also have the levelling-up fund and the community renewal fund, which is a one-year fund to transition us on to the UKSPF.
For Northern Ireland alone, if we look at some of those different sources of funding, my Department has provided £49 million via the levelling-up fund, £12 million as part of the community renewal fund, and funding through the community ownership fund, which enables different community groups to take things into community ownership. At the same time, we have made important long-term commitments in Northern Ireland, as in Scotland and Wales, through the city and growth deals. In Northern Ireland, those are worth £670 million—funding that is being matched by the Northern Ireland Executive. That is in addition to Northern Ireland-specific schemes, such as Peace Plus.
One of the challenges on my mind, as a Minister, is how we can all work together to ensure that the schemes work in such a way that they are more than the sum of their parts. I am conscious that there are a number of different schemes there; how do we ensure that the totality of the opportunities in Northern Ireland, which are very exciting, are best served by the confluence of all these different funding streams? It is useful, through t UKSPF, to have some funding that is not challenge-based but formula-based, and therefore, in that sense, a bit more flexible to provide bits of match funding to complement those other, existing funding streams.
The Minister mentioned the importance of his Government working in partnership with the devolved Governments. I am sure we are all pleased to hear that. Would he therefore like to comment on the conclusion of the House of Lords Constitution Committee in its report in January that the UK Government have ignored—and continue to ignore—devolution and the devolved Governments in this process?
There will always be a range of views on these questions. As my Secretary of State set out in his evidence to the Scottish Parliament the other day, our strong belief is that all these things will work best if we can engage not just the devolved Governments but local partners across the whole the UK.
It is worth putting these issues in the context of the wider funding settlement, as well as the funds that are specific for regeneration and community renewal. In the spending review, hon. Members will have seen that we have £15 billion for Northern Ireland annually for the next three years—the highest figure since devolution. There will be £41 billion for Scotland—again, the highest figure since devolution—and £18 billion for Wales, which is, again, the largest figure, in real terms, since devolution. So the context is that of a wider public spending settlement, and although we would always like to have more money to do things, that will enable us to do some really important things for some communities, particularly in Northern Ireland, which experienced extremely high levels of deprivation—I think that we would all recognise that.
Hon. Members have raised some of the things that the community renewal fund is doing. I would stress some of the positive things that that funding is doing, which leads into the work of the shared prosperity fund. The hon. Member for Belfast South rightly quoted the wise comment of her former leader that the best peace process is a job.
The hon. Member for North Down stressed the importance of skills—again, quite rightly. The community renewal fund is giving half a million pounds to the NOW Group to support people with disabilities through specialised employment academies and job mentoring. It is also giving nearly half a million pounds to South West College, Southern Regional College and Queen’s University Belfast to upskill construction operatives to fill that skills gap, and there will be just over £500,000 for a hydrogen training academy to deliver training for 180 people, to get a skilled workforce that can take advantage of the exciting opportunities that are opening up in Northern Ireland in hydrogen and clean technology. Those funds are doing a great deal of good. By working together, we will get the most out of these different spending streams.
The hon. Member for North Down asked a specific and very important question about section 75. We understand the importance of respecting the unique equalities considerations in Northern Ireland. We recognise the importance of not only meeting our legal obligations under the Equality Act 2010 but giving due regard to the additional equalities considerations that apply in Northern Ireland. I hope it is obvious from the tenor of my comments and from what I have said today that we are always—always—keen to have solutions that are felt to be fair by all communities and that see all communities working together.
I thank hon. Members, who have put forward genuinely important points in today’s debate. Over the coming weeks, we will work with other parts of the Government—represented here today—as well as partners across the UK, to finalise our policy development. Later in the spring, we intend to publish the full UK shared prosperity fund prospectus.
I hope I have got across in my comments the sense that our intent is not to go over the heads of anybody but to enable devolved Governments, local government and other partners to shape what is done in different parts of the UK and where the money goes, and to be involved in generating and contributing ideas at all levels, so that we can make the most of the opportunities that we collectively share. That is the tenor of where we are coming from on this entire agenda.
Once we have done that—we will be doing it, as Members can probably tell from the meetings I have talked about that are under way or that are forthcoming— we will publish the full UK shared prosperity fund prospectus. We want to try to keep the process as simple as we can so that we can give local partners the information they need to begin investment planning. I genuinely look forward to working with hon. Members from across this House; a number of them have already come to me with important suggestions and ideas about things we can do on this agenda. I look forward to working with all Members who are here today to deliver on our shared ambition.
I thank Members for their participation and for their points. My constituency near-neighbour, the hon. Member for Strangford (Jim Shannon)—I concede it is a very beautiful place—set a very helpful and constructive tone, but Members across the House have reflected a concern or two. Colleagues coming from different political perspectives in Wales were certainly on the same page about the risks to devolution and the anxiety that the gaps in information have created.
The hon. Member for North Down (Stephen Farry) asked some key questions, based on his experience as a skills and employment Minister with a lot of first-hand experience of driving and directing the predecessor funds. He asked some important questions about equality impact assessments, particularly in relation to Northern Ireland.
The hon. Member for North Ayrshire and Arran (Patricia Gibson) gave a comprehensive and convincing summary of Scotland’s concerns and presented some very stark figures that I, too, would have liked to hear the Minister’s response to and that I completely understand will have breached the faith and confidence of people in Scotland.
The hon. Member for Weaver Vale (Mike Amesbury) and the hon. Member for Aberavon (Stephen Kinnock), who is the chair of the all-party parliamentary group, reflected the concerns about a Whitehall-led, top-down approach. I was made aware that at a 2019 Conservative leadership hustings in Cardiff, the now Prime Minister pledged a strong Conservative influence over these funds, but people in Northern Ireland, Scotland, Wales and many other parts of the UK have expressed different aspirations and have different needs, which must be respected and protected.
Delivery partners with decades of experience, as well as ideas and track records, are clearly ready across the different regions to play a part, to build the economy and to ensure that everybody has the skills and the capacity to access the economy. However, there needs to be a joined-up approach. The Minister referred to the city deals, which work precisely because they work from the bottom up, catalysing private investment and doing so by having direct partnerships with local business and research partnerships.
As I say, seeing is believing. I gave the example that in Northern Ireland a vacuum of information was followed by an alarming allocation that raised even the most benign eyebrows in Northern Ireland. So I appreciate the tone of the Minister’s response about how people will be engaged, but I have to say that, in the absence of further information on the parameters of the fund and how it will engage with devolved Administrations, we remain to be convinced.
Question put and agreed to.
That this House has considered the shared prosperity fund and the devolved Administrations.