House of Commons
Tuesday 20 December 2022
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
The Chancellor of the Exchequer was asked—
Core Northern Powerhouse Rail: Public Funding
May I begin, Mr Speaker, by wishing you and all of your brilliant House of Commons staff a very merry Christmas?
The integrated rail plan, published last November, set out an estimate of £17.2 billion at 2019 prices for the core Northern Powerhouse Rail network, with a further £5.4 billion for the TransPennine route upgrade. That includes building 40 miles of new, high-speed line between Warrington, Manchester and Yorkshire, as well as upgrading and electrifying the rest of the route between Liverpool and York, and the existing line between Leeds and Bradford.
I am grateful to the Minister for that response. The Chancellor has rightly spoken about the importance of capital investment to the long-term growth of the economy but, at the same time, he has downgraded the £40 billion vision of Northern Powerhouse Rail, which was agreed on a cross-party basis with northern leaders, to the much-reduced £17 billion core scheme. Decisions on Northern Powerhouse Rail will shape the future of the railways in the north of England for generations to come and unlock massive economic benefits. Will the Minister look at refocusing Treasury appraisal of NPR on its long-term transformative benefits and whole-life value, rather than on short-term factors? Otherwise, a massive opportunity, not just for the north, but for the whole of the country, will be missed.
I commend the hon. Gentleman, who speaks with great passion on these issues. He is right that the Chancellor is absolutely committed to the long-term benefit to the economy of capital investment and infrastructure schemes like these. Just to be clear, the IRP set out the Government’s view that the core NPR network is the most effective way to deliver rail connectivity benefiting the north. Our plans would deliver substantial journey-time saving and capacity benefits all the way from Liverpool to York. It will do so far more quickly and cost-effectively than alternatives.
Energy Producer Profit Trends
The structure of the electricity market means that the price of electricity is tied to the wholesale gas price. Russia’s invasion of Ukraine triggered an unprecedented increase in gas prices, driving energy prices to eight times their historic levels. As a result, many energy generators’ profits are well above pre-crisis levels. As announced at the autumn statement, the Government are introducing a temporary 45% tax on extraordinary returns made by some UK electricity generators from 1 January.
Thank you, Mr Speaker.
Shell announced worldwide profits of £8.2 billion and £9 billion for the three-month period between July and September and the three months to June. BP announced more than double its profits for the same period. They have increased their dividend payments and spent billions buying back their own shares from the market. Shell says that it does not expect to pay any windfall tax at all this year and BP said that it would pay £678 million. Does the Minister agree that, if the Government had implemented a proper windfall tax that captured these things, we could be supporting offshore customers such as my own in North East Fife?
Obviously, the hon. Lady knows that we do not comment on the commercial decisions of individual companies. What I can confirm is that the specific levy to which she refers—the energy profits levy—will contribute £40 billion to the Exchequer. We must remember that that £40 billion will play a key part in enabling us to afford the support that we are giving to constituents throughout the United Kingdom this winter and next year, which will total, for businesses and households, more than £100 billion, and the Office for Budget Responsibility has already found that that will help to reduce inflation overall.
May I begin, Mr Speaker, by wishing you, the Minister and the whole House a jolly Christmas?
If the Government had implemented Labour’s windfall tax, they would have raised an additional £16.8 billion. Why have the Government chosen to leave this windfall of war on the table and not put it to use to support families and businesses in the tough winter ahead?
I do not entirely accept that. I would be interested to know the detail behind that figure. What we can confirm is that we have two specific levies: one on oil and gas, and one on certain electricity generators. We think that these are being applied in a very fair way. The levy to which the hon. Member refers does include an allowance for investment but this is the point. That level of support cannot continue for ever. The long-term answer is energy security—investment in new energy sources and, indeed, investment in the North sea, supporting UK jobs and the transition to net zero.
Financial Conduct Authority: Loyalty Penalties in Insurance Market.
The Government welcome the Financial Conduct Authority’s pricing rules, introduced in January this year, which require insurers to offer a renewal price no greater than the price the firm would offer to a new customer for the same policy. The Financial Conduct Authority has confirmed there is no evidence of widespread non-compliance with those rules.
The FCA’s cheap and, we hope, effective measures to stop insurance company customers being ripped off is in stark contrast to the energy price cap, which was introduced for exactly the same reason, but has not held down the price of energy and has larded hundreds of pounds of extra hedging costs on to every household’s energy bills to boot. Since the Treasury is spending vast amounts of taxpayers’ cash on energy subsidies at the moment, will my right hon. Friend speak to the Secretary of State for Business, Energy and Industrial Strategy about replacing the failed energy cap with a version of the FCA’s much cheaper and more effective approach as soon as energy prices return to normal?
I am very happy to look at that question further. The Government previously considered, but rejected, asking Ofgem to implement a relative rather than an absolute price cap in energy markets, which would have similarly prevented energy suppliers from charging those large differentials, because it was judged that it was more likely to distort competition in the fixed-term tariff market. As ever, I am happy to continue the conversation with my hon. Friend and I know he will take the matter up further with the regulator.
Subsequent to the changes to the insurance market to protect people from the loyalty payment, the Chancellor announced his Edinburgh reforms to wider financial services regulation and a great many consultations. At a quick glance, many of them closed very quickly—on 5 February, 17 February, 3 March, 5 March and 17 March. Given that the Treasury Select Committee warned over a decade ago that the Government
“needs to take the time required to get its reform of financial regulation right”,
how can we be convinced that the rather painful lessons of the financial crash have not been forgotten?
For four and a half years, I was the Economic Secretary to the Treasury, and many of those reforms were baked up over a lot of consultation with industry over many months. The Edinburgh reforms represent an incremental advance on those reforms and have high prudential regulatory standards very much at their core.
I will come to that, because the Minister is absolutely right. I did quote from a 2010 report. But in June this year, the Treasury Committee, in its report on the future of financial services regulation, warned:
“Weakening standards could reduce the financial resilience of the UK’s financial system and undermine international confidence in that system and the firms within it.”
Given the intention to review capital requirements, and the new remit letters and secondary objectives for the Prudential Regulation Authority and the FCA, how will the Chancellor and the Minister ensure the regulatory focus on stability is maintained?
I gave evidence to that inquiry and I heartily agree with its conclusions. Stability is at the core of the regulators’ objectives, but so is the need to look at the competitive landscape across the globe and ensure that the UK, with the city of London as a global hub for financial services, evolves and remains competitive, taking account of the risks but also developing frameworks in line with expectations, so that we can remain that world-leading global hub.
Poverty Levels in Scotland
The Chancellor published the “Impact on households” document alongside the autumn statement 2022, containing analysis of how policy announcements affect household incomes. The results show that the autumn statement decisions on tax, welfare and changes to the energy price guarantee in 2023-24 benefit low-income households across the UK, including Scottish households, the most. The autumn statement announced further support targeted at 8 million of the most vulnerable households across the UK, who will benefit from additional cost of living payments in 2023-24.
The Joseph Rowntree Foundation found that, by October this year, one in five households in Scotland had already had to go without food or without heat because they could not afford both—and that was before the recent severe cold snap. The JRF also described the Scottish child payment, introduced by an SNP Government, as
“a watershed moment in tackling poverty”.
Does the Minister have any plans to speak to the Scottish Government to find out how the Scottish child payment works so it can be introduced here? Who knows—they might give him some tips on how to avoid a nurse’s strike at the same time.
I am, as ever, grateful to the hon. Gentleman for his advice. Of course, we engage closely with the Scottish Government. The latest official statistics from the Department for Work and Pensions, based on data up to 2019-20, show that, compared with 2009-10, there were 55,000 fewer people in absolute poverty after housing costs in Scotland. But I think the key point is that we are supporting everyone in every single part of the UK with their energy bills this winter. It is a challenging time, but our extraordinary help is making a real difference.
Levelling Up Communities: Fiscal Steps
The Treasury is making significant investments to level up communities across the UK—101 towns, including Dewsbury, will benefit from more than £3.2 billion from the towns fund, supporting long-term economic and social regeneration. Of course, communities will also benefit from the £4.8 billion levelling-up fund, the £2.6 billion shared prosperity fund and the £250 million community ownership fund.
The decision on the £47 million Penistone line levelling-up fund bid is due to be announced shortly. Can my right hon. Friend assure me that this important round 2 category 1 bid will be subject to the same financial considerations and eligibility as bids submitted in round 1?
I can absolutely reassure my hon. Friend that all round 2 bids are undergoing a robust and thorough assessment through that decision-making process. That is consistent with the approach taken in round 1. Of course, the individual decisions will be made in due course in the very near future.
One way the Government could level up low-income families with young children is through healthy start vouchers. This year, I have tabled four written questions asking what the take-up rate of that scheme has been since digitisation in April, but the Government have been unable to give me an answer, despite the fact that we are eight months on and in the middle of a cost of living crisis. How do the Government know what the take-up rate of the scheme is and whether it is working in balancing out inequalities?
I obviously cannot answer that specifically, but I can say that the Government have, over recent weeks, shown the commitment to helping the most vulnerable across the United Kingdom. But I take the hon. Lady’s question seriously, and I am very happy to look into that and to work with colleagues across Government to find an answer.
As the Minister will know, fiscal steps in investment zones can help to boost and level up communities—I am thinking in particular of Paignton in South Devon, where South Devon College and the photonics industry exist side by side. Will he meet me to discuss how that initiative could help to support growth in Paignton?
I am very happy to meet my hon. Friend, who is, as ever, fighting strongly for his constituents. As he knows, the investment zones are designed to be a meaningful mechanism to catalyse growth, sometimes, although not exclusively, through university, looking at where we can find clusters across the United Kingdom to drive the economy forward.
Clearly, we need to level up on housing. In my constituency, many people just cannot afford a private rented home or to own their own home, and we need more social housing, but that is not possible without Government subsidy. What is the Treasury considering to make sure that people who desperately need a permanent roof over their head can get it?
We are working very closely with the Department for Levelling Up, Housing and Communities to look at specific interventions. We have just released an extra amount of capital money to work alongside the Ukraine support scheme. But I totally recognise that this is a critical issue, and we will make further announcements about it in due course at the next fiscal event.
I fully support my hon. Friend the Member for Dewsbury (Mark Eastwood) in his levelling-up bid for the Penistone line, as it goes through my constituency, with stations in Brockholes and Honley. I also have my own levelling-up bid to regenerate a disused mill in Marsden for commercial space. These bids are good not only for connectivity and regeneration, but for the economy, because they create jobs and growth. Does the Minister agree that this allocation of funding therefore makes sense?
I absolutely agree with my hon. Friend—perhaps unsurprisingly. The Government have developed a bespoke and objective index of priority places. We are very keen for this investment to work effectively, wherever it is. I very much respect the representations he has made this morning for the bid in his own constituency.
An important part of levelling-up communities is to invest in the community transport network. Last week, I visited Shettleston-based Community Transport Glasgow alongside Councillor Laura Doherty. They were telling me that they were having real difficulty attracting volunteers because of HMRC rules around mileage rates. Is that something that the Government are willing to look at? Will the Minister be willing to meet me and Community Transport Glasgow to discuss that issue?
Public Spending: Value for Money
Value for money is a central priority for the Government and at the heart of every decision we take. The Government take our responsibility for managing the public purse seriously. The Government recently launched the efficiency and savings review, and that will help to keep spending focused on the Government’s priorities and manage pressures from higher inflation. It will include renewing our efforts to drive efficiency, tackle waste and re-prioritise spending away from lower value and lower priority programmes.
I hear what the Minister has just said, but he will be as aware as I am that, in the 2020-21 annual report from the Department of Health and Social Care, the Government wrote off a total of £8.7 billion-worth of the personal protective equipment they had acquired in the first year of the pandemic. When families are facing a choice between heating and eating this Christmas, does the Minister understand the real public anger that people are facing these difficulties at this time, when the Government are having such rampant waste of public money?
I acknowledge that figure in that report, but it refers to the write-down that was necessary following a situation where we acquired a lot of PPE at a time of acute demand and shortage of supply. It was an adjustment for that. Of course, 97% of all PPE was suitable for use in healthcare and non-healthcare settings. While I take the general point that the hon. Lady is making about concern for the most vulnerable in communities, which has been addressed by the £37 billion of support we have put in this year, those are the facts around the figure that she raises.
Figures suggest that at least £3 billion has been spent on agency staff in the civil service over the past three years, plugging the gaps in our public sector at a huge premium to employment agencies. With Public and Commercial Services Union members in the civil service now out on strike for fair pay and terms and conditions, and thousands of contingency staff already drafted in to break the strikes, can the Minister say how much this dispute is costing the taxpayer? Does he agree that it is a false economy not to give these dedicated public servants a decent cost of living pay rise?
Strikes are obviously very regrettable, and we as Ministers work closely with civil servants day in, day out, and we very much value the contribution they make to government. I will be looking carefully with Secretaries of State in the coming weeks at efficiencies across government and how we can get the economy, the country and public finances in the best possible place as we move forward through the pay review round next year.
Are the Government not just paying lip service to the need to get improved productivity in public services? For example, the NHS produced an internal report in April on its efficiency, or lack of productivity. I requested that that report be made available in the Library more than one month ago, and I have not even had a reply to the question. Why are the Government not more open with Members about the need for productivity improvements?
I can be very open with my hon. Friend today. We are absolutely committed to driving forward productivity across the economy and in the public sector. I will look into the specific question he has not had answered. That will involve conversations with the Secretary of State for Health and Social Care, as well as across the Cabinet.
I echo the good wishes to you, Mr Speaker, to the Minister and to the whole House for a very happy Christmas.
Last year, the then Prime Minister and the then Chancellor, who is now the Prime Minister, announced a star chamber to crack down on waste and fraud in public expenditure. How often has the star chamber met, and how much of the £6.7 billion estimated to have been lost to covid fraud and error has been recovered?
As the right hon. Gentleman knows, we have instituted a range of interventions, investing in His Majesty’s Revenue and Customs fraud prevention measures to embed those in business as usual. I have been in post for the past eight weeks, and I will be having a series of meetings in January.
The Minister could not tell us whether the star chamber has met at all.
On top of all the examples that have been cited today, the rescue of the energy company Bulb is estimated by the Office for Budget Responsibility to be costing another £6.5 billion, partly as a result of our hedge fund Prime Minister’s failure to hedge against rising energy prices. Why do the Government not show more respect for public money and chase down every penny of these losses before putting up taxes for 30 million people at a time when the public already face the biggest cost of living crisis for generations?
I agree with the right hon. Gentleman about the imperative of chasing down all waste. The Government are providing continued funding for the Bulb Energy special administration regime while the sale of Bulb’s customers to Octopus is pursued by the energy administrator as an exit route from the SAR, but I will look at what the right hon. Gentleman said and reflect carefully on what we can do further.
Inflation: Student Maintenance Loan Increases
Treasury Ministers meet regularly with Ministers at the Department for Education to discuss matters of shared interest, including student finance. The Government are considering options for changes to loans and grants for 2023-24, and an announcement will follow in due course.
The Institute for Fiscal Studies reports that the real value of maintenance loans is the lowest for seven years. Rents, which account for 45% of bills, are rising; food costs are rising; one in 10 students are using a food bank; and 80% say they cannot make ends meet. Why does the Minister not make his Christmas present a proper increase in the level of maintenance loans? Because it is a loan, he would not even have to pay for it.
I thank the hon. Gentleman for his question. I have a lot of respect for him and I recognise the issue that he refers to. Of course, many higher education providers have hardship funds that students can apply to, and there is £261 million—a quarter of a billion pounds—of student premium funding available this year to support disadvantaged students. On the specific issue of the uprating, of course there needs to be a delay to operationalise those additional sums. That is at the core of the issue. However, as I said, the Department for Education will report on the matter in due course.
Tax System: Fairness
Merry Christmas to you, Mr Speaker, to all the House staff, to the Members in the Chamber, and to our parliamentary staff, who do such a good job for us all year round—[Interruption.] And to the Doorkeepers—thank you very much.
It is right that everyone contributes to sustainable public finances in a fair way. The autumn statement tax reforms mean that those with the broadest shoulders contribute the most. We are also implementing the OECD pillar two reforms so that multinational corporations pay their fair share of tax, and we are introducing measures to address tax avoidance and evasion to ensure that people pay the right amount at the right time.
I do hope that the hon. Gentleman noted the announcements by my right hon. Friend the Chancellor in the autumn statement in relation to dividends and corporation tax allowances. We want to ensure, where we can, that unearned income is roughly comparable to earned income. That is precisely why the principle running through the autumn statement was that those with the broadest shoulders should bear the greatest burden.
I welcome the Edinburgh reforms, which help to make our financial services sector more competitive. I urge my hon. Friend to adopt the same approach to R&D tax reliefs and capital allowances, so that our world-class entrepreneurs, start-ups and small and medium-sized enterprises can benefit from the same advantages.
We all have campaigns to which we devote a great deal of time and for which we build a reputation. My hon. Friend has had a reputation for campaigning on and highlighting the fourth industrial revolution since he was elected in 2015, so I am not surprised that he asked that question. I am delighted to say that we very much support innovation and the critical work of our entrepreneurs, start-ups and SMEs, which is why we are setting the annual investment allowance permanently at £1 million from 1 April, and reviewing the research and development tax reliefs to ensure that, while we are rebalancing the rates of relief out of fairness to the taxpayer, we are also targeting that relief at the knowledge-intensive and innovation-intensive businesses that we all care so much about.
For a bit of Christmas cheer, I agree with the Minister for once as she says that she wants those with the broadest shoulders to pay the most in the tax system. Why, then, did the Chancellor pick the pockets of hard-working people in the autumn statement through stealth taxes, such as freezing tax allowances, rather than tackling non-doms, which could have brought in £3.2 billion to the Exchequer?
I feel a little slighted, because the hon. Gentleman and I agree on an awful lot behind the scenes—I wish him a very merry Christmas. On non-doms, we know that they paid £7.9 billion in UK taxes last year, which is a significant sum of money. The Chancellor has been clear that when we look at those rules, we have to bear in mind that they pay a significant sum of money in their UK taxes that obviously contributes towards the public services that we all care so much about.
The success of our fantastic town deal in Redditch, which is thanks to record-breaking investment from the Government, relies on our amazing SMEs, who tell me that they need to compete against the online giants. What more can the Minister do to ensure that our businesses play a full part in our vision for the future, so that we can continue to unlock Redditch?
My hon. Friend has done so much for her constituency through her campaigns, including by securing the investment that her local hospital needs. In relation to her high streets and small businesses, she is right that we are the Government of small business. That is why, although we had to make some difficult decisions in the autumn statement, we were determined to protect our precious high streets and small businesses, particularly in the retail, hospitality and leisure sectors, through the business rates support package, which totalled £13.6 billion.
I echo the consensus about the importance of a merry Christmas. In the last month, I have asked Treasury Ministers three simple questions: whether the Chancellor has considered abolishing non-dom status; whether the Prime Minister was consulted about doing so; and whether, when the current Prime Minister was Chancellor, he recused himself from discussions on the matter. I have asked those questions four separate times, but four times Treasury Ministers have refused to answer or even acknowledge them. Once might be an oversight and twice might be careless, but three times seems deliberate and four times feels like stonewalling. Will the Minister finally show that they have nothing to hide by answering my questions today?
I am pleased that the hon. Gentleman is entering into the spirit of pantomime season with his questions. We have been clear that non-doms paid £7.9 billion in UK taxes last year—a number that he does not seem able to accept—which is a significant sum of money. Although we keep the scheme under review, as I have said many times—perhaps he is choosing not to hear it—we must recognise their contribution in UK taxes, because that £7.9 billion helps to pay for the services that we all care so much about.
Well, that was the fifth time; I wonder what people will make of that.
We believe that to be trusted and effective, the tax system must be fair, yet while millions of working people and businesses across Britain are paying the highest tax burden in decades, those who use tax havens are playing by different rules. Those who benefit from tax havens are undercutting responsible businesses, undermining our public services and breaking the basic principle that we must all play by the same rules. Will the Minister agree that creating a fair tax system must involve challenging tax havens and those who avoid paying their fair share?
I ought to declare an interest at this point: I used to prosecute tax fraudsters for HMRC before I came to this place. I very much agree with the hon. Gentleman and put my money where my mouth is when it comes to tackling those fraudsters.
On the income tax take, the top 10% by way of income paid 36% of all tax in 2020-21. We are proud of the fact that our distributional analysis for the autumn statement shows that decisions made at that fiscal event are progressive: the lowest income households will receive the largest benefit in cash terms and as a percentage of income, and will on average be net beneficiaries of decisions made on tax, welfare and amendments to the energy price guarantee.
Energy Costs: Fiscal Support
Merry Christmas to you and your staff, Mr Speaker; as your fourth Chancellor of the year, I sincerely hope that I am here this time next year to wish you merry Christmas as well.
The Government are very conscious that these are tough times for businesses as well as families. That is why in the autumn statement I announced, among many other measures, a package of business rates support worth £13.6 billion over the next five years, including a 75% relief for retail, hospitality and leisure properties. That will help thousands of businesses in Scotland.
A very merry Christmas to you and yours, Mr Speaker, and a happy new year to boot.
My constituency of Kirkcaldy and Cowdenbeath plays host to energy giants Shell and ExxonMobil; Seagreen and Berwick Bank wind farms, which supply 2.8 million homes in England with energy, are just off our coastline. In such a land of energy plenty, it is perverse that so many people live in poverty and that businesses struggle to survive. Kirkcaldy ice arena is the oldest rink in the United Kingdom and home to the Fife Flyers ice hockey team. It survived world war two, fire, the financial crash and covid, but in energy-rich Scotland it is struggling to pay its unavoidable energy costs. What targeted support is the Chancellor going to make available for energy-dependent companies such as the rink? Will he meet me to discuss how best to tackle the problem?
We have announced a package of support for businesses this winter worth nearly £20 billion; it will help businesses throughout the United Kingdom, including in Scotland. It includes special measures for energy-intensive industries. We will shortly announce plans that will take effect from next April.
Cost of Living: Fiscal Steps
Because of these unprecedented and difficult times, the Government have chosen to make more than £100 billion of additional support available to families this winter and next winter, on top of increasing the national living wage by a record 9.7% and uprating benefits by inflation.
Businesses do not know what Government help, if any, will be available for energy bill support from April next year. They include nursing homes, supported housing schemes and older people’s schemes, which have been able to pass on lower costs to vulnerable residents. Without help, costs will significantly increase for those vulnerable people and affect the long-term viability of care and support services. What are the Government doing to address the issue?
I am very grateful that the hon. Lady asked that question. She is absolutely right; a number of businesses, charities and organisations such as care homes are extremely vulnerable because of the big increase in energy prices. All I would say is that she should look at what the Government have done this winter. With around £18 billion of support, we have demonstrated that we are aware of those concerns. Early in the new year, we will bring forward an appropriate package on what will happen from next April.
Energy Costs: Fiscal Support
We have reaffirmed our commitment to help hard-pressed families this winter with support for energy bills. We have introduced a range of measures to help those families, including capping energy bills at £3,000 this year and £2,500 next year.
The End Fuel Poverty Coalition has called for an immediate ban on the installation of prepayment meters made under court warrants, because of fears that energy suppliers are using them to disconnect the poorest and most indebted customers by the back door, and it claims that transferring households to prepayment meters often prompts people in debt to self-disconnect. Citizens Advice said that an extra 450,000 people could be switched to prepayment meters by the end of the year because of debt, and a record number of people could not afford to top-up their prepayment meters—the eighth time that record has been broken in the past nine months. This is a crisis made in Downing Street, and it is having a grave impact on a growing number of the most vulnerable households in my constituency and across the country. What will the Chancellor do to support people in that grave situation?
I thank the hon. Gentleman for raising that issue. There are 4.1 million people across the country on prepayment meters, and the Ofgem energy price cap covers all prepayment meter customers and ensures that they pay a fair price for their energy. Licence conditions require energy suppliers to provide extra support for those customers because, as the hon. Gentleman said, we recognise how vulnerable they are. We will continue to monitor the situation over the months ahead, because we are aware of the extreme vulnerabilities of that group.
A great number of my constituents who live in park home sites such as Willowgrove park in Knott End-on-Sea or Smithy Park in Winmarleigh, as well as boat dwellers on the Galgate marina, are concerned about their energy bills but seem to have been forgotten about by the Government. When is the £400 payment of support likely to be made to people in park homes and on boats, and what support will be available from April onwards?
I have heard from many voluntary groups in Warrington South, including organisations, such as the Scouts and Guides, that provide important extra-curricular activities for young people’s development, especially after the impact of the pandemic on their education and wellbeing. What steps are the Government taking to support charity and voluntary organisations, many of which have seen their energy costs increase by five times over the past year?
I am grateful to my hon. Friend for standing up for businesses and charities in Warrington, as he always does so ably. As he knows, this winter the energy business relief scheme is providing £18 billion of support for businesses and charities, and early in the new year we will announce how that support will continue after April. I reassure my hon. Friend that we are particularly concerned about the impact on charities, which see their costs go up but without a corresponding ability to increase their income.
I wish you, Mr Speaker, your team and the Treasury team a merry Christmas. Has the Chancellor had a chance to read the Treasury Committee’s report, published last week, about the welcome that we give to the cost of living support that he has announced for next winter? Did he also note our points about the potential cliff edges in that £900 support, and the recommendations we made to spread those payments more evenly over the course of next winter?
I wish my hon. Friend and all members of the Treasury Committee a merry Christmas. I have read a summary of their report, but I have saved the entire document for my Christmas reading, and I am immensely looking forward to that. The most important thing is that we are offering extra support for people who are vulnerable—support that amounts to £13 billion next year—and that comes before the support with people’s energy bills and a lot of other measures. My hon. Friend makes a very important point about cliff edges, which we will reflect on carefully.
Education Sector Funding
At spending review 2021, the Department for Education was allocated a total of £87 billion, providing a cash increase to our education system of about £18 billion by 2024-25. Young people and adults benefited from the biggest long-term settlement for post-16 education in England since 2015. Of course, at the recent autumn statement, an additional cash increase of £2 billion was provided for both 2023-24 and 2024-25.
There have been significant improvements in special educational needs and disabilities provision in Ipswich in the last few years. Just last week, the Under-Secretary of State for Education, my hon. Friend the Member for East Surrey (Claire Coutinho), was at the Sir Bobby Robson School, which has 66 new places. Suffolk has had 1,000 new SEND places since 2019, and all of that is because of the investment that my right hon. Friend just mentioned. However, it is ever so slightly frustrating that Suffolk is still unfairly funded compared with other areas, including not just London but Norfolk, where a SEND pupil will get £99 more per head than those in Suffolk. I want young people with SEND in Norfolk to have every chance, but there is no reason why young and vulnerable people in Suffolk and Ipswich should get any less funding and investment. Will he commit to reviewing the bizarre quirk that means that Suffolk SEND kids get less than kids elsewhere?
My hon. Friend is somewhat of an expert in the subject. I agree that it is critical that we get it right. Decisions on the distribution of high-needs funding are a matter for the Department for Education, but I reassure him that, as a result of the additional funding announced at the autumn statement, Suffolk’s high-needs funding is increasing by 11% per pupil in 2023-24 compared with this year. The Under-Secretary of State for Education, my hon. Friend the Member for East Surrey (Claire Coutinho), who has responsibility for children, families and wellbeing, will be happy to meet my hon. Friend to describe and discuss the different mechanisms of allocation and, indeed, how the high-needs formula works across different local authorities.
A merry Christmas to everybody when it comes. What steps is the Minister taking to review further education funding for people with disabilities? It is very important that people have equal opportunities across the United Kingdom and that our education system has inclusion at its core.
I completely agree with the hon. Lady, and I am working with colleagues in different Departments looking at the challenges to help people back into the workplace. It is particularly difficult when people need support for such a range of needs and conditions. We must treat everyone as an individual and be ever more creative in the solutions that we bring forward. I look forward to working with her and colleagues in Government to try to assist in improving the situation.
My Christmas wish for the economy is that 2023 is the year when we bring down inflation, and that means staying the course outlined in the autumn statement and giving people as much help as we can with the cost of living crisis. I am pleased that, yesterday, my hon. Friend the Exchequer Secretary to the Treasury was able to announce that we are freezing alcohol duty for a further six months.
This morning, I met nurses on the picket lines outside St Thomas’s Hospital. They do not want to be there, the unions do not want them to be there and the public do not want them to be there, but we understand why they are: it is because of the Government’s inflexibility over pay. The Government have deep pockets for bankers and their bonuses, dodgy personal protective equipment and fly-by-night Prime Ministers who blow up the economy. I took the Chancellor at his word when I was with him on the Health and Social Care Committee. Now that he holds the purse strings, will he enter into discussion with the unions and unlock this untenable situation?
I enjoyed working with the hon. Gentleman on the Select Committee. One thing that we both said needed to happen was to have an independently reviewed workforce plan for the NHS, so he will be pleased that I was able to announce that in the autumn statement.
The Government have announced cost of living support worth £26 billion in 2023-24. More than 8 million of the most vulnerable households across the UK will continue to be supported through to next winter via additional cost of living payments. In my hon. Friend’s constituency, that equates to 11,600 households who will be eligible for £650 of extra support this year through the means-tested benefits cost of living payment. I urge all colleagues across the House to look at the help for households website—helpforhouseholds.campaign.gov.uk —which can signpost people to the various funds and ways in which they can get support.
The end of the year is a moment for reflection, so let us look at the Government’s report card: a Tory mini-Budget that crashed the economy, waiting lists and times at record highs, trains delayed and cancelled all over the place, billions wasted on dodgy contracts, and a reshuffle policy that means everyone in the Conservative party gets to be famous for 15 minutes. Why is it that when nothing is working under the Tories, even at this time of seasonal gift giving, they still insist on making everyone else pay the price for their Government’s failures?
First of all, may I wish the shadow Chancellor, the right hon. Member for Leeds West (Rachel Reeves), a merry Christmas in her absence and a speedy recovery from the lurgy that I gather she has? I look back on the last 12 years of this Conservative Government with a great deal of pride. What the right hon. Gentleman never likes to mention in his comparisons is that Labour had a golden economic inheritance from the Conservatives in 1997 and left us with an economy that had run out of money. What have we done? We are the third highest-growing economy in the G7.
I welcome my hon. Friend’s strong support for his local economy and the small businesses that play such a vital part in his constituency. The VAT registration threshold, at £85,000, is more than twice as high as the EU and OECD averages, which keeps 3.2 million small businesses out of VAT—the majority of businesses in this country. I hope my hon. Friend will welcome the fact that since the start of the pandemic more than £35 billion has been provided to the tourism, leisure and hospitality sectors in grants, loans and tax breaks. As a Government, we recognise their incredible value and how important they are to the wellbeing of our constituencies.
I am sorry that I cannot give an early Christmas present. Allocations from that funding are the responsibility of the Secretary of State for Health and Social Care. I encourage my right hon. Friend to speak to the Health Secretary, who is working hard with the Treasury and other parts of Government to look at capital projects across the whole of health. Announcements will be made in due course, early in the new year, I hope.
I am grateful to the hon. Lady for that important point. Yes, I would draw attention to the cost of living support for those on disability benefits, which is extremely important, together with the energy price guarantee. On the specific point about the warm home discount, I am happy to look into that and write to the hon. Lady, but I remind her that in the autumn statement the Chancellor made a very significant commitment to energy efficiency which will apply to the whole country: the 15% target and £6 billion more funding for energy efficiency.
Inflation is high in the UK, but I understand that it is lower than the EU average. Why do we not do what they do in France? All the funding that goes into supporting people with the cost of energy is given to the utility companies so the bills are lower, thus reducing inflation.
Few colleagues put a question about inflation more eloquently than my hon. Friend. He makes an interesting suggestion. The support we have put in place has come through a variety of mechanisms, such as direct support for our constituents to help with cost of living and the energy price guarantee. He asks about how we ensure that that reduces inflation; the key point is that the OBR has confirmed that because of the energy price guarantee, the peak of inflation will be 2.5% lower than it would have been. That shows that our support is not only making a difference to our constituents this winter but is reducing the underlying cause of inflation, and that is in the best interest of the whole of the United Kingdom.
I am sure that like me, Mr Speaker, you long for the days of cool Britannia under a Labour Government. Touring musicians and performers are now hamstrung with restrictions and red tape because of the Government’s botched Brexit deal. We need a Christmas miracle, don’t we? When will the Government accept that this as a problem, and what are they doing about it?
I hope that, in the spirit of Christmas cheer, the hon. Lady will accept that the trade and co-operation agreement is the world’s biggest zero-tariff, zero-quota trade deal. It provides a strong base for UK businesses to trade with the EU. We continue to support businesses trading with the EU, as well as helping them seize new opportunities with fast-growing economies around the world through our free trade agreements.
The Chancellor was absolutely right in Edinburgh to include environmental, social and governance ratings agencies within the regulatory perimeter. But will he ensure that in the guidance, ESG objectives are consistent with the long-term actuarial goals of pension funds, to ensure that money is available in 20 or 30 years’ time, when people wish to retire?
I refer to my entry in the Register of Members’ Financial Interests. The Chancellor knows that a workforce plan cannot work if the Government cannot retain staff in the NHS. We cannot retain staff in the NHS if we do not pay them—that is why they are out on strike today. Will the Chancellor, instead of hiding behind the pay review body, admit that the Government set the remit for the pay review body? The only way to end this dispute is for Government to sit down with the trade unions and negotiate.
The hon. Lady is right about the importance of retention. That is why we are pleased to have 32,000 more nursing staff than at the start of the Parliament, which takes us some way towards our 50,000 additional nursing staff target. When there is a cost of living crisis, as we have at the moment, the best way to resolve this is an independent process. It is an independent process; when I was Health Secretary, it often made rulings that were not comfortable. The best way to resolve the situation is to respect that process.
Pensioners are increasingly worried about the fact that, although they have paid high—and now higher—taxes all their life, the service they get from the NHS seems to get worse. Will my right hon. Friend consider an idea put forward and implemented by his great predecessor, Ken Clarke, to give tax relief on private health insurance for pensioners? If we were to have a meeting, could he invite his hon. Friend the Exchequer Secretary, who campaigned for this idea before higher office silenced him?
My right hon. Friend always asks important and challenging questions. I do not agree with the way forward that he has outlined, but Ken Clarke revolutionised our education system by introducing Ofsted, which has led to a massive increase in standards in our schools. That was the reason I introduced the Ofsted system in our hospitals through the Care Quality Commission, which is also seeing a big improvement in standards.
God’s richest blessings to you in this Christmas season, Mr Speaker.
My constituent, who owns a small business, paid VAT on goods that they had ordered and brought back to Northern Ireland, only to receive a second VAT bill from the Republic of Ireland because of the Northern Ireland protocol. That makes doing business totally unaffordable. A previous Prime Minister said that businesses could tear these documents up. Can my constituent tear these documents up?
For the majority of businesses trading in Northern Ireland, VAT continues to be accounted for in much the same way as when they trade in the rest of the UK. We are confident that the implementation of the Northern Ireland protocol for VAT mitigates the risk of double taxation in Northern Ireland. We know of one example and HM Revenue and Customs is working with that business to see what more can be done, but I am happy to take up the hon. Gentleman’s question outside the Chamber.
Merry Christmas, Mr Speaker.
Rural poverty is devastating, but it is often hidden by the relative affluence of surrounding rural areas. To ensure that councils have the funding that they need to support those who are living in rural poverty, will the Chancellor and his officials meet me to discuss putting social mobility into funding formulas alongside deprivation, to get councils what they need and to end rural poverty?
A happy Christmas to everybody.
The latest estimate that I have seen is that the Government’s failure to clamp down on tax havens in our overseas territories and Crown dependencies has cost us £65 billion—almost half what we spend on the NHS, or a third of our education budget. Does the Chancellor agree that our public finances would be in a far better shape, our taxes would be far lower and our tax system would be far fairer if we had cracked down on our tax havens?
We always need to be vigilant about tax evasion and work closely with the overseas territories and Crown dependencies on those matters. A lot of progress on registers has been made in recent years, and more is due to be made. I will continue to reflect carefully and work with the Economic Secretary on further improvements to get things to where they need to be.
Does the Chancellor agree that investor confidence in the United Kingdom will be increased only if we bring forward the overdue reforms to the law of corporate criminal liability? If so, will he and the Treasury support further amendments to the Economic Crime and Corporate Transparency Bill, including those that would implement the Law Commission’s recommendations to create further “failure to prevent” offences?
My right hon. and learned Friend is one of the people who knows most about corporate criminal liability. I would be happy to take his question away and discuss it with him, because it is critical that the justice system addresses not just individuals who have criminal liability, but companies; indeed, I have prosecuted many companies across a range of offences. We understand that they can commit crimes too, so I am very happy to take his question away.
The people of Doncaster will be eternally grateful for the help that they received through the pandemic and for what they are receiving through the cost of living crisis, but Doncaster still needs a new hospital. Although money is tight, will the Chancellor meet me with the Secretary of State for Health and Social Care to see how we can achieve that goal in the new year?
I am more than happy to meet my hon. Friend again to discuss the matter in detail. As I mentioned in my reply to my right hon. Friend the Member for Basingstoke (Dame Maria Miller), the situation with the capital programmes is under urgent review across the country. I hope that further announcements will be made in the new year, but I will certainly meet my hon. Friend anyway.
A few months ago, the Chancellor promised at the Dispatch Box that he would make a further announcement about the energy bill relief scheme before Christmas. Nothing has yet been forthcoming. Small businesses, charities and schools in my constituency either face going under or face huge deficits in the coming year. Will he confirm when he will make a further announcement about support for businesses, the public sector and charities, and whether this House will have the opportunity to scrutinise it?
As well as reassuring financial markets and bringing down mortgage rates, the autumn statement did a great deal to help consumers and businesses through winter energy prices. When my right hon. Friend comes to announce what further help might be available for businesses after March, will those in the Treasury also highlight the opportunities for business from the increased business rate discounts for the hospitality and leisure sectors that will come in the spring?
We will certainly do that. I know that the 75% discount we announced for retail, hospitality and leisure businesses will make an enormous difference to businesses in Gloucester, as will the £2.5 billion annual discount in business rates overall as we make the transition to the new system.
A very Merry Christmas, Mr Speaker.
With oil and gas companies making grotesque profits from high global prices, it is beyond belief that the Chancellor does not scrap the so-called investment allowance announced in the autumn statement, which means that companies are still able to claim £91.40 in tax relief for every £100 invested in oil and gas infrastructure. Will he now come clean about the cost to the taxpayer of this perverse and utterly unjustified subsidy?
I am happy to confirm that that levy will raise £40 billion. As I said earlier—and this is very important—the support that the hon. Lady’s constituents, and indeed all our constituents, will receive this winter has to be paid for somehow. A key purpose of the levy is to help fund support for businesses and for our constituents, with higher cost of living payments for the most vulnerable and those on benefits. It is extremely generous, and, as I have said, it is bringing down inflation for the whole country.
Over the weekend, an anonymous Conservative MP admitted to a newspaper:
“We’ve got no ideas and people feel abandoned.”
This was an
“economy that’s in recession with 10 per cent inflation”
“possibly one of the least successful governments in modern Europe.”
My constituents are going into Christmas poorer as a consequence of 12 years of Conservative government. Is the Chancellor proud of that?
I know that the Chancellor has invested in public health personally, but may I urge him to invest, in a fiscal sense, in beer and alcohol duty, and to create a differential between off-sales and on-sales? On-sales are where jobs and tax and employment are generated, and off-sales are where all the harmful drinking comes from.
In my statement yesterday I not only confirmed a six-month extension of the alcohol duty freeze, but announced that next August we will introduce an ambitious reform package which will include—this is happening for the first time ever, and is only possible because of our departure from the European Union— a duty rate differential between what is on tap, namely draught beer, cider and so on, and what is in the supermarkets. That will create a level playing field which I think is in the best interests of our pubs.
Asylum seekers, who are at the very sharpest end of the cost of living crisis, have seen only a 13p increase in asylum support payments. Will the Chancellor uprate that? It should not fall to brilliant charities like Refuweegee to ensure that asylum seekers get a Christmas this year.
I think that communities up and down the country are doing amazing work to support, in particular, the Ukrainian visitors who came here this year at very short notice. We have just agreed a new package of support with the Department for Levelling Up, Housing and Communities, which gives guarantees going forward into next year.
Annual Fisheries Negotiations with EU and North Atlantic States
To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on the outcome of the annual fisheries negotiations with the European Union and other North Atlantic states. Thank you for granting the urgent question, Mr Speaker.
I am responding on behalf of my right hon. Friend the Secretary of State.
As an independent coastal state, we have taken back control of our waters and have the freedom to negotiate on our own terms and push for deals that will deliver for the UK fishing industry, for the marine environment, and for all parts of the United Kingdom. I am delighted to say that this autumn the UK has secured vital deals for 2023 with our coastal state neighbours, including the European Union and Norway. Taken together, these deals have secured more than £750 million-worth of fishing opportunities for the UK fleet in 2023, £34 million more than last year.
The UK has put sustainability at the heart of these negotiations, and an initial estimate suggests that nine more catch levels align with the scientific advice than did so last year. This is an important step forward and will allow our most important stocks to be fished sustainably. That is essential for a thriving fishing industry for the future. The UK will continue to champion sustainability throughout all negotiation forums and push for other coastal states to do so too.
Through the trade and co-operation agreement we will also have the specialised committee on fisheries with our EU counterparts. We use this forum to consider a range of issues, including how to increase the sustainability of certain stocks, which we hope will improve the outcomes of the negotiation in the longer term.
The UK’s fishing opportunities are negotiated in three main forums. First, the UK-EU bilateral. Today the UK reached an agreement with the EU on total allowable catches in 2023 for 69 stocks, as well as arrangements for non-quota stocks. This deal provides fishing opportunities for more than 140,000 tonnes for the UK fleet and is worth around £282 million based on historical landing prices. As part of this deal, we have agreed access arrangements on albacore tuna and spurdog in the North sea for the first time through the UK-EU written record. For non-quota stocks, we have agreed a roll-over of access arrangements for 2023 to ensure continued access to fish non-quota stocks in EU waters, worth around £25 million a year to the UK fleet. The House will also want to note that, as a result of the quota share uplifts agreed in the trade and co-operation agreement, the UK has around 30,000 tonnes more quota from these negotiations than it would have received with its previous shares as a member of the EU.
The second main forum where we negotiate our fishing quotas is the trilateral arrangement that focuses on stocks that we share with the EU and Norway in the North sea. In that negotiation, there were significant increases for North sea whitefish quotas, all set at levels either in line with or below those recommended by scientists. This deal is worth over £202 million to the UK fishing industry in the North sea and a further £11 million in waters around the UK based on historical landing prices. The UK also reached a deal with Norway that ensures stability for the UK whitefish fishing industry through continued access to each other’s waters for 2023. Our arrangements with Norway also mean that our crucially important long-distance fleet has access to fishing opportunities worth over £12 million in the Arctic region at a time when the main quota in that area fell by 20%.
Many Members will know that the UK has a significant interest in pelagic stocks, and these form the third main negotiation each year. This autumn we have agreed quotas with the other coastal states in the north-east Atlantic for mackerel, blue whiting and Atlanto-Scandian herring. These quotas were all set at the level advised by scientists and will be worth over £250 million to the UK fleet in 2023.
These deals are crucial to the long-term health of our vital fishing industry, but it is not just about securing financial value for the year ahead, important though that is. These negotiations are a crucial route for the UK to protect our fish stocks, to safeguard the marine environment and, in turn, to ensure that the fishing industry can profit and thrive for future generations. As we head into 2023, I am excited to carry on working with the industry to maximise fishing opportunities and put sustainability at the forefront, and, in short, to continue to support a fantastic sector to profit, modernise and succeed.
I am most grateful to my right hon. Friend for that answer. I should point out that I chair a community interest company, REAF—Renaissance of the East Anglian Fisheries—which has the objective of regenerating the East Anglian fishing industry. Much of our fleet is inshore in nature, pursuing non-quota species, and thus the outcome of these negotiations is only of some relevance with regard to stocks such as sole. That said, the matter is of vital importance to the whole industry, as it provides the foundation stone on which it can be rebuilt all around the four nations of the UK.
It used to be an annual tradition that the Minister would come to this Chamber to make a statement at the conclusion of the negotiations, and thus it is to be regretted that it has been necessary to submit this urgent question, particularly taking into account the enormous interest in fishing generated by Brexit and the role that the industry can play in levelling up coastal communities such as Lowestoft, which I represent.
My right hon. Friend highlighted the fact that the total UK fishing opportunity secured across the three main negotiating forums totals £750 million, an increase of £34 million on the previous year. This 4.7% increase is considerably below the level of inflation, which is currently hitting fishing businesses particularly hard.
I would be most grateful if my right hon. Friend could add to his statement by answering the following questions. Will he advise the House as to the preparatory work that is carried out to ensure that the UK achieves better outcomes from negotiations now that we participate as an independent coastal state and are not part of the EU? What monitoring work is carried out after each annual negotiation?
The negotiations were due to complete by 10 December; I would be most grateful if my right hon. Friend could advise the House as to the reason why they did not. Have the issues that caused the delay been concluded satisfactorily from the UK’s perspective?
To revive the fishing industry post Brexit, it is necessary to enhance trust and for the Government to work in partnership with the devolved nations, industry and conservation organisations. This is best achieved by increased transparency, so will my right hon. Friend publish the positions that the UK took in respect of the total allowable catch levels for each stock? Progress towards sustainable fishing requires accountability, and the Government would contribute to that by making that information available.
Finally, as mentioned, East Anglian fishermen will accrue limited immediate benefit from the outcome of the negotiations, but from that outcome should flow the improved management of fisheries and increased access to fishing opportunities for local fishermen. With that in mind, will my right hon. Friend provide a progress report on the Government’s plans in that regard?
I pay tribute to my hon. Friend not only for tabling the urgent question but for the work he does to represent his constituency. It is a little disingenuous of him to say that he dragged me to the Chamber for the urgent question; the ink went on the agreement when it was signed this morning, just after 10.30 am—around quarter to 11—which was after the statement deadline, meaning that it was not possible for me to bring a statement to the House.
Nevertheless, I am delighted to be here to celebrate what is a great deal. As my hon. Friend has identified, we are 30,000 tonnes better off now that we are outside the EU than we would have been had we remained a member state.
My hon. Friend made reference to the 10 December deadline, which I think was a false deadline. We were of course always ambitious to try to conclude the negotiations, but as the Minister I was always clear that it is more important to get the right deal than to get a quick deal and that setting false deadlines does not always bring us to the right deal.
My hon. Friend mentioned our negotiating position and asked whether we would lay it out in public. I am afraid to say to him directly that no is the answer. I am not prepared to share our negotiating position. I do not think that is how we get a good deal for the UK, which is what we have secured. If we set out in public where our red lines are before we enter the room, we tend to move quickly towards those red lines and fall back from that position.
I congratulate the hon. Member for Waveney (Peter Aldous) on securing the urgent question. I share the hon. Gentleman’s frustration that it took an urgent question to hear about the negotiations. I hear what the Minister said about the timeframes, but there was a convention under which each year the House had a proper discussion about the outcome of the negotiations. I hope the Minister will promise today to return to that convention so that we can have proper and full discussions.
I pay tribute to the Royal National Lifeboat Institution and other charities, as well as the fishers, who last week intervened so effectively to save human life in the channel. I remind the Minister of the continuing anguish that is being caused to many in the inland fleet at the hands of the Maritime and Coastguard Agency; the Minister really needs to work with colleagues to get a grip on that.
On the recent negotiations, it is clear that many industry players have welcomed the outcomes of the various sets of talks, and that is positive, but may I ask the Minister about the status of the Faroe talks? What efforts were made to ensure that the deals made with the EU and other coastal states included a commitment to keep Russia’s fleet out of their waters? Although we welcome the promise to stop the fishing of sand eels in our waters, will the Minister tell us when that will take effect and whether we have secured commitments from others during the negotiations?
In general, we will, of course, want to see the detail of the outcome and understand the potential environmental impact, but not everyone in the industry is quite as happy as the Minister says. Therein lies a fundamental problem that we have identified in the new architecture, including in the latest version of the joint fisheries statement, something also recently published and not discussed in this House. Although the Minister speaks for the UK Government, the devolved Governments of Scotland, Wales and Northern Ireland also play an important role in fisheries management, so we ask again: who speaks for England?
Labour has consistently pointed out that no one fights the corner for English fishing in these negotiations. The statement has been welcomed by the Scottish Government and fishing sector, but can the Minister explain how much of the increase in catch will be available to the hard-hit English fishing sector? What will be the overall impact on jobs and economic opportunities in our English North sea fishing ports and surrounding communities?
The Minister mentioned the distant fleet. Jane Sandell, the chief executive officer of UK Fisheries Ltd, which is based in Humberside and operates in distant Arctic waters, did not react with any positivity about this outcome. She called it
“yet another body blow for fishers in the North East of England. While the government is gloating over its ‘success’ in the Norway talks, we are having to make skilled people redundant in the Humber region. It’s an absolute travesty of fairness and common sense.”
She also said:
“The few extra tonnes of whitefish in the Norwegian zone won't come close to offsetting the loss in Svalbard due to the reduced TAC. Defra knows this, and yet it simply doesn’t seem to care about the English fleet.”
That was borne out at the Select Committee on Environment, Food and Rural Affairs a couple of weeks ago, when the Secretary of State appeared to be unaware of the problems facing the English distant fleet. So perhaps the Minister can explain today why the English distant fleet has fared so badly, and what he plans to do about it.
We have of course tabled a written statement; we did that as soon as we were able, give that we signed the deal this morning. Once again, it is a little disingenuous to say that we were not prepared to make a statement, as the deal was not signed until after the statement deadline.
I am sure that the hon. Gentleman will be aware that the Faroe Islands has just concluded its general election and is in the process of forming a Government, so it is difficult to negotiate with its Fisheries Minister when that Minister has not been appointed. As soon as that Minister is appointed, we will be back around the table talking to them to try to sort out the challenges we face, particularly on the Russian fleet, which the Faroes has allowed access to its waters.
I will write to the hon. Gentleman with the details on sand eels. He talked about the devolved Administrations, the north-east fleet and who represents England. We tried very hard on this. We work with our devolved Administration colleagues constantly and we worked very hard to get a fair deal for all parts of the UK. We get the best deal for the UK and we try to divvy that deal up as best as we can among the devolved Administrations and around the coastline. I think we have struck the right balance. It is entirely possible to increase quota for any part of the UK that we want to, but we have to take that off somebody else. If he wants to write to me to tell me from whom he wants to remove quota, we will give due consideration to that representation and consider his thoughts.
I am surprised to hear the Minister say that he could not make a statement on this before today, because there was a statement on the Government website on 9 December.
I welcome the fact that we have got an agreement for the North sea that relies heavily on scientific advice. However, although an increase in catch quotas is welcome, certainly for the Scottish fishing industry, we also need seamless access to export markets. So will the Minister listen to calls from the industry for an improved deal for market access to the EU for Scotland’s fishing industry? The all-party group on fisheries recently reported that the fishing industry now takes a “principally negative” view of Brexit. In Scotland, that industry was almost the only voice for Brexit before the referendum. Does the Minister agree with the Scottish White Fish Producers Association Ltd that
“Brexit failed to deliver any benefits of being a coastal state”?
Given that Brexit red tape and paperwork alone cost the UK fishing industry £60 million in just the first 12 months, not including the cost of lost trade, when will the Government recognise the damage that Brexit has done to our fishing communities? When will they compensate them adequately for that loss?
Finally, I note that one big increase in quota is for blue whiting, which has increased by 80%, against the strong wishes of the UK and Scottish Governments, who wanted a more cautious approach on that species. How much of the increased value of this deal for the UK fishing industry relies on that increased quota for blue whiting, which the UK Government fought against?
Clearly, this deal is better than what we would have negotiated had we been within the EU. I hear the hon. Gentleman’s comments about market access, and we continue to work with our colleagues in Europe to secure better access to those markets. That is all part of a long-term strategy to negotiate with our friends on the other side of the channel. Clearly, the 30,000 tonnes we were able to negotiate is a significant amount of fish, and better than we would have done as an EU member state.
I also say gently to the hon. Gentleman that this time we have seen increases in cod; in whiting and in saithe in the North sea; in megrims and in anglerfish in the Irish sea; in nephrops in the Irish sea and the Celtic sea; in nephrops in the west of Scotland; and in hake and in spurdog in the western area. I could keep going down the list, but we secured a good deal for the UK. Scotland gets its fair share of that deal, and I would have hoped that he would be more positive, on behalf of his Scottish fishermen, than he has been.
That is a good question. We need to do all we can to support the processing industry in the UK, because it is vital that we can process UK fish caught in UK waters in UK ports, to create UK jobs. We continue to work with our friends in the Home Office to make sure that the industry has access to good staff and to plentiful employment. We will do all we can to support ports such as Fleetwood, and others up and down the country.
May I place on record my thanks to the crew of the Arcturus, a Plymouth-based fishing vessel that was first on the scene to rescue the capsized people in the channel last week? Their brave actions saved lives.
The majority of the employment in fishing lies in small boats, but they have only a fraction of the overall quota. Super-trawlers, especially foreign-owned ones, are hoovering up huge amounts of our fish from our marine protected areas. Is it not now time to ban foreign-owned super-trawlers from fishing in marine protected areas and to make sure that where they do fish in UK waters they land all their catch in UK ports?
First, I pay tribute to the hon. Gentleman’s constituents who were first on the scene; it emphasises what a dangerous occupation fishing can be at times.
Interestingly, the hon. Gentleman sort of contradicted his Front Bencher to a certain extent, in that the huge north-east shipping fleet that the hon. Member for Cambridge (Daniel Zeichner) was talking about could be a victim to the sort of policy that the hon. Gentleman is suggesting on hoovering up large amounts of white fish in the Arctic. However, I recognise the importance of small boats, particularly on the south coast. We continue to support that sector of the fishing industry, and I look forward to visiting it soon to hear from it directly.
Merry Christmas to you, Mr Speaker, and to everyone in the House.
I congratulate the hon. Member for Waveney (Peter Aldous) on securing the urgent question. We know that following the trilateral deal, what was critical in the UK-EU deal was mitigating the 30% decrease in monkfish stocks. Part of that has come about because of precautionary advice on monkfish stocks, but we know that the data on monkfish is not as robust as it could be. What steps is the Minister taking to ensure that we have the right data so that we can take the right actions?
I thank the hon. Lady for her question. Of course, I have had discussions with the Centre for Environment, Fisheries and Aquaculture Science and the Marine Management Organisation to make sure that we have the best data available on monkfish. There were a few issues in obtaining the right sort of data during the covid period. We are satisfied that the data we have is accurate, but she is right to identify that during negotiations with the Norwegians we were able to secure more anglerfish and monkfish quota to try to help out and mitigate the impact of the drop in the total allowable catch overall.
A merry Christmas to you, Mr Speaker, and to all the House.
Many of my constituents in Newcastle enjoy fresh fish landed locally from the North sea—they know that it is fresh because it is landed locally. There have been a number of questions on this, but I am still not sure whether I have an answer. Can the Minister say that, as a consequence of this deal, more fish will be landed in English ports? Moreover, can he confirm that, in the North sea ports, we will have more local fish landed locally as a consequence?
Many of those are individual decisions for skippers of boats. They choose where to land their fish, and I do not want to start dictating to skippers where they can and cannot land. In securing more quota, a greater share and more tonnage, it is very much hoped that those boats will land within our ports. We will do all we can to support the processing industry and those markets to ensure that that happens.
Panic was setting in there, Mr Speaker.
I thank the Minister for his answers to the questions. He understands the issues for fisheries and, in particular, for fisheries in my constituency of Strangford and also in Portavogie. I spoke to the Anglo North Irish Fish Producers Organisation this morning. Will the Minister provide an assurance that the necessary parliamentary time will be provided to ensure the urgent passage of the statutory instrument to remove spurdog from the list of prohibited species? That will allow British fishermen to take advantage of the fact that there could be a fishery for this species in 2023, which is good news. My understanding is that the EU could fish for spurdog right now, but it has deferred the decision for two months. Time is therefore urgent. I know that the Minister will not want the British fishing sector to be disadvantaged in any way, so the two months must be used for the necessary SI to be introduced in this House.
As ever, the hon. Gentleman is very well-informed. There is a requirement for a statutory instrument to allow the spurdog quota to be accessed. This is a new quota. He is right in saying that we will have to process that SI as rapidly as possible. However, I cannot stand at the Dispatch Box and make commitments on behalf of the Leader of the House or business managers, but he can rest assured that the Department is working very hard to make sure that that SI is in a place to be deployed, and we will be pressing business managers to get it through the House as rapidly as possible.
Service Family Accommodation
I thank the hon. Gentleman for his urgent question.
The provision of safe, good quality and well-maintained accommodation is an irreducible minimum when it comes to supporting our armed forces. It is essential to operational output, recruitment, retention, and morale, which is why providing such accommodation is a core priority of the Ministry of Defence.
More than 96% of the MOD service family accommodation of 46,000 properties meets or exceeds the Government’s Decent Homes Standard. Only those properties that meet this standard are allocated to service families. However, it is unacceptable that some of our personnel and their families are not receiving the level of accommodation services—in the form of maintenance standards—from our suppliers that they deserve and, in particular, are suffering from a lack of heating and hot water. I have spoken to a number of our personnel, from a range of ranks and circumstances, and I share their indignation. It is not acceptable.
MOD contractors are under a legal, but also a moral, duty to resolve heating and hot water problems. What are those duties? Emergency calls should be responded to, and the issue made safe within two hours. An emergency is an incident that threatens imminent risk of injury to persons, or that presents a high risk of extensive damage to property or the environment. Urgent calls should be responded to as soon as possible and within 48 hours. Those are the terms of the contract that were agreed, but our suppliers in too many cases are failing to meet those requirements. We expect and demand that our suppliers do better, and we will do everything we legally and properly can to force them to do so. Let me be clear: no home should be left without heating or hot water for more than 24 hours. Should it not be possible to resolve the issue quickly, alternative forms of heating and sources of hot water, or alternative accommodation, must be provided.
Rectification plans were triggered by the Ministry of Defence earlier this year following concerns about contractor performance. Since then, access to temporary heaters for families without heating has been improved. A total of 1,500 additional heaters have been purchased, and they are being dispersed at various locations based on several factors, including where there is a high density of homes.
Secondly, there is an increased use of temporary accommodation to support families with vulnerable people, or where some form of heating cannot be restored in a reasonable time. Thirdly, more staff are being recruited by Pinnacle, VIVO and Amey and, following a call to the National Service Centre about a heating or hot water issue, families will be contacted by a qualified engineer to support the diagnosis of faults, enable remote fixes if possible, and arrange an appointment if a remote fix cannot be achieved. All families will also be provided with temporary heaters, or offered alternative accommodation, should a fix not be possible.
Fourthly, I can confirm that compensation will be paid to families to cover any increased energy costs caused by the use of temporary heaters. VIVO, Amey and Pinnacle are, I know, in no doubt about Ministers’ profound dissatisfaction at their performance. I have met them already and I am meeting them again later today. This is not any old contract. This is a contract to support the accommodation of British service personnel and their families—the people who answer the call of the nation to step up and defend us when required. These contractors must improve. They will improve, or they will face the consequences.
I thank the Minister for his response. There will be complete agreement, I am sure, on the importance of looking out for those amazing men and women who serve in our armed forces and, critically, their families as well. The Minister will be well aware—he alluded to this in his statement—of the volume of concerns about the state of service family accommodation and single living accommodation. It is particularly concerning given the recent freezing weather and proximity to Christmas, but it is also at a time when our armed forces continue to be busy, not least, potentially, with commitments to Military Aid to the Civil Authorities.
Some shocking recent accommodation cases include: recurring black mould causing viral infections in children; crumbling roofs leaving houses exposed to the elements; burst pipes flooding homes; and broken boilers in sub-zero temperatures. What is worse is that, currently, there is no reasonable way to report and resolve those problems, as there are waits of two hours on Pinnacle’s helpline, if callers can get through at all. Even when a report is lodged, there is no guarantee that a repair will happen urgently.
Such are the concerns that have been expressed about the inaction of various contractors, there is evidence of soldiers signing out sleeping bags. No single contractor is responsible for repairs and maintenance, meaning that there is no central responsibility. However, there is central accountability, and, ultimately, that lies with the MOD.
Those who step forward to serve deserve and expect better. I look to the Minister to act urgently, by which I mean today, to move heaven and earth to ensure that measures are being taken to alleviate this problem. Can I ask him to provide an update on whether the Secretary of State’s meetings with the Defence Infrastructure Organisation, Amey, Pinnacle and VIVO have taken place? If not, why not? Can he outline a plan for MOD intervention to ensure that the backlog of repairs is dealt with as a priority? Can he say more on how the Department will support service personnel and their families affected by these issues over the Christmas holidays?
The current standards of service accommodation are just not good enough. We are a very long way away from homes fit for heroes. The Government must do better.
I thank the hon. Gentleman for those remarks, many of which I completely agree with. He asks whether we will act today. I can say that the Secretary of State has met the DIO, Pinnacle, Amey and VIVO and that some of these issues were becoming apparent quite some time ago. In fact, a rectification plan was imposed in the middle of September. There were 480 or so elements of that plan, of which 200 have been complied with. That does not mean that the situation has been sorted—far from it—because when the cold snap came, we saw that it revealed more difficulties.
The hon. Gentleman asked about the backlog. I can say that the backlog of complaints peaked at a stunning 4,200 or so. That has come down to around 3,100, but I completely accept that that is far too many.
The real issue, it seems to me, is there must be prevention in the first place. In other words, the quality of accommodation must be good enough at the point that service personnel go into the properties in the first place. There are some indications of improvement in that regard. First, in addition to the standard £176 million for accommodation, the MOD has allocated £350 million over and above that annual sum to get on top of the maintenance issues. In July of this year, when 1,276 service personnel went into properties, 4% turned out on the day to have non-habitable failures; by December that figure had gone down to 0.6%. This is about ensuring that the properties are fit for purpose at the outset.
On the issue of mould, which the hon. Gentleman is right to raise, it is unconscionable to think that people should be moving into properties with any mould, and I am pleased to have had a clear assurance from DIO that that will not happen again. Now, if there is a report of mould, a fully qualified inspector should come in to do a proper report and alternative accommodation should be provided, if appropriate. I will end where he did: these are people who come to serve our country, and the least we can do is ensure that they have proper accommodation. I will do everything in my power to ensure that we honour that requirement.
I welcome the Minister’s tone in wanting to grip this issue. I put in an urgent question for this yesterday, as Mr Speaker knows, and I am really pleased it is being discussed today. It is shocking state of affairs. We talk about having the most professional armed forces in the world, we give them excellent equipment and we train them well, but accommodation has constantly played second fiddle—
Order. I think it is rather naughty of you to say that. The fact is that if I were to see everybody who put in for urgent questions, I would spend all day doing that. Accept that you have the urgent question; we do not need to go over what you did or did not do, because you put in a lot of urgent questions and you get a lot.
I am grateful for that clarification, Mr Speaker; it was not in any way a complaint, but a confirmation. I am delighted that we are able to address this matter today. As I was saying, we have the most professional armed forces in the world, but I am afraid that accommodation plays second fiddle to the equipment and the training that we provide them. I ask the Minister what is going to happen in the integrated review, which is due for an update shortly. Will it identify funding to be put in place to make sure we can improve the accommodation? This problem did not happen in the last few days. Reports of heating and boilers not working, let alone the mould that he speaks about, need to be addressed, or the soldiers, sailors and air personnel will vote with their feet and depart the already overstretched armed forces.
The right hon. Gentleman is absolutely right that this is an issue about ensuring retention in the armed forces. He asks about money going in: one positive thing, as I indicated, is the £350 million going in over two years, over and above the budget. However, I do not want to let the contractors off the hook. He is right that there is a backlog of work that needs to take place, and I have talked about the £350 million for that, but one of the most shocking things about this to me, as a new Minister coming in, is that it appears to have come as a surprise to Pinnacle, Amey and VIVO that their IT systems were not properly married up. Service personnel would pick up the phone to report a complaint to Pinnacle, but by the time it got VIVO or Amey, it was not necessarily the right contractor who turned up. That is an IT failure. They are grown-ups entering into a contract—caveat emptor and all that—and they should have known what the situation was and have made arrangements accordingly. As I said before, this is not any old contract. It is a contract to provide accommodation. People need to be sure of their ground before they take on one of these deals, and clearly they were not.
Broken boilers, water pouring into homes, mould, vermin and painful waits for basic repairs—all while Ministers cancel troops’ Christmas leave. Our forces deserve so much better. It is a national scandal that the Government are leaving service personnel, their families and their children without heating and water during the coldest winter for more than a decade. Can the Minister say exactly how many forces homes are currently without heating or hot water, and what he is going to do about it? Can he guarantee here and now that no one in uniform or their family will be without heating or hot water this winter?
Although shocking, these reports are unfortunately not surprising. There are deep-seated problems with the Government’s handling of Defence housing, going back years. One third of our armed forces personnel are dissatisfied with the overall standard of their family accommodation and almost one in three service family homes are awaiting repair. Between June and October this year, more than 5,000 maintenance appointments were missed. Is the Minister confident that his contractors are meeting their mandated key performance indicators? It certainly does not look as though they are. The MOD paid £144 million to contractors to supposedly maintain service family accommodation this year. Is he satisfied that that represents value for taxpayers’ money?
These reports of dodgy accommodation not only are a breach of the contract the nation makes with those who serve, but pose a risk to recruitment and retention. More than one quarter of armed forces personnel said that poor accommodation increases their intention to leave the services. Decent accommodation is a fundamental part of our moral obligation to those who serve and their families. This Government are failing our armed forces when it comes to service accommodation and we need to see better from Ministers. In setting out what he has done, will the Minister now apologise to forces and their families, many of whom will be spending yet another Christmas in shoddy military accommodation?
The hon. Gentleman asks, quite fairly, whether I think that the contractors are meeting their requirements. We are absolutely clear that they are not meeting their requirements. Indeed, that is why a rectification plan was imposed as long ago as September; it was clear that there were some fundamental issues going wrong. I have spoken about the IT issues, but also, candidly, there were not enough people in the call centre. I think Pinnacle had 14 people, although that has now been increased to 60.
I get that there has been some snow and ice, but not biblical levels of snow and ice; these are things the contractors should have accounted for and prepared for. The hon. Gentleman asks whether the contract is value for money, and no, at the moment I do not think it is. If the contractors performed, it would be a perfectly sensible contract, but I reiterate: over and above the annual amount, we must ensure there is the £350 million of support to get ahead of this problem, so that we can have a well-maintained service family accommodation estate that does not run into problems in the first place. I am pleased to note that there is £76 million targeted towards improving thermal efficiency—to you and me, Mr Speaker, that means boilers, insulation and so on—which again will resolve some of these issues.
There are lessons to be learned, candidly, and I am clear about that. One thing that must be investigated is how this contract was entered into. Was it the case that some people were—how can I put it?—a little economical with the actualité when indicating what they could provide by way of support and IT? What did they say and when? We need—[Interruption.] Of course we should also look at the due diligence; that is a fair point as well.
The hon. Gentleman made a political point at the beginning, and I hope he will forgive me for saying this: it is true that a lot is being asked of our troops at Christmas, including to fill in for jobs that others are not doing. I urge him to join the Government in saying that those going on strike should call those strikes off so that our troops can get the Christmas they deserve.
In February 2020, I co-authored a report called “Stick or Twist?” for the Prime Minister, copied to the Defence Secretary, after a year-long study into why armed forces personnel leave. Poor standards of accommodation was one of the major factors why they decide to stop serving the Crown. In that report, we pleaded with Ministers not to go ahead with the Future Defence Infrastructure Services contract, but to look at better alternatives, such as a bespoke forces housing association instead. Nevertheless, they ploughed on. FDIS will never work. It is structurally dysfunctional. I say to the MOD: “Please, on behalf of service personnel and their families, rip off the plaster, admit you were wrong, create a workstream on accommodation as part of the integrated review, and do something better that actually works.”
As my right hon. Friend indicates, he has been assiduous in raising the issue of service family accommodation, and I commend him for doing so. There will have to be a long, hard look at FDIS, and I suspect—in fact, I know—that the MOD will look carefully at the points he made in his “Stick or Twist?” report. We will have to see what the lessons are from entering into contracts such as this, and it may be that he is absolutely right.
Once again, we are debating with a Minister forced to atone for the appalling housing conditions inflicted upon our armed forces. This is, of course, a decades-long problem, which the MOD continues to show no strategy to resolve. Pinnacle was recently, in March, awarded a £144 million contract to manage these homes. This money has barely scratched the surface. It has been reported that families are still being issued with sleeping bags and are sleeping in their coats in mould-ridden houses, and some go weeks without heating. Some houses are so badly insulated that families cannot afford to turn the heating on. How can the Minister defend that enduring shame?
Senior officers and junior ranks alike are frustrated by an unresponsive private sector facilities management contractor. That is further compounded by the now demonstrably failing Defence Infrastructure Organisation. Is that failure in political leadership caused by a lack of funding, the DIO’s incompetence, a failure of the contractors, or all three? Can the Minister say specifically that he has full confidence in the executive officer team of the Defence Infrastructure Organisation?
On the plan, as I have been at pains to underscore, the MOD is specifically putting money into that area over and above the normal maintenance contract. That is absolutely critical. It is what the hon. Gentleman would do in his own house if he wanted to get on top on maintenance issues: if he were able to, he would invest in it to ensure that things do not go wrong in future. That is precisely what the MOD is doing by way of a plan. To put that into context, £350 million is around double what is paid annually to keep on top of the problem, so there is a plan.
On funding, lest we forget, in the spending review of 2020, a full £24 billion was released by the then Chancellor and now Prime Minister to show that this Government will always get behind funding our armed forces and ensuring that they have the resources they need to be lethal, agile, expeditionary and so on.
On confidence, at the moment, frankly we do not have confidence in Pinnacle, VIVO and Amey. I am very disappointed by the performance that has been discharged so far. The hon. Gentleman asks about DIO. I do not think I am betraying any confidence in saying that some exacting questions need to be asked about precisely how this contract was entered into. Those questions have started to be asked, and I can assure him that they will go in the direction of the evidence—I make that clear. I want to get to the bottom of who knew what and when, and how this was allowed to happen.
In my hon. and learned Friend the Minister’s welcome and forthright response to this urgent question, he said that consequences would follow if satisfaction was not forthcoming. Can he explain to the House what those consequences might be, and what options the Government have to discontinue the contract and, if necessary, find alternative and better providers of service accommodation?
In the first instance, there are clauses in the contract that allow for the MOD to recoup—or, indeed, to refuse to pay out—certain sums that would otherwise accrue under the contract. In fact, from 23 January, we will be in a position to do that. We could not do it for the first six months because there is a contractual bedding-in process, but that point has now been passed, so there is, potentially, a financial remedy. As with any contract, however, if the breach has become so severe as to become a fundamental breach, other remedies may follow. My right hon. Friend will understand precisely what I mean by that. If he will forgive me, I will not go down the road of spelling out what all those remedies might be, but I can say that all options are being considered in the normal way, as he would expect.
HMS Raleigh; the Commando Training Centre Royal Marines, Lympstone; HMS Sultan; HMS Collingwood; RAF Cranwell; RAF Halton; Catterick garrison; RAF Cosford and Stonehouse barracks are just nine armed forces sites that have contacted me about problems with hot water and heating. Many of those sites deal with initial basic training. What message does it send to young people and potential recruits if we cannot provide the basics of heating and hot water?
The right hon. Gentleman is absolutely right: that is not good enough. When we get into the details on the specific numbers of properties that have been left without heating and hot water, if there is the thinnest of silver linings, it is that the majority—indeed, the large majority—have experienced that for less than 24 hours. In other words, the overwhelming majority are fixed during that period. But it should not happen at all. It is a fact of life that sometimes boilers break, and we accept that. It is no doubt the case that elsewhere—in civvy street, so to speak—some suppliers are having difficulties fixing them within a reasonable period because demand has spiked. But the central is point is that there was a contract, which had specific requirements, and grown-up, experienced contractors entered into it knowing fine well whether they had the resources to meet them. They should have taken account of the fact that, just perhaps, it might get a bit snowy in winter. It seems that that did not happen. That is why we are particularly indignant and frustrated about it, and we will take every proper and legal step to hold them to account.
Like many on both sides of this Chamber, I have had the privilege of spending time with the armed forces parliamentary scheme, where we meet service personnel and, on many occasions, their families. I am always interested to hear about families’ experience and the expectation of being the partner of one of our service personnel. For retention and for so many other reasons, it is absolutely crucial that we sort this out. I know that the Minister knows that, so how long will he give Pinnacle to pull its socks up or make significant change?
My hon. Friend is absolutely right. She has experienced, through her own mailbag, the impact on the families of service personnel. I have experienced that myself in Cheltenham. The answer is that we are absolutely clear that that needs to improve. She asks about timelines. From 23 January, if things have not improved, potential financial consequences can follow. Act 1, scene 1 is for Pinnacle to make progress now. I am talking about right now—indeed, the hon. Member for Barnsley Central (Dan Jarvis) was talking about today. I am receiving daily dashboards about what the situation is and what proportion has been left without heating for more than 24 hours and so on, and I have made it clear that I want to see improvements every single day.
When service personnel in service families accommodation are away, their spouse has to take charge of property maintenance. I recall my wife spending hours on the phone to the then contractor, Modern Housing Solutions, waiting in the queue on the phone in the hope that, eventually, the circuitous jingle would come to an end and she would be met with a human voice. Last year, 16,250 armed forces personnel left the armed forces—the largest number since 2016. What account did the Government take of retention of service personnel when they awarded the contract to Pinnacle Group in April?
Issues of recruitment and retention are, of course, broad-based and multifactorial. All sorts of issues go into determining levels of recruitment and retention, but the hon. Gentleman raises a fair point. I would hope and expect that, at the time of entering into the contract, it was made crystal clear that Pinnacle had to deliver on it, because otherwise the implications for service families—not just the individual serviceman or woman, but their families—would be deeply profound. It has not measured up to that, and I think we need to establish in very short order what it said, when it said it and whether it was being entirely up front about what it could deliver.
The Public Accounts Committee has issued two reports on this—one in 2016 and one in 2021—and there is also, of course, the excellent report by the right hon. Member for Rayleigh and Wickford (Mr Francois), which highlighted the same issues. Yet another contract was let earlier this year with the same problems. There is a rottenness at the core of the MOD’s ability to contract to deliver on this service, and worryingly, it also delivers on major warships, armoured vehicles and so on. What is the Minister going to do to make sure that there is a real difference? Financial penalties do not deliver better heating systems. Will he undertake a root-and-branch review of how the Ministry of Defence contracts for these services, and will he listen to some of the recommendations made in recent reports?
There are two issues here. First, there is the issue of the overall quality of the stock. I have spoken about the fact that that does need to improve. In fact, the £350 million to which I referred is principally directed at the 20% of accommodation that requires the most support. As I have indicated, 96% of all service family accommodation meets the decent homes standard, but we need to make sure that that £350 million goes where it is needed and has the maximum impact.
Secondly, the hon. Lady asks a fair question about ensuring that these contracts are properly entered into in the first place, and it is one that I am keen to get to the bottom of. DIO needs to ensure that it does everything possible to do its due diligence on contracts and make sure that, ultimately, we all end up with something that will deliver. That is absolutely what I am focused on.
Halifax is home to many armed forces families and has a long association with the Duke of Wellington’s Regiment in particular, but service families have made more than 9,000 complaints about the state of their service accommodation since the start of last year, largely relating to maintenance concerns. The Minister has been candid about the failings he has found, so what are the consequences for those contractors where he finds such failure in meeting those service standards?
I am grateful to the hon. Lady for raising the situation in her constituency. Built within the contract is an understanding that should contractors fail to meet what is known as ALP—acceptable levels of performance —consequences can follow. Under normal English law, if there is a repudiatory breach, that can lead to consequences in the normal way, but built within the contract is also potentially a financial penalty. Respectfully, I disagree with those who say that cannot be significant; it can be extremely significant and damaging for the company. As I said before, this is not any old contract; this is a contract to provide accommodation for some of the best people in our country who answer the call. The contractors should have done better; they will do better, or they will face the consequences.
I thank the Minister for his strong response to the question. Understandably, many families are deeply concerned by the lack of action to tackle black mould in these homes and the serious effect it could have on their children’s health. What assurances can the Minister offer military families with children that they will not have to live in these dangerous conditions?
The hon. Lady is absolutely right. The position is that if mould is found in a property before a service family is due to enter it, they will not or should not enter it. One of the things that, as I indicated, I am moderately encouraged by is that whereas in July, for the more than 1,000 families due to enter, some 4% of properties were discovered to have a non-habitable failure—which could be mould—by the time we got to the early part of December, that had gone down to 0.6%. That is the first thing: if mould is found, service families should not enter. If mould is found when they are already there, there is now a dedicated helpline they can call, which should lead to a surveyor coming to conduct a survey. If the work can be done, great. If not, and they need to move into alternative accommodation, that will be provided.
After the death of Awaab Ishak, the Secretary of State for Levelling Up, Housing and Communities said that it should never have happened and that it was a basic responsibility of the local authority or housing association to make sure that people are living in decent homes. There have been thousands of complaints since 2021 over problems of mould and leaking ceilings in the homes of service personnel. The Minister is a decent man, but we are hearing a lot of excuses about contractors today. Should the Secretary of State for Defence not accept the same basic responsibility that the right hon. Member for Surrey Heath (Michael Gove) seeks to impose on local authorities and housing associations?
I agree with the hon. Gentleman that more needs to be done in respect of mould. One encouraging thing is that there is now a dedicated hotline for people to report it, which did not exist before. They are reporting not just into an empty room, but to people who will ensure that a professional survey and remedial action are undertaken. He makes a wider point about more general responsibility. I am pleased to say that DIO has set up an improvement team of 30 people—made up of operations specialists, IT specialists and more—to ensure that the MOD will do everything it can to ensure that Amey, VIVO and Pinnacle have nowhere to hide by blaming other people. Ultimately, we will have the inquest in due course, but right now we need to ensure that these problems are being solved, and we will do everything in our power to solve them and to support people.
This is an extremely important issue, and I place on record my thanks to my hon. Friend the Member for Barnsley Central (Dan Jarvis) for securing this urgent question. I was lucky enough last year to complete the Royal Air Force segment of the armed forces parliamentary scheme, and I visited several bases in the UK and abroad and saw the standard of accommodation that some service families have to live in, and it is simply not acceptable. I take this opportunity to thank Wing Commander Smith for facilitating that. Will the Minister give the House a precise figure for service family properties that have cases of mould and damp?
I will write to the hon. Gentleman with a precise number, but the central point is this: any member of the armed forces, be they in the RAF—I am delighted he went on the armed forces parliamentary scheme—the Navy or the Army, should, if they discover mould in their service family accommodation, call the national hotline, and that should trigger the remedial action that I have indicated, with a surveyor going in. If the issue cannot be sorted within a reasonable period of time, they should then be re-accommodated. He raises a fundamental point. We ask an awful lot of our armed services personnel, particularly over Christmas, for the reasons we discussed earlier. This issue has to be sorted out, whether it is mould or anything else. We are absolutely determined, every single day, to do everything we can to fix it.
I thank the Minister for his firm and helpful response to the urgent question. I have an Army base just a couple of miles from my constituency, and I believe it can be of use to help people, whether that is temporary accommodation or a complete refit for affordable housing. To see these sites lying vacant seems so wrong when there is so much need. Will the Minister outline what discussions have taken place referencing accommodation in Northern Ireland so that vacant properties are not left to fall into even deeper disrepair?
The hon. Gentleman raises an important point. It is not just Northern Ireland; other people have got in touch to say, “There seems to be this vacant accommodation.” There is a lot of movement around the country, as he will appreciate, and the MOD needs to keep significant headroom in available accommodation. The central point is that that should not be a mechanism by which properties can fall into disrepair. He makes precisely that point, and that is why the £350 million over and above the annual maintenance cost is so important. If that can be, as I am assured it will be, directed at that 20% of accommodation in the greatest need, that will ensure that when that accommodation is required, it will be fit for purpose for service personnel, who deserve high standards.
With permission, Mr Deputy Speaker, I would like to make a statement on Ukraine. I am grateful for the leeway that Mr Speaker has given me for a slightly longer statement than normal; I thought it important to give as much information as possible to the House at the close of this year.
Today marks the 300th day of what was supposed to be a three-day operation by Russia. As this calendar year draws to a close, I want to update the House on the illegal, unprovoked invasion of Ukraine by Russia and the brave defence of the Ukrainian people. Since it began its offensive on 24 February, Russia has failed to achieve its strategic objectives. Not one single senior operational commander in place on 24 February is in charge now. Russia has lost significant numbers of generals and commanding officers. Rumours of General Gerasimov’s dismissal persist, as Putin deflects responsibility for continued military failure in Ukraine, high fatality rates and increasing public dissatisfaction with mobilisation.
More than 100,000 Russians are dead, injured or have deserted. Russian capability has been severely hampered by the destruction of more than 4,500 armoured and protected vehicles, as well as more than 140 helicopters and fixed-wing aircraft, and hundreds of other artillery pieces.
The Russian battalion tactical group concept—for a decade the pride of its military doctrine—has not stood up to Ukrainian resistance. Russia’s deployed land forces’ combat effectiveness has dropped by more than 50%. The Russian air force is conducting tens of missions a day, as opposed to 300 a day back in March. Russia’s much-vaunted Black sea fleet is little more than a coastal defence flotilla.