Wednesday 10 May 2023
[Judith Cummins in the Chair]
Rail Infrastructure: Wales
I beg to move,
That this House has considered railway infrastructure in Wales.
It is always a pleasure to serve under your chairmanship, Mrs Cummins, and an honour to chair the all-party parliamentary group for rail in Wales. My hon. Friend the Member for Ogmore (Chris Elmore) is the previous chair, and I am trying my best to maintain his high standards.
My passion for trains and everything to do with railways began when I was a young child of about three. I was born and brought up in a small village in south Wales called Kenfig Hill. My grandmother, whom we called Mam, lived in nearby Porthcawl, which is a seaside town with lovely beaches and a funfair—every child’s dream. We did not have a car, so my mother tried many times to take me on a bus to Porthcawl to see Mam, but I suffered, and still suffer, from travel sickness. We sat at the front of the bus and managed to travel only a short distance before the driver, who knew me well, would see me turning a terrible shade of green and have to stop to allow me to make a quick exit so as to be sick at the side of the road. However, a train ran from the adjacent village, Pyle, to Porthcawl, so my mother tried it. I was fine—no sickness—and I loved the journey.
However, when I was a teenager, along came Beeching, who closed the rail link from Pyle to Porthcawl. Infrastructure has been removed, but I have a dream that one day the freight line that runs from Neath town to Onllwyn at the top of the Dulais valley in my constituency will be converted and once more be a passenger line. Many of the original stations are still there, the freight line gauge is compatible with passenger trains and a global centre of rail excellence is being developed in Onllwyn. I will say more about the global centre later.
Members should think about the benefits of such a scheme. For example, people could take the train to work, and tourists could experience the beauty of the countryside in my constituency while riding on a train. Just before the pandemic struck, Neath Port Talbot Council leased a passenger train to drive up the freight line and test it out. Alas, the test never happened.
A famous local historian lived in Onllwyn. His name was George Brinley Evans, and we all called him Uncle George. Sadly, he passed away last year aged 96. I met Uncle George when I became Member of Parliament for Neath, and he was as passionate about trains as I am. Uncle George lent me many books about trains and railways, and he told me many stories about the rail infrastructure that existed in his time. His dream was to reopen the passenger line from Swansea to Brecon and across the borders. Maybe one day, Uncle George, we will achieve that.
There is one drawback to my love of trains, as some Members here today might know: I am a travel jinx. People who find that out then go out of their way not to travel with me. I could tell the House many stories about my innate ability, over which I have no control, to cause car, train, boat and plane journeys to go horribly wrong. I will tell just one today.
A few years ago, we held a joint event in Pontypridd with the then Welsh Government Cabinet Secretary for Economy and Infrastructure, my friend Ken Skates MS, who represents Clwyd South, and the then shadow Secretary of State for Transport, my hon. Friend the Member for Middlesbrough (Andy McDonald). After a successful event, we caught the train from Pontypridd to Cardiff. So far, so good. Then the shadow Secretary of State and I caught the train from Cardiff Central to Paddington. We got to the next stop, Newport, but the train was paused for longer than usual. We waited patiently until an announcement was made that there was a cow on the line between Newport and the Severn tunnel, so we would be bussed to Bristol Parkway.
The train was packed, and it took a long time for us to get off and make our way to the front of Newport station, where we queued for buses. We managed to get the front seats on top of a double-decker, and I prayed that I would not be sick and embarrass myself in front of the shadow.
We arrived at Bristol Parkway, only to be told that there was serious flooding on the line between Bristol and Swindon, so we would be put on a train from Parkway to Temple Meads and hopefully be able to get the cross-country train to Paddington. The journey was exhausting and stressful and took six hours instead of one hour and 50 minutes. While we were waiting in Bristol Parkway, we found a plaque on the platform about the then Secretary of State for Transport, the right hon. Member for Epsom and Ewell (Chris Grayling), opening the new platform; I still have the selfie that we took in front of the plaque. Needless to say, my hon. Friend the Member for Middlesbrough has not travelled with me since.
Setting aside my dysfunctional relationship with public transport, it is important to recognise that railways have played a crucial role in the development of the UK and Wales, connecting remote communities and facilitating trade and travel. However, despite that rich history, the railway infrastructure in Wales has faced its fair share of challenges in recent years. Today I will discuss the state of the railway infrastructure in Wales, the challenges it faces and the opportunities for improvement.
The railway network in Wales is made up of about 1,600 miles of track connecting cities, towns and villages across the country. It is a vital part of the transport infrastructure, providing a safe and efficient means of travel for both passengers and goods. However, the infrastructure is ageing and there are concerns about its safety and reliability.
One of the main challenges facing the railway infrastructure in Wales is the lack of investment. Although some improvements have been made in recent years, such as the electrification of the south Wales main line, there is still a significant funding gap in the infrastructure’s maintenance and modernisation. That is particularly concerning given the network’s age, with many of the tracks, stations and signalling systems in need of repair and replacement.
On the electrification of the south Wales main line, my hon. Friend will know that David Cameron promised that the electrification would reach Swansea, but it ends at Cardiff. Does she think that that is a half-done job?
I thank my hon. Friend for his really important intervention. He has been a champion for the cause of electrifying the line between Cardiff and Swansea. There is also the air quality aspect; I believe he is still the chair of the all-party parliamentary group on air pollution. He will remember our visit to Vortex, a really important small business in my constituency that develops futuristic air testing quality equipment that looks like a black motorbike helmet, which gets put at the side of the road. I thank my hon. Friend very much for coming to Neath and for his intervention.
Another challenge is the fragmented nature of the rail industry in Wales. The network is owned by the UK Government via Network Rail, but the train operating companies such as Transport for Wales Rail are responsible for running the services. That can lead to a lack of co-ordination and accountability, with different companies prioritising different aspects of the network.
Additionally, the railway infrastructure in Wales faces challenges relating to the country’s geography. Wales is a hilly and mountainous country, which presents difficulties in building and maintaining railway infrastructure. The terrain can make it arduous and costly to lay new track, maintain existing infrastructure and provide reliable services in areas with limited access. Despite those challenges, there are opportunities for improvement in the railway infrastructure in Wales.
The Welsh Labour Government have recognised the importance of the railway network and have made significant investments in recent years. One such investment is the south Wales metro, which is an integrated transport network that aims to improve connectivity across south Wales. The project includes electrification of the valleys lines, new rolling stock and the development of new stations and transport hubs. The metro will also incorporate other forms of transport such as buses and bicycles, making it a more sustainable and integrated transport system. A similar plan is being worked on to develop a Swansea bay metro.
The Welsh Government have also committed to developing new railway connections, such as the proposed north Wales main line upgrade. The aim of that project is to improve the connection between north Wales and the rest of the UK by upgrading the railway line between Holyhead and Crewe. It would improve journey times and increase capacity, making it easier for people to travel to and from north Wales.
Finally, we must applaud the Welsh Government for leading on the global centre of rail excellence, which is being built in my Neath constituency. It will become the UK’s first net zero rail testing facility and will have a shared campus for rail innovation, research and development. It will be used for the testing and verification of mainline passenger and freight railways, and the development of next-generation solutions for the rail sector. The site will centre on two state-of-the-art loops of test track: one of about 7 km and a smaller one of about 4 km. The Welsh Government have committed £50 million, the UK Government have committed £20 million, and a further £7.4 million is being provided through an Innovate UK R&D competition.
What needs to be done to ensure that the railway infrastructure in Wales is fit for purpose in the years ahead? First, we need continued investment in the maintenance and modernisation of the network. That will require funding from the Welsh Government, the UK Government and the private sector. That investment must be strategic and focused on the most pressing issues, such as the ageing infrastructure and the lack of connectivity in some areas. There are avenues for a substantial increase in investment if changes are made at a UK level to how funding for investment is allocated. I will say more about that shortly.
In addition, investment must focus on people. Rail infrastructure without people is just bits of metal running on other bits of metal. With that in mind, we must consider accessibility for all rail network users. It is brilliant that Transport for Wales’s new Stadler FLIRTs—fast light innovative regional trains—are low-floored with retractable gap fillers that will enable level boarding. That is transformative for disabled people and will allow independent travel at some stations. However, level boarding requires both low-floored trains and infrastructure modifications to set platforms to the UK standard, so will the UK Government commit to investing in a rolling programme to achieve that in Wales and across the UK?
Transport for Wales’s new class 197 trains are not low-floored with retractable gap fillers like the new Stadlers, so they will not enable level boarding. Regrettably, that will bolt in inaccessibility for decades. Why were those trains ordered, rather than trains that enable level boarding?
A recent Leonard Cheshire report claims that 40% of train stations remain inaccessible. The Access for All funding is inadequate and, according to the UK Government’s own statistics, at the current rate of investment it will take 100 years for stations to be accessible and have step-free access to platforms.
Secondly, we need to address the fragmentation in the rail industry in Wales. That could involve greater collaboration among the companies involved in running the network, or even devolution of all Welsh railway funding. That would ensure greater accountability and co-ordination, leading to a more efficient and effective network. We need to remember that the Wales route has about 10% of the UK rail network. It has historically received about 1% to 2% of rail enhancement investment, and has attracted about 5% to 6% of operations, maintenance and renewal investment. It typically has higher subsidies per passenger mile than elsewhere in the UK.
The Welsh Government are responsible for the subsidy for the majority of rail operations in Wales, but not for the funding or decisions related to enhancement and OMR expenditure. The more limited investment by the UK Government, compared with the rest of the UK, on enhancements and OMR has, in effect, handed an operational liability to the Welsh Government. That is a grossly inefficient means of organising strategic decision making and the funding of vital economic infrastructure.
Thirdly, we need to continue to make the most of the opportunities presented to us for investment in railway infrastructure in Wales. That brings me to the key issue of HS2 and what it means for Wales. Currently, HS2 is classed as an England and Wales project, despite not a single foot of track having been laid in Wales. That means that unlike Scotland and Northern Ireland, Wales will not receive a penny in funding as a result of Barnett consequentials. Had HS2 been classified as the England-only project that it clearly is, Wales would have received an additional £5 billion of funding, which could be used as vital investment in its railway infrastructure. The argument could go further: we could see HS2 as a disbenefit to Wales.
A recent noteworthy development is that at Old Oak Common. Why is OOC an issue worth debating when we talk about Welsh infrastructure investment, or rather the lack of it? With the delay in building Euston, OOC has now become the London terminus of HS2. It is not yet clear whether Euston will ever be built. The overspend on HS2 is eye-watering and any semblance of a business plan has disappeared with the ongoing contraction of the new railway, along with the promise of wider benefits long into the future for the rest of the UK.
Very little of that wider benefit would have been for Wales. There might have been some intangible benefits for north Wales, but there are absolutely no benefits for the rest of Wales and certainly none along the south Wales main line. The general consensus is that HS2 will negatively impact Wales, as a new high-speed line between OOC—I will not call it London—and Birmingham has nothing to offer Wales except extended journey times to Paddington.
We now have OOC being touted as a new destination in its own right, with the expectation that significant investment will accrue around the new station. “Build it and they will come” seems to be the mantra. The same is now being said for the HS2 terminus at Curzon Street in Birmingham, which will supposedly become a new city centre, as investment follows the new station. That is two major builds at two stations that are not in the city centre. No connecting services will be available at Curzon Street, and Birmingham New Street will be half a mile away. There is no clarity yet on how connecting passengers will move from one to the other, so any time savings are already being eaten into.
At OOC it is all about connecting to the Elizabeth line, but passengers from Wales will be able to do that anyway at Paddington, and in less time. More importantly, there is a direct disbenefit to Wales as a result of the development of OOC. The plan from the Department for Transport and the industry is for all trains to call at OOC. Indeed, that is part of the HS2 business case, particularly now that OOC is to be the southern terminus of HS2.
That will add about five minutes to every journey into Wales. The relatively recent electrification programme on the route—itself curtailed at Cardiff to save money—had, as part of its business case, a 15-minute journey time reduction between Paddington and Wales. Long-distance intercity trains from Wales, be they Great Western Railway or Grand Union, will be negatively impacted by five minutes by the need to call at OOC, so the initial business case for electrifying the south Wales main line is now undermined. In particular, I see no way any passenger for south Wales would choose a journey from Birmingham via OOC. That is one thing that the rail industry does agree on.
I congratulate my hon. Friend on her excellent speech, and in particular commend what she says about the disbenefits of HS2, which is clearly a scandal. The project shows a total disregard for the devolution settlement, and it is a disgrace that it is not classified as an England-only project. If the Minister will not listen to Opposition Members, will he consider listening to members of his own party, including members of the Welsh Affairs Committee, which produced a report on rail infrastructure that states that
“HS2 should be reclassified as an England only project”?
Only last month, all Members of the Welsh Senedd, including members of the Minister’s party, unanimously passed a motion calling on the UK Government to redesignate HS2 an England-only project, and to provide Wales with the resultant consequentials. That is the right thing to do. It gets worse, because Northern Powerhouse Rail will also be classified as an England and Wales project, despite the fact that none of the track will be in Wales. Does my hon. Friend agree?
I thank my hon. Friend for her ongoing support; it means a lot to me. I am sure the Minister has heard the points she made, which I totally agree with, and will answer them. I thank her for her sterling work on the Welsh Affairs Committee, and I also thank my hon. Friend the Member for Swansea West (Geraint Davies) for his work on that Committee.
Not only does HS2 lengthen journey times on the south Wales main line, when the initial electrification investment aimed to reduce journey times, but it is all done for the benefit of an HS2 business case that no longer works, and there is nothing but disbenefit to Wales. Under the levelling-up agenda, it would not be unreasonable to extend electrification at least to Swansea, and/or make available other investment for Wales. That would help us to recover some of the five minutes lost by trains calling at OOC, and would be a fraction of the cost of the overspend on HS2. It would also mean that Wales would, for the first time, benefit from HS2, even if in a roundabout way.
Investment in Wales is now much harder to get, due to significant budgetary cuts, but investment in HS2 continues, with the business plan forever changing to fit the emerging and ever changing HS2 railway. There is no possibility that current HS2 plans would ever have been deemed acceptable in a business case review; they would never have seen the light of day. Wales suffers while billions continue to be swallowed up by a project that no longer works, when a relatively modest investment would allow Wales to at least share some of the supposed benefits of HS2.
Does the Minister agree that investment in Wales’s rail infrastructure is important both to our collective decarbonisation obligations and to the need to support economic development across all parts of the UK? On that basis, will he acknowledge the detailed work of Transport for Wales and its metro development teams over the last two years, and support the substantive rail enhancement plans that they have set out for Wales, and services over the border that impact on Welsh rail services, which will help us to meet those objectives? Primarily, we need the UK Government to commit to funding and supporting the delivery of a range of rail enhancement schemes up to 2030. That includes the upgrade of the south Wales main line, as highlighted in the recent Western Gateway 2050 rail vision.
My hon. Friend is chair of the APPG for the Western Gateway, which is why she is cheering. The upgrade of the south Wales main line should include the new Burns stations in south-east Wales, Cardiff Parkway and the electrification of the Swansea and Vale of Glamorgan lines—and of Filton Bank to Bristol Temple Meads. The enhancement schemes should also include the upgrade of the Borderlands line to connect Wrexham and north-east Wales to Liverpool and Merseyside, using Merseyrail’s new battery-powered Stadler 777s; capacity enhancements at Chester and on the north Wales main line; a first phase of Swansea bay metro to help to deliver an economic boost to the region; and immediate action, including development funding via Network Rail this year, to help to address network capacity issues at Cardiff West junction. Resolution of those issues would improve the operational capacity and efficiency of the entire core valley lines network—a requirement that was omitted from Network Rail and the Department for Transport’s Cardiff area signalling renewal project in 2012 to 2015. That enhancement could be most efficiently combined with planned Network Rail renewal works.
Thank you for your patience, Mrs Cummins. I will finish with some good news—I always try to end on a happy note. This morning the global centre of rail excellence announced that it has signed heads of terms for Transport for Wales to become a major commercial premium client. That secures a long-term partnership for Transport for Wales, so that it can use all the world-class facilities at the global centre of rail excellence. The announcement follows the recent deal with Hitachi, which will also be using the premium-quality testing, product approval, training, innovation, research and development and storage facilities at the global centre of rail excellence. Those agreements indicate the global centre’s commercial strength, and are great news for Neath, Wales and the UK.
It is a delight to serve under your chairship, Mrs Cummins. I congratulate my hon. Friend the Member for Neath (Christina Rees) on securing this important debate on rail infrastructure in Wales. Like her, I am a keen speaker on rail issues in this House, because they are so important for my constituency. I am pleased to be a vice-chair of the APPG for rail in Wales, which my hon. Friend chairs with great enthusiasm.
I look forward to seeing the global centre of rail excellence up and running in my hon. Friend’s constituency in 2025. The expertise of CAF, a Spanish-owned train manufacturer in Newport East, will feed into the work of the centre. Will the Minister look at that company’s work in manufacturing trains and trams? It is an excellent company that builds great trains in my constituency. Our Welsh Labour Government deserve huge credit for co-ordinating and financing, alongside private sector partners, this very exciting project in my hon. Friend’s constituency.
I share my hon. Friend’s frustrations with the UK Tory Government’s chronic underfunding of our rail network. It is important to note that, as she says, much of Welsh rail infrastructure is not devolved. The buck stops with the UK Government, and Tory mismanagement has deliberately held back fair rail funding for Wales. It is often mentioned but worth repeating that Wales accounts for a significant 11% of the route network in England and Wales combined, but receives just 1.6% of rail enhancement funding. A conservative estimate of the underfunding of Welsh railways by 2029 is £2.4 billion, but it could be as high as £5.1 billion. That is shocking. Welsh taxpayers and rail passengers have been totally short-changed by this Government, who have wilfully had their eye off the ball when it comes to Wales.
We have seen the same with HS2, as my hon. Friend said very well. The HS2 project is wholly in England and will provide little benefit, if any, to any area of Wales. Indeed, by the UK Government’s own reckoning, HS2 is likely to cause economic detriment to areas of south Wales. Like my hon. Friend—and others, I am sure—I would be grateful if the Minister spelled out once and for all why HS2 continues to be classed as an England and Wales project, which deprives Wales of consequential funding through the Barnett formula. As my hon. Friends the Members for Neath and for Cynon Valley (Beth Winter) have said, it is not just Labour Members who are querying that discrepancy. The Minister will be aware of the Welsh Affairs Committee’s report on Welsh rail, overseen by the right hon. Member for Preseli Pembrokeshire (Stephen Crabb), which states:
“Using the Barnett formula, Wales’ funding settlement should be recalculated to apply an additional allocation based on the funding for HS2 in England.”
The Committee suggested that such a reclassification
“would help to ensure that Welsh rail passengers receive the same advantage from investment in HS2 as those in Scotland and Northern Ireland.”
It would be interesting to know which part of that the Minister disagrees with.
On the theme of deliberate political choices, it is worth emphasising that the Department for Transport continues to restrict the Welsh Government and Transport for Wales from providing additional cross-border services under the terms of the Wales and Borders franchise. Extra services between south-east Wales and south-west England would help to alleviate some of the pressure for my constituents, particularly those who commute between Newport, Severn Tunnel Junction and Bristol Temple Meads on services with a history of severe overcrowding. When I have flagged this issue with previous Rail Ministers, they have brushed it under the carpet. I do not understand why extra services cannot happen, so I would be grateful if the Minister explained.
I am a big supporter of the campaign for a new railway station—a walkway station—for Magor in my constituency. The campaign was spearheaded by the brilliant volunteers at the Magor action group on rail, which recently celebrated its 10th anniversary and will visit Parliament again later this month. The fast-growing villages of Magor and Undy in my constituency have been without a station since the Beeching cuts of the ’60s, and there is huge local support for a station in the area to support commuters travelling west to Newport and Cardiff, and east to Bristol. A new station for Magor would help to reduce congestion on local roads and relieve pressure on Severn Tunnel Junction in Rogiet, which has experienced an estimated 300% increase in station entries and exits over the past two decades.
The campaign for a new station for Magor is supported by Monmouthshire County Council and the Welsh Government, who have included it in plans for the South Wales Metro, as one of six new stations between Cardiff and Severn Tunnel Junction, alongside new stations in Somerton and Llanwern in Newport East. The Burns review, produced by the South East Wales Transport Commission, recommended these new stations, and the Burns delivery unit’s annual report sets out a timetable for the delivery of the stations by 2029. The new stations were also endorsed by the UK Government’s Union connectivity review as a means of improving cross-border transport links, and have the full backing of the Western Gateway regional partnership.
The Western Gateway 2050 rail vision document, mentioned by my hon. Friend the Member for Neath, had its formal launch in Bristol earlier this year and highlighted that the new stations are eminently deliverable; related schemes and business cases are already in planning. The stations could have transformative benefits for the communities they serve, while helping to unlock the huge economic potential of the wider region. It is important to note that the rail vision document was endorsed by train operating companies including Great Western Railway, Transport for Wales and CrossCountry, as well as my neighbour, the Secretary of State for Wales, who welcomed the “ambition” of the report and acknowledged:
“Connectivity within South Wales and South West England is vital to growing our regional economy.”
Another issue that my hon. Friend the Member for Neath raised was an upgrade to the relief lines in south Wales, which is badly needed, and is an important enabling investment for the proposed new stations. The Department for Transport has yet to make funding available to Network Rail for that work. I am sure that there will be frustration about this in the Wales Office, too. In 2020, the Secretary of State outlined his support for an upgrade in his regular column for the Abergavenny Chronicle and the Monmouthshire Beacon. If he and his colleagues in the Wales Office want to join me and Labour Members in lobbying his Government colleagues on this, I would be grateful to have them on board. We need that upgrade to happen, and that funding to come forward.
I asked about the south Wales relief lines in Transport questions last month and the Secretary of State told me that the upgrade was
“being progressed to a full business case”—[Official Report, 20 April 2023; Vol. 731, c. 347.]
and will be subject to “careful consideration” by the Department. If the Minister could give us an update today, it would be appreciated, because the upgrade unlocks lots of other things.
Like my hon. Friend the Member for Neath, I will finish on some good news. I am reliably informed that, from a week on Monday, an additional 65 new GWR services will run between London, Newport and Carmarthen each week on nice green, quick trains. That is a good thing that we should focus on. I am grateful for the opportunity to speak in the debate, and I will listen to the Minister’s response with great interest. These are issues that Labour has raised for many years, and railway infrastructure in Wales has been neglected for too long by this Government. If they will not take action to address the legacy of neglect, a future Labour Government will be happy to step in. Passengers in Newport East and all of Wales deserve better than they have had over the past 13 years.
It is great to serve under your chairpersonship, Mrs Cummins, and a big congratulations to the hon. Member for Neath (Christina Rees). If, in the aftermath of the King’s coronation, the Government are serious about the Union, they should stop starving Wales of its resources and making it relatively poorer, year after year. The average wage in Wales is 72.7% of the UK level; it was £21,000 in 2020, according to the Office for National Statistics. By comparison, in Scotland, the average wage is 92% of the UK level, or £26,572. The driving force behind that is the fact that over the past 20 years, Scotland has had 8% of rail infrastructure investment and Wales has had 1.5%.
As my hon. Friends have pointed out, the Tory Government have decided to classify HS2 as applying to England and Wales, even though it does not go through Wales at all. In fact, while it will reduce journey times from London to Manchester from 2 hours and 10 minutes to 1 hour and 10 minutes, the journey time from London to Swansea will remain at 3 hours. We will therefore see a distribution of investment and jobs out of Wales. Despite that, we will not get a penny piece from HS2. Scotland will get an 8% investment, or £8 billion, in line with its population figures. Wales is being robbed of £5 billion, which works out at £3,700 per household.
At a time when the poorest nation in the Union is on its back, and receives 73% of average wages, we are to get even less. That is completely unacceptable and disgraceful. That is why the all-party Welsh Affairs Committee, on which I serve, unanimously agreed that HS2 would not make up for the history of starvation that we have suffered under the Tories, and indeed before this Government, but we thought that at least we would get our fair share in the future. The Committee unanimously agreed that the project should be classified as England only, so we would get our Barnett consequentials, as Northern Ireland and Scotland do. As was pointed out by my hon. Friend the Member for Cynon Valley (Beth Winter), the Senedd unanimously—the Tories, Plaid and Labour—agreed that we should get our fair share. I have had meetings with Professor Mark Berry and the Minister who, to be fair, has been friendly and accommodating in those meetings, but the bottom line is that he needs to persuade the Government to provide the resources that we need to build a stronger, fairer and greener Union, in which Wales gets its fair share.
Even ignoring the rail situation, Scotland earns much more per head than Wales, yet it gets a higher Barnett consequential. For every £1.20 spent in Wales, £1.26 is spent in Scotland. That is not right; we need our fair share.
We talk about Wales and Scotland, and on occasion people say we are putting out a begging bowl. We have to bear in mind that London gets the highest regional funding per head through the equivalent of the Barnett formula for England. That needs to be reiterated. If that level of transport funding is good enough for London, why is it not good enough for Wales?
Precisely. The money is poured into London, which already has the wealth and the best transport system. There is an idea that there will be some sort of trickle down. In transport generally, the only place we have publicly owned transport that works is London; elsewhere, it is a complete mess because it is not controlled in the interests of the public.
Investment is the core issue I am focusing on, and we are completely starved of the resources we need. The Minister knows that Transport for Wales has worked up £2.5 billion-worth of projects that can be delivered over the next 10 to 15 years. That is half the consequential funding it deserves. I have spoken about this before, and perhaps the Minister will mention it when he responds to the debate. I hope that his officials in the Department for Transport are engaging with Transport for Wales to get some of those projects up and running.
Some projects have been mentioned already, including the Swansea metro and connectivity in south Wales. The reality is that 3 million people live in Swansea, Cardiff and Bristol. That economic and population cluster should be connected up, but connections between Swansea and Bristol run about once an hour, while connections between Leeds and Manchester—an equivalent area—run about eight times an hour. To rub salt in the wounds of Wales, we have just been reminded that the Government have decided to classify Northern Powerhouse Rail as an England and Wales project, so more money will go into that project instead of to Wales; we will get nothing. We also need more connectivity between Holyhead and Crewe. There are plans for a freeport, and at the moment the strategy is that everything is going to be sucked out of Wales and into Liverpool.
We should all share a vision of a stronger, fairer, greener future for all the United Kingdom, but in particular for Wales, where we have the opportunity to build renewables and green energy. We know that freight, for example, is going to grow by 30% by 2035. The Government should be investing in Wales rather than putting us down and not letting us achieve our true potential.
On the point of a green future, we are facing a climate crisis. My office in south Wales has been doing some work on the development of an integrated transport system in Wales. If Wales had what I regard as its entitlement—£5 billion in consequentials, because HS2 is an England-only project—that would fund the Wales and Swansea Bay metros and the integration of the north Wales line with Merseyside, and allow us to connect Aberystwyth and Swansea by train. Does my hon. Friend agree that the UK Government have a duty to properly fund public transport so that we can address the existential crisis facing our planet?
Precisely. The Welsh Government, in their wisdom, have quite rightly decided that we need to shift our focus from personal car use and diesel to public transport and rail. However, they are not being accommodated by the UK Government, who give us the money we need to provide infrastructure that enables people to move around more modestly, and to work from home and so on, in order to save the planet and build the economy.
We will face an election next year, and there is a question about what, precisely, the Labour Government are going to do about this. My hon. Friend the Member for Slough (Mr Dhesi) will respond to that, but I will make a point about the numbers. If we had half the money that we require—£2.5 billion of the £5 billion—the schemes that have already been worked up by Transport for Wales could be delivered in 10 to 15 years. That represents 5% of the 5% share that Wales should get from the £28 billion that the Labour party is promising each year in green investment.
I hope that my hon. Friend will respond to that point, but what I am saying is that the Labour party has already put forward a plan for green investment that can easily accommodate our needs in terms of rail. What is the Minister doing about it? I fear that he is not doing anything. It is about time we had a stronger, fairer, greener future for Wales and we got the rail investment we deserve.
I call Liz Saville Roberts.
Diolch yn fawr iawn, Gadeirydd. Like so much in Wales, railways have massive potential, but—again, like so much in Wales—we need the infrastructure boost that can be provided only by a central Government equipped to put the best interests of Wales first.
We have some of the oldest railway infrastructure in the UK, which requires a high level of additional spending—frankly, it is safe to say, almost all the additional spending that we get for Wales—just to maintain its current poor quality and stay where we are. High-quality and reliable public transport is essential for boosting the economy and connecting our communities. As has already been mentioned, it is also a vital plank for the greening of our society, as investing in public transport is one of the most effective ways of reducing carbon emissions. That investment is not happening in Wales, as we are being starved of funding by the Treasury. Its current position is that billions spent on railway projects in England somehow benefit Wales. That is, of course, a fantasy of convenience for the Treasury.
It is important to reiterate, as many hon. Members have already said, that Wales is being robbed of billions of pounds of funding—£5 billion from HS2 and £1 billion from Northern Powerhouse Rail alone. We have heard that the Welsh Affairs Committee recommended in 2021 that HS2 should be reclassified as an England-only project. That would ensure that Welsh rail passengers received the same advantage for investment in HS2 as those in Scotland and Northern Ireland, who are already receiving Barnett consequentials from the project. It is a matter of equity, and we have heard convincing arguments.
The Government’s own economic analysis of HS2 shows that it will produce an economic disbenefit for Wales. In other words, it will cause an economic hit, not an economic boost. We know that Wales is losing out when it comes to HS2, yet the Labour party has still yet to commit to bringing that funding to Wales if it enters government. I hope that the shadow Minister, the hon. Member for Slough (Mr Dhesi), will make the party’s position clear and guarantee that funding will make its way to Wales in the future, which many Labour party members have already expressed desire for.
That money, which is owed to Wales, would be transformational. It could be used to improve connectivity in rural areas such as my constituency of Dwyfor Meirionnydd, where we are dependent on the Cambrian coast line and the Conwy valley line. Many of my constituents suffer from unreliable services, too often in the form of buses. I am delighted that Network Rail has undertaken structural work at Barmouth viaduct and, previously, at Pont Briwet. Those bridges recently celebrated their 150th birthdays—their century and a half. But all that work does is maintain what is already there; it does nothing to enhance it.
The Welsh Affairs Committee report also noted:
“Improving transport infrastructure within Wales must be a priority and should focus on how infrastructure initiatives can remedy deprivation, boost the Welsh economy and contribute to meeting decarbonisation targets.”
Interestingly, the Committee noted:
“Enhancements should include a focus on improving connectivity within Wales, such as more efficient rail links between North and South Wales”.
Transport for Wales figures suggest that completing the north-to-south-Wales rail route along the western seaboard from Bangor to Swansea would cost around £2 billion. Interestingly, that is a third of the £6 billion owed to Wales from what I will call the Barnett inconsequentials.
For too long, transport policy has mainly focused on improving connectivity with England, rather than within Wales itself. We could use the money that Wales is owed by the Department for Transport to begin to rectify that policy decision. As I alluded to earlier, underinvestment in railways in Wales means that our maintenance costs are higher. Wales’s share of maintenance and renewal spending is higher because much of it is necessitated by the fact that Wales’s railway infrastructure is older and in poorer condition than elsewhere. The Wales Audit Office calculated that between 2011 and 2016, the Welsh Government spent £226 million on infrastructure enhancements over and above Network Rail’s spending of £1.4 billion, most of which—I reiterate—was spent on maintenance rather than on enhancements.
Opponents of the type of high subsidies that we are requesting would use those figures to say that there is no reason to invest more in rail infrastructure in Wales.
If I can make a technical point, does the right hon. Lady accept that because the UK Government have not invested in rail enhancement, maintenance costs have risen and the productivity of the lines has fallen? We have ended up in a situation whereby the Welsh Government pay the bills by taking money from other needs, such as health, to make up for the lack of investment by the UK Government, with the net effect that there is less money and lower productivity for the poorer nation, which is disgraceful.
Yes, and we see that happening over and over again. The hon. Gentleman mentioned other service areas. I could mention the police as well, because the Welsh Government fund a number of additional police community support officers.
In effect, the people of Wales are suffering from a double whammy to maintain services in Wales, because they are paying in two instances. We are talking specifically about HS2 and the £6 billion. That money could make a measurable and significant difference to a Government dedicated to putting the interests of Wales first. It is deeply disingenuous of the UK Government to argue that Wales should be treated differently from Scotland and Northern Ireland, when treating it in the same way would make a clear difference to the rail infrastructure that we presently have, which is being maintained only to keep us in the status quo and is insufficient.
The additional subsidies that we are having to provide in Wales are a symptom of the chronic underinvestment in capital spending, which inevitably results in far higher maintenance costs. Capital spending on essential infrastructure such as railways should be seen as an investment and not as a burden; it should be a driver in addressing inequality. It should be seen as something that Wales needs as well as deserves, and of course it would reduce overall maintenance costs and provide a better service in the long term.
It is important to note that the costs of infrastructure projects in general have been driven up by a combination of covid-19-related supply chain disruptions and inflationary pressures, pushing up the costs of materials and skilled labour. The Welsh Affairs Committee recently heard of one such example in correspondence from the chief executive of Transport for Wales. He set out how the pandemic, escalating inflation and the consequences of leaving the EU have combined to push up the projected cost of the south Wales metro from £738 million to over £1 billion. These are political changes, and I would expect the Government in Westminster to take some responsibility for their role in aspects of them.
The impact of inflation on infrastructure projects in Wales must be considered in the wider context of the limited fiscal settlement within which the Welsh Government operate. Limits placed on their borrowing capacity and the clawback mechanism, which penalises them for carrying money over from one financial year to the next, combine to restrict the Welsh Government’s ability to deliver large-scale infrastructure projects.
Of course, this debate is part of a much wider discussion about how Wales’s fiscal settlement locks the economy into a damaging cycle of low productivity. However, for the purposes of today’s debate, I simply urge the UK Government to look again at the Welsh Government’s request that their borrowing capacity be increased, at the very least in line with inflation, and that consideration be given to the Welsh Government’s means of carrying money over, as Westminster can choose to do.
Does the right hon. Lady agree that, in addition, the end of EU structural funding, which has a timespan of about seven years, means that Wales is not in a position independently to invest in infrastructure over the medium to long term, and that it needs that investment and assurance, and the devolution of rail infrastructure?
Indeed. Of course, if anything requires a long-term strategy from Government, it is rail infrastructure. The short-term approach to replacing European structural funds that we have seen so far is desperately inadequate for our communities in Wales.
I am glad to hear from Labour about the constitutional arrangements for railways—I hope that that may foretell a fortunate route—but as things stand they are highly dysfunctional. The current arrangements are such that Wales has powers over the operation of trains but not over the track. That does not work; it is highly inefficient, and it has been a major barrier to developing a fully integrated public transport network across communities in Wales.
Unlike in Scotland, nearly all infrastructure planning and the funding of Network Rail in Wales is reserved to the UK Parliament, aside from in relation to certain lines, such as the core valley lines. That makes it very hard to integrate other forms of devolved public transport, such as buses and active transport, with rail.
The Wales Governance Centre calculates that for Wales there is a strong financial case for the full devolution of rail infrastructure along the lines of the Scotland model, and analysis of Network Rail enhancement spending between 2011-12 and 2019-20 indicates that Wales would have benefited from an additional £540 million of spending under a devolved system during that period. Not only would devolution be beneficial on a policy level, but Wales would be better off economically.
I urge the UK Government—again—to redesignate English rail projects such as HS2 as benefiting England only, so that Wales would receive the Barnett consequential funding we have every reason to expect. This is a matter of justice and fairness, not charity. Wales is entitled to receive the same funding for railways as elsewhere in the UK, but it is not. In the longer term, we want to tackle the climate crisis, improve productivity and enhance the wellbeing of people in Wales. Devolution with respect to rail infrastructure to achieve that is essential. Diolch yn fawr.
It is a pleasure once again to serve under your chairship, Mrs Cummins, and I congratulate my hon. Friend the Member for Neath (Christina Rees) on introducing this important debate on Welsh rail infrastructure. She is indeed passionate about rail as chair of the all-party parliamentary group for rail in Wales, and I have seen that passion for myself thanks to her active participation in and support for the all-party parliamentary group on the western rail link to Heathrow—a long overdue project that would benefit the good people of Wales as well as people in my Slough constituency and beyond.
As we witnessed the last time we debated this very issue in detail in Westminster Hall, there are strong feelings on both sides of the House, although one could not detect such feelings today owing to the fact that not one Welsh Conservative Member has come to speak in the debate. Connecting Wales within and across its borders is a matter of great importance not just for the people of Wales, but for those who visit, work and enjoy all that that great country has to offer, as my wife and I had the pleasure of doing when we went to Snowdonia in north Wales.
As my hon. Friend the Member for Newport East (Jessica Morden) eloquently explained, it is vital that rail infrastructure in Wales does not fall behind owing to underfunding and lack of attention, as is currently the case under the Conservative UK Government, particularly at a time when we need to be building up our rail capacity and ensuring that we have the greenest, most accessible and most affordable network possible.
The latest numbers indicate that passenger journeys in Wales hit 17.7 million last year, with more than 60% of those journeys occurring within Wales. However, that is a 41% decrease in passenger numbers compared with 2019-20. Ensuring that passenger numbers increase and that more people in Wales can easily travel by rail have only increased in importance post-covid, but with failing infrastructure impacting services, passengers will be increasingly likely to choose more convenient but more polluting alternatives. We must halt the backwards slide caused by the pandemic and ensure that the best possible infrastructure is in place and delivering for Welsh passengers.
The previous Labour Government ensured that there was devolution in many forms and ensured that the Welsh Government could have greater control, and the 2021 Welsh Affairs Committee report, “Railway Infrastructure in Wales”, with which the Minister is no doubt familiar, outlined clearly the connection between enhanced rail infrastructure, integrated public transport, decarbonisation and, ultimately, improved quality of life. That is clearly something that we all stand behind today. Improved rail infrastructure has the power to transform. However, poor passenger experience, due to failing infrastructure, will undoubtedly drive down passenger numbers, and all the hard work put into the network by the Welsh Labour Government will unfortunately prove futile.
As my hon. Friends the Members for Swansea West (Geraint Davies) and for Newport East both noted, the Welsh Government, along with Transport for Wales, are fulfilling their part of the deal. They have come to agreement with the unions on industrial disputes, avoiding strikes; they launched a new fleet of trains earlier this year; and they will be ensuring the roll-out of smart ticketing on the Wales and Borders network. I witnessed that recently on a trip towards Chester, when I discussed cross-border enhancements. They have even made a commitment to ensuring that overhead lines on the core valley lines will be powered by 100% renewable energy, with at least 50% of the energy from Wales.
The hon. Gentleman is describing many very beneficial investments, but can he commit that the Labour manifesto will include a commitment to devolved rail infrastructure, and to reinstating the England-only nature of HS2 and similar England-only rail investment, so that Wales receives the full Barnett consequentials it deserves?
We will look into what further devolution can be provided, and I will elaborate on HS2 in due course. With each success that the Welsh Labour Government deliver, they ensure there is a better and stronger railway, but the reality is that their hands are tied on infrastructure. Passengers are paying the price for years of underfunding of key projects.
Despite the fact that the Wales route covers 11% of the UK network, as my hon. Friends the Members for Swansea West and for Newport East mentioned, between 2011 and 2016 it received 1.6% of the enhancement budget for that period. That persistent and historical lack of proportional funding has come at a cost. The people of Wales are tired of hearing the same excuses, as we have heard today. On HS2 and Northern Powerhouse Rail, colleagues have made it clear where they and their constituents stand. With the Government’s current position on Barnett consequentials, they must ensure better connectivity to HS2, and the timely and on-budget delivery of the project.
The Minister must deliver more tangible benefits for Wales. I would be grateful if he outlined exactly how he will make this possible by improving cross-border connectivity, particularly to HS2 stations. Sadly, this comes on top of industry stakeholders and passengers being left in the lurch with other future rail infrastructure projects. With the rail network enhancement pipeline consistently delayed, perhaps the Department could shed light on that, considering that the projects within it could give much-needed clarity and benefits to Wales.
In this Parliament, the Government have promised the publication of RNEP more than 40 times, saying they will deliver it “as soon as possible”, “very shortly”, “in due course”, “in the near future”, “in the coming months”, and after spending reviews that come and go. It is like an episode of “Yes, Minister”. Three and a half years since the last annual update of RNEP, we are still waiting. Considering the importance of that work for the future of Welsh railway infrastructure, will the Minister finally give a definitive publication date?
Unfortunately, the theme of the Department for Transport under the leadership of this Tory Government seems to be dither, delay and disappointment: no RNEP, no details on Great British Railways, and now there are concerns about further funding cuts to Network Rail. Is that the Government’s vision for the future of our railways? In Wales, that lack of clarity means projects are left in limbo. It is unclear how Wales will fit into the new system of running our railways, and vital funding for safety and maintenance has been called into question.
There has been some good work—my hon. Friend the Member for Neath noted that some level boarding enhancements have been implemented to improve disabled accessibility—but much more needs to be done. Rail lines in south Wales and between Holyhead and Crewe need enhancements and electrification. A future Labour Government will deliver an annual rolling programme of electrification of our railway lines to benefit the good people of Wales, not just people in other parts of the country.
Will the Minister provide some reassurance on that and outline how his Government’s plans will impact Welsh rail infrastructure and services? Further uncertainty will simply not cut it. The Government must not continue to sideline Welsh railway infrastructure and provide chronic underfunding for people in Wales. The Welsh Government’s work to ensure people have a real choice in how they travel is vital, but their bold vision needs the support of the UK Government. A future Labour Government will provide that support to deliver a greener, fairer, brighter future for everyone.
It is a pleasure to serve under your chairship, Mrs Cummins. I send my best wishes to the good people of Bradford, who also have a very good case when it comes to rail investment. I will leave it there, but you know exactly what I mean.
I thank the hon. Member for Neath (Christina Rees) for opening this debate on Welsh rail infrastructure, and for chairing the all-party parliamentary group. I really enjoyed her speech. Her love for the railways—if not for other modes of transport that cause her to hold her stomach—is heartwarming. As the spelling of my name suggests, Wales is the land of my father. Indeed, my daughter is now at Cardiff University, so I have a lot of time for it; it is very close to my heart.
Notwithstanding the fiscal challenges facing the Government, the March Budget confirmed funding for rail enhancements for the next five years. We are supporting ambitious and transformative growth plans for our railways. Through the excellent collaboration mechanisms that we have established with the Welsh Government and other stakeholders in Wales, there is now a real opportunity to drive forward sustainable, integrated transport solutions that deliver for the people of Wales and the wider UK economy.
Sir Peter Hendy’s recent Union connectivity review, which hon. Members have mentioned, recognised and endorsed the quality of work undertaken by the South East Wales Transport Commission and other pan-regional groups in Wales. I look forward to the North Wales Transport Commission’s report later this year, and to working with stakeholders in Wales to tackle strategic transport needs and deliver improvements for all rail users.
I want to address the points that hon. Members made about rail funding in Wales and the case for HS2, but first I will take a moment to address the basis on which rail enhancements are funded across Great Britain. The UK Secretary of State for Transport is responsible for funding and specifying Network Rail infrastructure for England and Wales, and Scottish Ministers have devolved responsibility for funding and specifying rail infrastructure in Scotland. The funding arrangements follow those responsibilities. The UK Department for Transport is therefore funded to spend money on heavy rail infrastructure in Wales, but rail in Scotland does not benefit from any UK Department for Transport spending. The Scottish Government receive Barnett-based funding so that they can fund Network Rail themselves. Those arrangements are the same as for other responsibilities that are reserved in England and Wales, but devolved in Scotland and Northern Ireland.
Turning to HS2—
I will complete the HS2 part, because I sense the hon. Gentleman might have something to add on that.
Although Wales will not receive any HS2 services, it is positively impacted by HS2’s construction and operation. As I have stated, the UK Government are responsible for heavy rail infrastructure across England and Wales; they spend money in Wales directly rather than funding the Welsh Government to do so. Current plans would see Welsh passengers benefiting from an interchange at Crewe, with HS2 providing shorter journey times to north Wales than is currently possible on the west coast main line. Journeys from Bangor to London using new HS2 services will take an estimated two hours and 30 minutes, down from the current three hours and 17 minutes on the direct Avanti West Coast services. HS2 will free up capacity on the existing west coast main line, which could be used for additional services.
Passengers from Wales will be able to quickly access services to Heathrow and central London via an interchange at Old Oak Common with the Elizabeth line, as the hon. Member for Neath mentioned, without having to go via London Paddington. HS2 will continue to provide Welsh companies and workers with opportunities to work in the HS2 supply chain—44 of HS2 suppliers are Welsh small and medium-sized enterprises. We will of course continue to engage collaboratively with Transport for Wales and regional stakeholders in Wales and border areas as we progress proposals for improved connectivity and journey times on the existing rail network while HS2 comes into being.
The Minister pointed out that infrastructure investment is devolved to Scotland and therefore the money for England and Wales would all be spent in England. The assumption is that Wales will benefit, which it does not. Does he accept that there is a compelling case for infrastructure investment or enhancement to be devolved completely to Wales so that we get our 5% share over time, in the same way as Scotland has had its 8% share over time? We have the infrastructure and Transport for Wales to deliver those projects. Is he working with Transport for Wales to ensure that that happens?
To answer the hon. Gentleman’s point, we remain committed to the position as stated. It will continue to be the case that the UK Government will fund the projects in England and Wales, and I will talk a little bit about the enhancement pipeline. This point needs to be made more to the hon. Member for Slough (Mr Dhesi). I listened carefully to his question about HS2’s Barnett consequentials, which will add to the bill for HS2. It is already a mission of mine to restrain costs to the level that we are currently running. I did not receive a clear answer, so if he believes, as I think he stated, that the Welsh Government will be in this space, it will be interesting to get absolute clarity—not just, “We will look at it.” Is it the case that all of the points he has made will add to the bill for HS2?
I thank the Minister, because he allows me time to provide clarification. It was the previous Labour Government that provided devolution so that the good people of Wales could decide on more aspects of their lives on a day-to-day basis. That is why we have said that we will look into further devolution on aspects such as transport—unlike the current Government, who say they fund the rail and transport infrastructure for the whole of England and Wales. That is all fine and dandy, but they are not providing sufficient infrastructure spend in Wales. The problem is chronic underspending, and that is something that the Minister still has not explained.
I was very excited when the hon. Member said he would answer that point, because it was a pretty direct one. I have said that we will not look to add the Barnett consequentials bill that his Back Benchers have requested, so I have been very clear on that front. The question is whether he would do so. I do not know whether other hon. Members felt that they got a clear answer to that, but I did not. To the Labour Back Benchers who are calling on me to do this, I say that I have been very clear that we will not be doing so. I am not entirely sure what their position is.
I will make some progress, if I may.
Will the Minister give way on this?
I will not give way, because I have given way already twice before. [Interruption.] As the hon. Member for Swansea West (Geraint Davies) has pointed out, I have given him a lot of my time to discuss these matters. I have done so with courtesy and, I hope, with interest. I have always been direct in responding, as I was just now. I hope he will afford me the same courtesy as I continue with the speech.
The UK Government have supported the Welsh Government in their ambition to have greater control over Welsh rail infrastructure. That is evident in the collaborative approach we took to working with our partners to divest the core valley lines to the Welsh Government in 2020. The Department’s response to the Silk Commission’s recommendations concluded that
“full devolution of Welsh rail infrastructure would be of no immediate benefit to passengers and freight.”
That view was endorsed by the Welsh Affairs Committee in 2021.
As I have not given way to the right hon. Lady, I will do so.
I thank the Minister. The fact that he has raised that point is immensely significant. Will the Government reconsider their position in the light of their announcement of their intentions for the freeports in Pembrokeshire, Port Talbot and Holyhead, and for freight? That is my major question.
It disappoints me to hear the argument that we should accept the contracts that are being given to Wales-based organisations as the only thing that Wales deserves from HS2. Frankly, that is very short-termist, and I would expect a UK Government to ensure that those contracts were fairly distributed throughout the UK. On freeports, there is a chance here to reconsider.
Order. I remind Members that interventions should be short and to the point.
I gently point out that I did not say that the one benefit to Wales would be the Welsh additions to the HS2 supply chain and workforce. I listed a whole number of benefits relating to service times as well. That is on the record in Hansard.
I am passionate about what HS2 will do for the UK in its entirety. It will bring great benefits. It runs through the spine and will allow better connectivity to Wales and back into England, and vice versa. It has a huge amount to add, so I believe that once it is built, the benefits will be there for hon. Members not only to see, but to enjoy and use. It will level up all parts of England and Wales as a consequence, and it will have those benefits. I am passionate about what HS2 is delivering. I felt that there was too much negativity in the room for me not to make that point.
I will make some progress. I want to be clear: we are investing in Welsh railways. In its most recent statistics published for 2020-21, the Office of Rail and Road reports that Government funding of the operational railway was £2.04 per passenger mile in England and £3.85 per passenger mile in Wales. That is almost 90% higher. The current railway control period—control period 6 between 2019 and 2024—saw a record £2 billion revenue settlement for Network Rail in Wales, which is more than double the £900 million invested previously. Of that, almost £1 billion is being spent on renewing and upgrading infrastructure to meet the current and future needs of all passengers, such as the complete restoration of the iconic Barmouth viaduct in Gwynedd. The development and delivery of enhancements to the railway network in Wales is also proceeding at pace. Passengers benefit from new stations, providing additional connectivity, together with improved accessibility at existing locations.
Will the Minister clear up something that I am not too sure about? In the original plans for HS2, at Crewe there was to be a connectivity hub that would face Wales, to join interconnecting services from Transport for Wales and other companies that would feed in. Is that still on the table, or has it been scrapped?
I will write to the hon. Lady, because I am due to work across Government to try to boost the ambitions for Crewe as HS2 comes to it. Only last week, I had a meeting with the Department for Levelling Up, Housing and Communities to discuss Crewe and what we could do to make sure HS2 leaves an ambitious legacy there. I will write to her, because those discussions and our intended deep dive may give her the further detail that she is deserving of.
I was mid-flow; I was about to say that level crossings are being upgraded to allow Transport for Wales to operate longer and more frequent trains on routes across Wales. Signalling systems are being upgraded to state-of-the-art digital technology, which will support the introduction of new high-performance Welsh-built trains with greatly improved passenger facilities and comfort. The Cardiff capital region is benefiting from more than £250 million of UK Government investment in the core valley lines, Cardiff Crossrail and the transformation of Cardiff Central station—schemes that can be delivered only through strong and effective collaboration with the Welsh Government and local authority partners. I am committed to that collaboration.
That work is happening now, but there is a lot more coming down the pipeline. Hon. Members will know that Lord Hendy’s independent review of UK transport connectivity was published in November 2021. In response, the Government set aside funding to support feasibility studies into options for strengthening some of the UK’s main transport arteries, in line with Lord Hendy’s recommendations. I am pleased to say that my Department’s officials have been engaging positively with the devolved Administrations and delivery bodies to identify potential projects for that funding to support.
I believe that the hon. Member for Newport East (Jessica Morden) mentioned the south Wales relief lines upgrade. That is now being progressed to a full business case, which the Department will carefully consider very shortly. We will continue to engage with the Welsh Government, with Transport for Wales and with the other devolved Administrations and will consider opportunities to collaborate further on projects that address the recommendations of the Hendy review.
Looking further ahead, the way people use the railway is changing. We are investing in ensuring that it supports passengers, freight and the economy of the future. I can tell the hon. Member for Neath not only that will we provide more details about the enhancement pipeline, but that we are signing off on projects and getting on with them right now. They have to be affordable, while also responding to demand for travel. In that context, and in response to a recommendation from the Welsh Affairs Committee, we are pleased to have established a Wales Rail Board to further strengthen collaboration between the UK and Welsh Governments. The board, which meets regularly, is establishing a strategic programme of rail infrastructure and service development in Wales, including cross-border connectivity. That programme will represent a shared vision between the UK and Welsh Governments on the rail infrastructure required to address strategic transport issues and deliver meaningful benefits to the population of Wales and the United Kingdom.
Let me move to the matter of the global centre of rail excellence. I welcome the great news given to us today by the hon. Member for Neath, who has been a great champion of this constituency jewel. She has invited me to visit it; I look forward to doing so, I rather hope by the end of June. The establishment of the centre, which is supported by £30 million of UK Government funding alongside contributions from the Welsh Government and the private sector, has the potential to support innovation in the UK’s rail industry and put Wales firmly on the map as a powerhouse in the testing of cutting-edge technology. I look forward to visiting. I also look forward to visiting, if I can, CAF Wales, as it is so nearby. I am grateful for the invitation.
Time is pressing, and I should mention the hon. Lady’s point about the Restoring Your Railway scheme and the restoration of the closed Beeching lines. We have had a very successful programme, and more than 200 right hon. and hon. Members have sponsored projects. Of course, it is not possible to take all projects forward, but I am proud that we are able to take some forward. I have already visited one that has opened, and many more will be invested in.
Access for All was also mentioned. It is important that we ensure that the railway is accessible to all. Some 220 stations across the UK have been made fully accessible, and another 1,500 stations have been given improvements to assist in that regard. Another programme is available, and I look forward to assessing applications.
Will the Minister give way one more time?
I will not, if the hon. Member does not mind. I have given him quite a lot of time, and I want to hand back to the hon. Member for Neath. No doubt we will speak afterwards.
Investment in Wales’s transport infrastructure is an investment in future generations, not just for Wales but for the whole UK. Ensuring that our transport capability matches our great ambitions for our constituents’ prosperity and wellbeing is a priority for this Government that I know everyone in this room shares. We owe it to our hard-working constituents to invest in the most sustainable forms of transport for the future, delivering both on the green industrial revolution and on our pledge to grow and level up the economy and create opportunities for everyone across Wales and the UK. I conclude by thanking the hon. Member for Neath for calling this debate.
I thank my hon. Friends the Members for Newport East (Jessica Morden) and for Swansea West (Geraint Davies), the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) and my hon. Friend the Member for Cynon Valley (Beth Winter), who have shown their passion, vast knowledge and commitment to improving all aspects of rail infrastructure in Wales. The Minister has heard our concerns. I urge him to fight for funding to improve rail infrastructure in Wales.
I look forward to the Minister’s visit to the global centre of rail excellence—I am sure he could bring his daughter as well. I extend the invitation to all hon. Members here today, including the shadow Minister, my hon. Friend the Member for Slough (Mr Dhesi). You should visit too, Mrs Cummins: I know what a champion you are for improving rail infrastructure in your Bradford South constituency.
And the buses.
Question put and agreed to.
That this House has considered railway infrastructure in Wales.
Prison Officers: Pension Age
I beg to move,
That this House has considered the pension age of prison officers.
May I say how nice it is to see you in the Chair for the first time, Mrs Cummins? I have led lots of Westminster Hall debates in which the only other Member present was the hon. Member for Strangford (Jim Shannon), who is always here. Moving the motion feels a little like groundhog day because I moved identical motions in October 2019 and in November 2021. I have also tabled a number of parliamentary questions about the scandal that many prison officers are expected to work until they are 68, when their counterparts in the police and fire services are able to retire at 60.
I have raised the issue many times because I hoped that the Government would accept that the pensions disparity is unfair and would take steps to rectify it. Sadly, successive Prisons Ministers have failed to do so, but I am nothing if not persistent, so I am here again to speak out on behalf of prison officers, including those working in my three local prisons, His Majesty’s Prisons Elmley, Standford Hill and Swaleside.
Let me begin by reminding my right hon. Friend the Minister that the law in relation to prison officers is quite clear. The Prison Act 1952 gives prison officers
“all the powers, authority, protection and privileges”
of police officers. However, despite that clear legislative statement, prison officers do not have the same protection and privileges as police officers when it comes to their pension rights. That problem dates back to at least 2011, when Lord Hutton undertook a review of public sector pensions in which he did not take the 1952 Act into account, and prison officers found themselves forced to work eight years longer than police officers in order to claim a full pension.
I recognise the hon. Member’s persistence on this issue, for which I am very grateful. The Minister will know that I sit on the Select Committee on Justice, which has heard from the Prison Officers Association. Would the hon. Member be interested to know, as I would, what the Minister would say to the POA regarding retirement age, about which it has expressed strong concerns?
As somebody who has worked very closely with the POA over my 13 years as a Member of Parliament, I certainly would. I will come to the stance of the POA later in my speech.
First of all, it is a pleasure to serve under your chairmanship, Mrs Cummins. I may always be in Westminster Hall, but it is lovely to see you in the Chair.
I congratulate the hon. Gentleman on introducing the debate. I have raised this issue before, as I know he has. We have signed early-day motions on the issue, and Members will know where I stand on it. Prison officers carry out some of the most brutal public service work in dangerous and often violent conditions. Often it has intense impacts on their mental and physical health, making it a large demand to ask them to work until they are 68. Does he agree that prison officers’ retirement age should be aligned with that of police officers, and that the retirement age of 68 puts people off training to become great prison officers?
Not only do I agree, but I will go on to explain why. The Hutton report set up a protected group, stating that
“for the uniformed services—the armed forces, police and firefighters—where pension age has historically been lower to reflect the unique nature of their work a pension age of 60 is appropriate.”
Unfortunately, prison officers were not included in that protected category, which is both wrong and puzzling, not least because the work of uniformed prison officers is definitely unique.
I rise as co-chair of the justice unions parliamentary group; I also work with the POA. Not only is the retirement age wrong and unfair, but it has a direct effect on the quality of the service provided in our prisons. We know that recruitment is in crisis. More than that, retention is in crisis. We lose good-quality prison officers because, with these pension arrangements, they are not prepared to stay.
No one could argue with what the right hon. Lady says. I certainly would not.
I was talking about the uniqueness of the Prison Service. For instance, each day of prison officers’ working lives, they are expected to act in a range of different roles, including as social workers, teachers, dispute resolvers and, most significantly, police officers and firefighters within the prison. That range of responsibility is unique in the public sector, which makes the exclusion of prison officers from the protected category deeply unfair.
When challenged about that unfairness only last year, the Government’s response showed a disappointing and surprising lack of knowledge about working in a prison environment. Lord Stewart of Dirleton said that
“by comparison with emergency services such as the police or fire brigade, while the environment is a challenging one, it is to an extent controlled, which those other occupations are not. In that context, we consider that 68 is indeed an appropriate age at which to retire.”—[Official Report, House of Lords, 16 June 2022; Vol. 822, c. 1683.]
I have to tell the noble and learned Lord that his conclusion is utter nonsense. Many prisons are violent places in which some very dangerous and resentful criminals are incarcerated against their will.
The hon. Gentleman has mentioned the protections in the Prison Act 1952 but, regardless of that Act, how on earth do we expect people of 68 years of age to be rolling around the landings with some of the most dangerous criminals in this country? Regardless of the rules and regulations, how come there is such a massive difference between other protected services and the Prison Service? Rightly, the pension age is 60 in the police and fire services. Have a look around the Chamber at Prime Minister’s Question Time: how many 60-year-olds are sitting there who are past their sell-by date? Can anyone imagine some of them getting on the landings with the most dangerous criminals in this country? I really cannot.
As someone who is 75, I can assure the hon. Gentleman that I do not feel I am past my sell-by date, but I recognise that next year, when I am 76, I will be, which is why I will not be standing at the next election.
I was talking about violence in prisons. It is hardly surprising that prisoners rebel against authority and take their resentment out on those in charge. Assaults on prison officers have increased dramatically over the past few years. In addition to those violent criminals, there is an increasing incidence of gang culture, radicalisation among some prisoners and a proliferation of terrorists in our prisons, none of whom have much to lose if they mount an unprovoked attack on prison staff.
I point out to Lord Stewart that his conclusion is wrong, because it does not recognise the fact that police officers come into direct contact with violent criminals only for limited periods, mainly during their arrest and interrogation. However, once those criminals are tried, convicted and sent to prison, it is prison officers who are expected to be in close contact with them 24 hours a day, every day, week, month and year of their sentence. For that reason alone, as the hon. Member for Lewisham East (Janet Daby) said, it is totally unfair that police officers can retire at 60 while prison officers have to work until they are 68, doing some of the most difficult tasks that we could impose on them.
Will the hon. Gentleman give way?
I am sorry, but I really do not think I have time.
Another argument that the Government put forward for forcing prison officers to work eight years longer than their police and firefighter counterparts is that employees in those professions contribute significantly more of their salary to their pensions. But as my right hon. Friend the Minister will know, prison officers have repeatedly made it clear that they would be willing to pay more towards their pension if they earned the same amount as the police and firefighters.
I fully anticipate that the Minister will point out that previous Governments offered to reduce the pension age for prison officers in 2013 and 2017, which is true. However, both offers came with unacceptable strings attached. In addition, had those offers been accepted by prison officers, the proposals would only have reduced their retirement age to 65—still nowhere near parity with the police and firefighters.
I mentioned earlier that prison officers are unique, and they are unique in another way. Unlike the police and firefighters, who have their own pension schemes, prison officers are technically part of the civil service and are therefore members of the civil service pension scheme. I appreciate that that is a complication when considering any reduction in pension age, but it is worth pointing out that prison officers make up less than 5% of the membership of the civil service pension scheme, so making them a special case, which I believe they should be, would have little impact on other civil servants.
My view is that with good will on both sides, the Government and the Prison Officers Association should be able to sit down and work out a realistic and cost-effective way to allow prison officers to retire at 60. However, reaching any such agreement would require both sides to enter into meaningful negotiations without prejudice and pre-determined positions. With that in mind, I would be grateful if my right hon. Friend the Minister agreed to meet the POA, if only to talk about the practicalities of such a negotiation process.
It is a pleasure to see you in the Chair, Mrs Cummins. I thank my hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson) for securing this important debate, as it highlights the vital role that prison officers play in keeping the public safe and rehabilitating prisoners. I take this opportunity to pay tribute to them for their tireless work day in, day out.
Prison staff are vital key workers, with many going above and beyond every day to keep safe the public, their colleagues and those committed by the courts to the care of His Majesty’s Prison and Probations Service. I am always hugely impressed by the commitment of prison staff, who sometimes work in the most challenging of circumstances to turn around offenders’ lives. In so many cases, they manage to do exactly that.
I thank my hon. Friend for his continuous support in representing his constituents on this matter. As he alluded to, his constituency contains three establishments, known as the Sheppey cluster: HM Prisons Elmley, Swaleside and Standford Hill. I know he has met officers in those establishments a number of times, and he continues to show support and convey the messages they rightly give him by discussing the points raised in public forums, such as here in Westminster Hall, and in meetings with Ministers. He is committed, assiduous and, on the subject he has brought forward today, very consistent.
The pension age for prison officers is linked to their pension arrangements. As my hon. Friend said, prison officers are classified as civil servants and are hence members of the civil service pension scheme. The pension age for all members of the civil service pension scheme is set to reflect their state pension age, which is between 65 and 68, depending on their date of birth. It is important to note that the rules and regulations in all public sector pension schemes, including the pension age, are introduced in legislation by His Majesty’s Treasury and applied within the civil service pension scheme by the Cabinet Office. The current pension age in the civil service scheme is set at state pension age, as a result, as my hon. Friend said, of the recommendations made in the 2011 independent Hutton report on the future affordability and sustainability of public sector pension schemes.
The report’s concluding recommendations were that membership of all final salary schemes should be closed and that all active members should be enrolled in a career average scheme, with an increased pension age to reflect their state pension age. Those changes, as colleagues will know, were introduced by the Treasury in the Public Service Pensions Act 2013 and applied to all public sector schemes.
As you know, Mrs Cummins, the civil service is comprised of hundreds of thousands of people, and it is the Government’s duty to ensure that their pension arrangements are fair and affordable, now and for future generations. It is also the duty of the Government to ensure that they meet their wider obligation to manage the public purse.
I want to emphasise that it is recognised, of course, that the role of prison officer is physically demanding. In 2007, the Cabinet Office gave consideration to that prior to the pension age being increased from 60 to 65 for newly recruited civil servants. Its finding was that, as a number of other civil servants had similarly demanding roles—for example, seamen on Royal Fleet Auxiliary ships—a lower pension age could not be justified following comparison with members of other schemes.
I am sure the Minister will appreciate that the POA does not understand the comparison with seafarers, and it is difficult for anybody in the Chamber to do so. Will he respond to the POA’s concern that the Treasury is trying to derail pension age discussions because of its cynical estimation that many prison officers will have to leave before the age of 68 because they will fail their annual fitness test or due to injury or illness? That in itself will save the Treasury money. That deserves a response.
It certainly deserves a response, and I am grateful to the right hon. Lady for the points she has made. We want attractive career paths to be available to everybody who works in HM Prison and Probation Service. Those might be different as people go through their working lives, but we want to try to facilitate that as much as possible. I will come to the emphasis that we rightly place on occupational health and helping to support people through those journeys.
Since the introduction of the pension age of 65 for new recruits in 2007, HMPPS has been recruiting new prison officers in their 60s who have passed the fitness test and are undertaking the role safely and securely. As has been mentioned, consideration has also been given to comparisons between the role of prison officer and roles in the emergency services, such as firefighter and police officer, whose pension schemes both have a pension age of 60. Of course, that age had been increased from 55 under the Hutton recommendations.
It is important to note—my hon. Friend the Member for Sittingbourne and Sheppey did note this, and pre-empted me by saying he thought I would say it; he was right—that those in the police and firefighter pension schemes pay more into their pension to allow them to take their pension at the age of 60. Under the civil service scheme, a prison officer contributes, on average, 4.6% of their pensionable pay whereas the rate for the police and firefighter schemes is between 12% and 14% of pensionable pay.
As my hon. Friend also said I would say, in 2013 and 2017, HMPPS worked with the Treasury and the Cabinet Office in making an offer that would have allowed prison officers to purchase a lower pension age, from the state pension age to 65, which was put to them for ballot by their trade union, the POA. The offers made to purchase a lower pension age would have been significantly subsidised by the employer, reducing the additional financial impact on officers. As my hon. Friend also said, those offers were part of a wider package with other reforms and they were rejected at ballot.
Prison officers who are members of one of the legacy civil service final salary schemes retain the right to take formal retirement at the age of 60 and draw the full benefits that they have accrued in their legacy scheme. Many officers who could seek to take their unreduced pension at the age of 60 and retire from the service on that basis have taken the personal decision to continue to work full time, or have taken partial retirement and continued to work in an operational role, but on reduced working hours.
As I was saying a moment ago to the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts), who represents Plaid Cymru, HMPPS takes very seriously the health and safety of all staff working within the prison estate. Staff have access to onsite care teams and an employee assistance programme, which includes confidential 24-hour support, and they are covered by a wide range of occupational health schemes, which are provided by specialist healthcare professionals. Furthermore, HMPPS has delivered the trauma risk management programme to provide practitioners in every prison, and colleagues in trauma risk management identify staff members who may be struggling after a traumatic event, and offer them onsite support. Those practitioners are trained to identify symptoms and to signpost assistance and support to relieve symptoms of post-traumatic stress.
In August 2022, HMPPS published the employee offer known as “Looking After Our People: The Prison Service Employee Package”. That guide brings together information about career progression, training, benefits and support. It gives an overview of the work being done to make sure that the Prison Service provides the right employment offer for the future and it will be updated every year. HMPPS values career progression and prisons experience, which is why the career pathways framework has been created.
The Minister will know, because it has already been mentioned in the debate, that there is a serious retention and recruitment problem with prison officers. When the Justice Committee recently heard from prison officers, many of them said that they were not looking to remain as prison officers within the Prison Service because of the retirement age. That significant problem needs to be addressed.
I am grateful to the hon. Lady for that intervention. I take both recruitment and retention extremely seriously. I was just saying that there is a particular value to experience and we need a mix in our workforce and diversity of all sorts, including diversity of length of tenure and experience, both to share and deploy that experience and to bring on the newer recruits who are coming through. Retaining staff is an incredibly important point.
Many factors affect retention. I accept, of course, that the pension is absolutely part of the blend of remuneration, benefits, working conditions and all the other things that go to determine people’s career choice about whether to stay in a particular role or not. However, what I will say to the hon. Lady is that even with a pension age set to mirror an individual’s state pension age, the civil service scheme is still one of the best pension schemes available. It has one of the very lowest contribution rates across the public sector, at the 4.6% that I have already mentioned, and there is an employer contribution of 27% into the scheme on behalf of the employee. It also has one of the best accrual rates, which is set at 2.32%.
I have always thought of the Minister as a very reasonable man, and he has made a logical case, although I disagree with virtually everything he said. He has basically given the real reasons why the Government and the Prison Officers’ Association should meet to discuss these issues, although there has been a reluctance to do so. Everything he said can be challenged, and I think that constructive discussions between the Prison Officers’ Association—representatives of the people working in the prison—and the Minister and his team would be highly productive. Will he give that commitment before he concludes his speech?
The hon. Gentleman is absolutely right that constructive discussion is always good; that is why we meet here in Westminster Hall and have these debates, and why my hon. Friend the Member for Sittingbourne and Sheppey has raised this subject today and on previous occasions. It is absolutely right that Ministers are held to account and answerable. I was just about to raise discussions with the profession and the POA. In my role, I am lucky enough to speak to prison officers frequently, and I am always happy to speak to the POA.
I thank my hon. Friend for consistently representing his constituents and others, and for bringing this important matter to the House. I mean that sincerely. I put on the record again my thanks to and appreciation of the prison officers of all grades and roles who work in the prison estate for the incredibly valuable and irreplaceable work that they do every day.
Question put and agreed to.
Small and Medium-sized House Builders
[Mr Lawrence Robertson in the Chair]
I beg to move,
That this House has considered the future of small and medium-sized housebuilders.
It is a pleasure to serve under your chairmanship, Mr Robertson. I am particularly pleased that this debate has been granted, as it is on a subject that I have had an interest in for a long time. It is 20 years ago this week that I first became an elected Conservative politician. Throughout that time, housing has been central to my work. I spent 12 years on a planning committee, was the director of a housing association, led a county council, and held a strategic planning role on a regional assembly. Even during my time as an MEP, I served as the co-ordinator on the Committee on Regional Development.
Since my election as MP for Northampton South in 2017, housing has become ever more central to my work. In my maiden speech, I referred to my predecessor, Michael Morris, now Lord Naseby, who is still my friend, and to his 1974 maiden speech, which also had much content about Northampton and its housing issues. Locally, I am close to Northamptonshire Partnership Homes and its excellent and recently retired chief executive, Mike Kay. I was pleased to cut the ribbon on several of its developments.
For the vast majority of my time in Westminster, I have been a member of the Housing, Communities and Local Government Committee, as I wish it was still called. I am chairman of the all-party parliamentary group for the private rented sector and, most relevantly to this debate, I am founder and chairman of the APPG for small and medium-sized enterprises house builders, which has well over 200 industry members.
Unsurprisingly, I strongly believe that SME house builders can play an incredibly important role in addressing the dual problem of housing accessibility and affordability across the United Kingdom. Many of us recognise those problems, which are particularly acute for those aged under 40. A recent study by Lloyds bank illustrated the depth of the problem that younger people face when buying a house. In 1989, 51% of 25 to 34-year-olds owned a house—a high point—but that figure plummeted to 28% in 2019. It is not the focus of the debate, but the impact of migration on that cannot be ignored. In the last two decades, around 8 million people have been added to the population of the UK by immigration alone. That represents about four fifths of population growth. A new home needs to be built every five minutes if we are to keep up. As a political class, that is on us. Whether we approved of it or, like me, did not, does not matter. It is a fact.
No matter how much we would love things to stay the same, and no matter how much we do not want more houses in our constituency because we have persuaded ourselves that it is special, that cannot be. No one policy prescription or sector alone can remedy the alarming decline in home ownership, but all Members of Parliament should be concerned about generational disparity. From my party’s point of view, if one good thing comes out of last week’s election, it should be any complacency being struck out; a huge increase in house building must be a priority.
As a Conservative, I feel very strongly about the UK being a property-owning democracy. It worries me deeply that, for many young people, home ownership is increasingly out of reach. I do not believe that any one policy prescription can arrest the trend; home ownership is declining for a great many reasons, and meaningfully addressing those would take much longer than the time allotted for this debate. However, in my role as chairman of the APPG for SME house builders, and as a member of the Select Committee, I want to talk about how the SME house building sector can play its part in changing things for the better.
The Home Builders Federation reports that the SME house building sector delivered about 22,000 homes in 2020. Those are typically smaller developments built on trickier sites, be they awkwardly shaped and accessed ex-industrial sites, repurposed and extended buildings in towns and villages, or small, sustainable urban extensions. The SME house building sector tends to go where the volume house builders cannot. During my many years on a planning committee, I saw, just as many of us will see now, that SME developments often faced significantly reduced community objection. The cry of many is, “Brownfield first.” Whatever we may think of that policy ambition, SME house builders are delivering brownfield site housing up and down the country day in, day out. Many of the objections that people raise through the planning process relate to the scale of development proposals. “We do not want hundreds of houses here” is a refrain familiar to many of us, I am sure. All too often, people do not get the infrastructure to go with those large developments, and we can then see why opposition to development is not pure nimbyism; we need to be fair to people about that.
The SME sector of the house building industry delivers on more difficult sites, and in a way that elicits significantly less vocal objection than some of the volume house builders do. It delivered 39% of all homes built in England in the late 1980s, yet barely manages 10% of our annual housing completions 40 years later. I want to talk about why that is, and what the sector and the Government can do to arrest that decline.
The APPG has identified three significant issues facing SME house builders in the UK today. I am sure that there are many more, but addressing these three would put the industry in a much better place. The first is the cost of materials. The APPG has been working with partners on cost-of-material issues; it is clear that they have been particularly acute in this inflationary period. Of course, this is not the only sector struggling because of inflation, but SME house builders typically have smaller cash reserves than volume house builders, so they feel material costs much more keenly. There has been a de-globalisation impact too, as supply chains reaching into the far east get less reliable. That gives rise to a whole other debate on resilience, reshoring and not exporting our emissions so that we can pretend that they are lower.
Many cost pressures are a function of our wider economic challenges, but I want to hold up one example of what a business based in Northampton is doing to try to lessen the impact of material costs on SME house builders. Travis Perkins has for many years engaged with the SME house building sector, both as a member of the APPG and, much more broadly, in its role as a major supplier of building materials for the industry. I was delighted to see that, earlier this year, Travis Perkins launched an escrow agreement with Close Brothers Property Finance to support SME house builders. The initiative means that SME house builders can access building supplies and materials directly, without often lengthy pre-approval checks. That tackles one of the major challenges faced by SMEs when setting up special purpose vehicles on their developments. Travis Perkins is confident that the move significantly reduces financial risks for SME house builders, increases their supply chain stability, and reduces time spent managing cash flow. That is the kind of innovative thinking that we need to help manage the cost-of-materials issue, and I encourage other material suppliers to take inspiration from that.
The second big issue I will touch on is finance. The APPG has just submitted a call for evidence on access to finance for SME house builders, and we will invite right hon. and hon. Members to the launch of our report. I will not talk about everything in the report, but one of its clear themes is Land Registry delays. A number of developers have written to the APPG to raise concerns about extreme delays in the Land Registry’s process for recording changes of ownership of properties. Although that might seem relatively inconsequential, smaller SME house builders often obtain finance for their next development by borrowing against what is in their asset book. I have heard of cases of SME developers being more than a year into developing a well funded and successful development, but then finding themselves unable to borrow against it because the Land Registry had not recorded the fact that they bought the land years previously. I hope the Minister will look into that. Delays by state bodies that affect access to private finance are very troubling to me, and I implore the Government to address that.
Another significant barrier facing SMEs in this country is access to labour. The home building industry is a major employer in the UK; the planning, design and delivery of new homes directly or indirectly supports an estimated 800,000 people. However, the industry is facing a major skills shortage due to increased demand for housing, an ageing workforce and a severe loss of skills, particularly in the last recession. A January 2022 report from the House of Lords Built Environment Committee highlighted that 53% of SME builders were struggling to recruit carpenters, and 47% said the same about bricklayers. A report by the Federation of Master Builders found that between January and March 2023, 41% of its members had difficulty recruiting carpenters, and that bricklayers and general labours were also particularly difficult to recruit. Those are great jobs. They are well paid and give people great opportunities to be enterprising and plot their own course in life.
As well as being on the Levelling Up, Housing and Communities Committee, I sit on the Education Committee. There is renewed interest in the skills agenda, notably spearheaded by the Minister for Skills, Apprenticeships and Higher Education, my right hon. Friend the Member for Harlow (Robert Halfon). I hope he will listen to the sector and providers and work with DLUHC, which is crucial to success, not just because of its housing role but because of its devolution responsibilities. It is key that there be no sector skills gaps, or unnecessary barriers to entry into skilled vocations along the further education learning route.
The growing labour issue coincides with decreasing numbers of apprentices being employed by SME builders: 80% of responders to the Close Brothers report based in the north said that the supply and cost of labour is a major barrier to increasing housing supply. Just 50% said the same last year. At the same time, the number of respondents based in the north who are hiring apprentices dropped from 88% in 2021 to 48% in 2022, yet seven in 10 contractors’ apprentices are trained by SMEs. That makes up 90% of training capacity, according to the Construction Industry Training Board. That is important, because housing stock is desperately needed in this country to meet demand. To put the challenges in wider context, according to the Federation of Master Builders, SME builders could deliver up to 65,000 homes by 2025, compared with 12,000 in 2021, given the right conditions.
I turn to the big one: planning. I know colleagues are very nervous about planning—likely even more so after last week’s local election results—but it would be entirely remiss of me to discuss SME house builders without discussing the one issue they raise with me more than any other: the planning system. According to Close Brothers, 93% of SME developers regard planning as a barrier to their growth. I know that the politics of planning extend well beyond this debate, and I appreciate that a great many arguments about planning reform have been made in this place and across the country over the past few years. I do not seek to wholly reignite that debate today, but I am already on the record as having said this in the House, so I will say it again: given our system for house building, removing the binding national housing targets is a mistake. When the history of this Government is written, that mistake will loom larger than it already does.
A different way was available—perhaps not entirely via zonal planning, but we could have gone some way towards the zonal planning system reset proposed by my right hon. Friend the Member for Newark (Robert Jenrick) in his time as Secretary of State for Housing, Communities and Local Government. That will come to be seen as a great lost opportunity. Not least among its potential benefits was its simplicity, and a reduction in the curse of 21st-century British life—process. The advantage of such a change to SME house builders, disproportionately affected by process as they are, could have been significant.
A top example of the curse of process is the restrictions placed on housing delivery by Natural England in respect of nutrient neutrality, water neutrality and recreational impact zones. Those are already holding up the delivery of 150,000 new homes, according to the Home Builders Federation. Phenomenally complex regulatory requirements disproportionately disadvantage SMEs. They do not have comprehensive process departments, in-house lawyers or administrators filling a floor—or, these days, working from home. It was an argument for leaving the EU that it could make us more nimble and not over-regulated; over-regulation always favours the bigger players and entrenches their non-productive bureaucratic advantages. Our becoming nimbler and less regulated has not happened yet; it needs to.
I am certain that conversations around zonal planning, housing targets and local plan compulsion will continue long after I end this speech, but I thought it important to touch on two potentially new points that Members may find illuminating. The first relates to the regular feedback I receive from SME house builders on their interactions with local authority planning departments. On a number of occasions, I have had troubling conversations with SME developers in which they told me that they have faced great difficulty with planning officers in authorities across the country, despite their schemes being small and relatively uncontroversial. I have spoken to people from across the industry in town planning, planning law and property public affairs, and this pattern of planning officer difficulty is demonstrated in many local authorities, regardless of party control or council type.
I have come to understand that this difficulty might well be related to planning officer case load. As one town planner recently explained to me, although a 20-unit brownfield scheme developed by an SME is likely to require less work than a 400-unit green-belt development led by a volume house builder, it will not require 20 times less work. The resourcing of planning departments, coupled with five-year land supply targets, means that it is more logical for many planning officers to devote their attention to large schemes promoted by volume house builders than it is for them to support SMEs through the planning process. For a planning officer, the pain and controversy of a 400-unit greenfield scheme can be severe, but once it is done, their housing target for the whole year might be met, which would never be possible if they devoted their attention to smaller, bespoke SME developments. That is why I think DLUHC needs to look again at the planning process—not to change it fundamentally at this late stage in a Parliament, but to see if anything can be done to make smaller-scale applications less onerous for both developers and planning officers. However, that is not just a job for Government.
Local authorities already have significant planning powers that they could use to ease the passage of schemes promoted by SME house builders. I was interested to read about one such proposal earlier this year: local authorities across England were encouraged to take inspiration from work that the Greater London Authority had undertaken through its Small Sites, Small Builders scheme, and to start granting outline permission for brownfield sites before they sold them to SME developers for redevelopment. If a local authority awards outline planning permission for a site before it is disposed of, it becomes, at the stroke of a pen, much easier for SME house builders to secure development finance. It also significantly reduces the risk of rejection by a planning committee.
A variant of that approach could also help the cause of the visionary work of the Bacon review, which is the culmination of countless years of expertise on the part of my good hon. Friend the Member for South Norfolk (Mr Bacon). It is a blueprint for advancing SME house builders, housing numbers, and individual freedom and liberty. The Government commissioned the review and promised that they would act on its recommendation. Perhaps the Minister could update us on progress in on that.
The SME house building sector can be a real asset for the United Kingdom. It is full of creative, resourceful people who, more often than not, deliver a high-quality product on harder-to-develop sites. The sector faces real challenges, so it needs a Department and a Government who are open to ideas, especially ones that can be implemented quickly. My hon. Friend the Member for Weston-super-Mare (John Penrose) has ideas for eminently SME-friendly ways to remove planning restraints, including by building up more than out, and by adding a storey or two to existing housing. It would add to volume, producing a quick boost to the SME sector, avoid overbearing the development sector, and protect greenfield all in one. I look forward to working with him to progress those ideas with the Department.
I have proposed similar ideas through amendments to the Levelling-up and Regeneration Bill. Over the last year, with the support of almost 50 organisations including Barratt Homes, G15, Optivo, the National Housing Federation and a range of SME and industry leaders, I have worked with key stakeholders to shape a small sites planning policy, which could redefine the fortunes of the sector. Through simple tweaks to the national planning policy framework, it would not only streamline the planning process, but also allow developers to deliver more affordable housing. The small sites policy could lead to over 1.6 million more homes being built on under-utilised sites across the country, helping SME house builders to thrive and regain their position in the housing market. From levelling up to housing delivery and enterprise, we believe that the policy could contribute to a virtuous circle that helps the Government to meet a number of their economic and social targets. I look forward to the Minister’s update on the indication the Secretary of State gave on the Floor of the House that my small site policy proposals would be taken on board in future.
The growth of and support for the SME house building sector are key to arresting the decline in home ownership among younger people. The sector requires our time and support, and the APPG does good work trying to support it. Lots of colleagues get what we are trying to do. I have named some, and I could name many more from across this House, including my right hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke), and my hon. Friends the Members for Dover (Mrs Elphicke), and for Walsall North (Eddie Hughes). I also sincerely thank those who have attended today’s debate.
I need to start the Front-Bench speeches at 3.28 pm, so perhaps colleagues could be mindful of that.
It is a pleasure to serve under your chairmanship, Mr Robertson. I sincerely congratulate and thank the hon. Member for Northampton South (Andrew Lewer) for introducing the debate, which is of such importance. Many of us prefer SME house builders because of the relationships they have with the communities in which they build, creating local employment and having a sense of—dare I say it?—ownership and responsibility to those developments for the generations that follow.
As of April this year, our communities in the lakes and dales have been served by the Westmorland and Furness unitary authority; before that, South Lakeland District Council covered all of my constituency. I am proud to say that over the last few years, working with local developers and housing associations, we have built well over 1,500 new genuinely affordable social rented properties. I disagree slightly with the hon. Gentleman about the role of planning. My sense is that if we are very specific about the housing we need, we are more likely to get it, whereas if we are more lax and give more freedom, people tend to hold out for a sunny day and seek the biggest possible dividend.
There was a lot of debate during last week’s local elections—it is an ongoing debate—about whether and where one should build houses. One reason that planning authorities are often suspicious of developers, large and small, is their concern about what will happen to the properties once they have been built. Will they be lifted? Will they be affordable? Will they remain part of the housing stock for the community for long? Among the reasons why developments are rejected, and why there is sometimes a less than positive attitude towards developers, is a fear that those developers may not be all that signed up to what happens to the homes and their tenure after they have been built. That is particularly relevant in the Lake district, the Yorkshire dales and other parts of Cumbria.
In the national parks, planning rules allow us to be pretty clear that everything that is built is affordable—and, by the way, we do not have a problem building houses. Developers know what is on the table. They know what the game is: if they want to build, they must build affordably; if they do not want to build, off they go and try their luck somewhere else. Outside the national parks, we have the issue that the local authority has to negotiate the proportion of a new development that will be affordable. That proportion is often no more than 30%—and even then, “affordable” is often a stretch.
In a community like ours, we can build as many executive four or five-bedroom houses as we like—there will always be demand for them—but my concern is that we should build for need rather than demand. I encourage developers to be on our side in campaigning for the houses that we need, rather than those that will just turn a profit. In my community, the average house price is 12 times the average annual salary; the average person is therefore snookered when it comes to buying their own home. All the Government’s packages may help a little at the fringes, but they do not help 99.9% of the people who are unable to afford their own home.
In my constituency, there are roughly 6,000 people on the social housing waiting list. There are about 7,000—we do not know exactly, because there is no formal record—second homes. We have an awful lot of homes that are not used for the purpose for which they were built. The last few years have seen the collapse of the long-term rented sector—both new and older properties—in into the short-term private sector. In one 12-month period during the pandemic, there was a 32% increase in the number of properties in South Lakeland moving from long-term rented to short-term rented. The number has increased further since.
Let me provide a quick snapshot of the market in Cumbria at the moment. As I speak, there are 8,384 short-term rented properties and 232 long-term rented properties available. By the way, 75% of those short-term rented properties are on Airbnb. There are 36 times more short-term rented properties than long-term rented properties. The collapse of the long-term sector into the short-term sector has decimated our local populations, with people and their children literally evicted from the homes and communities that they were brought up in. There has been a Lakeland clearances, effectively, over the last two or three years. That is miserable for those families and utterly damaging to our local economy and society.
Some 83% of hospitality and tourism businesses in Cumbria report severe difficulty getting enough staff. Why? Because there is nowhere for them to live any more. On top of that, one of the reasons why up to a third of the beds in our hospitals are blocked is that there are not enough care workers to provide the packages to get people out of hospitals to be cared for in the community. Our hospitals are clogged up, A&E is clogged up and ambulances are dangerously late as a result. All that is a consequence of the fact that the housing stock built by large and small developers, including new homes, is not being used for the purpose for which it was built.
My plea to the small and medium-sized developers—to developers of all kinds—is that I want them to care as much as I do about what happens to their homes after they have been built. Our communities are the absolute, definitive opposite of nimbys. I can show hon. Members leaflets that I have delivered in most of the wards in my constituency where we actively campaign for homes to be built. Grasmere, Hawkshead, Ambleside and Coniston all have developments that were built as a direct result of local campaigns for homes. We are the antithesis of the nimby, but we want the homes that we need, not the homes that businesses think they can make a killing out of.
I want the Government to make, and I would love developers to support, changes to the law in three areas. First—the Government are looking at this, and I encourage them to crack on with it and do it well—we must change planning law so that short-term lets are a separate category of planning use from long-term residential accommodation. That would mean that we could have a minimum number of homes in our communities that are lived in long term, so that people of all ages and backgrounds can live in the lakes and dales.
The second change, which the Government are not planning to make, is the introduction of a planning category for second homes—boltholes for people who live somewhere else. It is nice for them to able to do that, and of course in a free society they are entitled to a second home. However, if their right to a second home clashes with my constituents’ right to a first home, I know whose side I am on. I want to ensure that there is a planning law that allows us to put a limit on the number of second homes in communities. The Government have so far resisted that, and I encourage them to change their mind.
Thirdly, we should give councils and national parks the power to build council houses and ensure that they remain in the social sector, and the power, through planning, to enforce 100% affordability in those new developments.
My message to developers is that without them we would not have new homes, so I am grateful to them and I want to support them, but they would get more yeses through the planning system if they showed us that they care what happens to the homes once they have built them. If they show that they care, back the campaigns that I have just called for and join us in lobbying the Government to change the law in order to ensure that new homes remain affordable for local people in places such as the lakes and the dales, then they will find planning committees much more likely to say yes.
It is a pleasure to speak under your chairmanship, Mr Robertson. I congratulate the Backbench Business Committee on granting this debate, and my hon. Friend the Member for Northampton South (Andrew Lewer) on securing and leading it.
Before I came to this place, for 27 years I practised as a chartered surveyor in Suffolk and Norfolk. Much of my work focused on the small and medium-sized house building sector, helping to secure planning permissions for sites and then selling them. Today, my interaction with the sector is less direct, although the conclusion I have reached is that it is now in a far less healthy state than it was. Some might say it is fighting for its very survival, and everyone in every area is far worse off for that.
It is important to highlight the advantages of a vibrant SME house building sector. Those businesses not only build much-needed homes, but do so with ingenuity, providing well-designed and bespoke properties, often on sites that present construction challenges that larger house builders shy away from. As they are deeply embedded in the local communities where they live, they have a sense of pride in the homes they build, which enhances the local street scene. They also have a significant positive impact on the local economy. They employ apprentices, engage architects, buy from local builders’ merchants and work with other local businesses such as electricians, plumbers and landscape gardeners.
At a time when we need to be boosting economic growth, there is an urgent need for a vibrant local SME house building sector right across the UK. Against that backdrop, it is concerning that the sector is not in rude health. In March, a report commissioned by the House Builders Federation, in partnership with Close Brothers Property Finance and Travis Perkins, found that planning delays and rising costs are crippling SME house builders. The conclusions are stark. Securing planning permission is the major barrier to growth. Those house builders cannot find sites. Local authority staffing shortages are exacerbating the problem. Rising material and energy costs are also a major concern. As we have heard, more than two thirds of the house builders are impacted by the nutrient issue, which has stricken development in over a quarter of local authority areas in England.
Finally, the sector as a whole is unhappy with the Government’s current approach on housing. The SME housing sector in the north Suffolk and Waveney area is still there, but it is dwindling. The faces are getting older and more wrinkled, and there are fewer new entrants, with many put off by the three barriers of planning, access to finance, and the legal complexities and bureaucracy associated with running a building company.
On a daily basis, my inbox is full of emails from people looking for a home in which they can live securely and comfortably. I liaise with the local council, which invariably does its best to assist. However, local councils are not magicians. They cannot conjure houses out of nowhere. It is in that context that we urgently need to revive the SME house building sector.
That brings me to the solutions. I have several suggestions. First, we must ensure that there are sufficient sites available for SME house builders. There is a concern that the abandoning of targets for local areas could lead to a reduction in the number of sites coming forward for development. Although it is early days, it should be noted that the number of housing projects granted planning permission in the last quarter of 2022 fell below 3,000 for the first time since that dataset was started in 2006. The number of projects for which planning approval was obtained in the whole of 2022 was under 12,500, compared with 21,000 in 2017. That situation needs to be monitored closely, to ensure that there is not an unintended and undesirable consequence of this change in national planning policy.
Secondly, we must ensure that local planning authorities are functioning properly. That is not a criticism of planning officers, who invariably do a good job in difficult circumstances. We must ensure that planning departments are properly resourced and adequately staffed. The planning process must become more streamlined, and we must ensure that suitable sites are made available for SME house builders. In recent years, there has been a move towards developing large garden village-type developments on the edge of towns. Although they have the advantage, from a strategic planning perspective, of being better able to provide the necessary supporting infrastructure, they do result in SME house builders effectively being excluded from the market.
My third point is that, in many respects, one of the solutions to the problem is already there in the form of Homes England, which has the ability to make sites available and to provide development finance through the levelling-up home building fund. Will the Minister undertake to provide Homes England with the resources to increase its work in those two areas, which are major obstacles that confront SME house builders? There is also a need to encourage high street banks to be more responsive and sympathetic to their house builder clients. There may be a role for the British Business Bank to promote such an approach.
My final point is perhaps a left-field suggestion: the zero rating of VAT for conversion and refurbishment work, so as to put such projects on a level playing field with new build. It strikes me that that could solve two problems at the same time: the slow demise of the SME house building sector, which is the subject of this debate; and the decline of our high streets and town centres, which need revitalising and where there is an opportunity to reuse millions of square feet of accommodation, often above shops, right across the country. SME house builders will often start their careers doing conversion work before moving on to new build. This idea could encourage more people into the sector. I ask the Government to give it full consideration.
We have a housing crisis in this country. SME house builders on their own will not solve it, but in the current situation, with the sector in gradual decline, we are seriously restricted in our ability to provide all people with a place that they can call home. We must also have in mind the enormous benefits that a vibrant SME house building sector can bring to local economies. We must set out a route map for the sector, which provides people with the opportunity, in the first instance, to start a business, and then to progress it and perhaps move on to become a regional company and then, if they want to, a national house builder.
It is a pleasure to serve under your chairmanship, Mr Robertson. I thank the hon. Member for Northampton South (Andrew Lewer) for securing a debate about such an important issue, and it is good to see the housing Minister in her place today.
I have taken part in a lot of Westminster Hall debates about housing under this Government and spoken to a lot of different housing Ministers over the past decade—14, to be precise. Since 2013, we have had the former Member for Hertford and Stortford, Mark Prisk, who lasted 13 months; and the former Member for Keighley, Kris Hopkins, who lasted 10. Impressively, the right hon. Member for Great Yarmouth (Brandon Lewis) served a whole 24 months. The former Member for Croydon Central, Gavin Barwell, lasted 10 months; the right hon. Member for Reading West (Sir Alok Sharma), six months; the right hon. Member for Esher and Walton (Dominic Raab), six months; the right hon. Member for North West Hampshire (Kit Malthouse), 12 months; the right hon. Member for Tatton (Esther McVey), six months; the right hon. Member for Tamworth (Christopher Pincher) an unprecedented 23 months; the right hon. Member for Pudsey (Stuart Andrew), four months—back to normal business—the right hon. Member for Nuneaton (Mr Jones), nearly two months; the hon. Member for North East Derbyshire (Lee Rowley), nearly two months; and the right hon. and learned Member for South East Cambridgeshire (Lucy Frazer), three months. I welcome the hon. Member for Redditch (Rachel Maclean) to her role. She is already a veteran housing Minister compared to those on that list.
I am making the point that the Government cannot possibly expect to deal with a housing crisis while constantly churning through housing Ministers. How can they possibly run the country’s plans to build housing and meet targets if there is a new housing Minister, on average, every nine months? When we debate the important question of why small and medium-sized house builders are struggling, a reasonable person might think it had something to do with the fact that we have had 14 housing Ministers in 10 years.
I am having a great deal of fun doing this, as you can tell, Mr Robertson, but I want to be more constructive. In other words, I believe we should be taking on the big house-building monopolies. At the heart of why small and medium-sized building firms are struggling is that they cannot compete with a few huge firms that have the scale and monopoly power to keep them out of the market. The eight largest house builders build more than 50% of all the new homes in the country, and the latest research suggests that small builders now produce just 10%. That was not always the case. In the 1980s, small firms were responsible for around two thirds of new homes, but since 2007, the number of small and medium-sized house builders has halved.
The picture is similar in the housing association sector. Some 20% of housing associations account for 95% of all registered housing stock in the country. The top housing associations, known as the G15, dominate the London property scene and build one in four of all new homes in London. They house 10% of London’s population—that is one in 10 people in all homes, not just the rental market. The problem is that giant firms can buy land and sit on the asset for a number of years, whereas smaller firms do not have the funds for that and are much more likely to go out and get planning permission quickly so they can develop. To encourage those kinds of firms, we need to prevent the few large developers from dominating the market. We need to give smaller firms the planning support and access to finance that will give them a chance to compete.
Much is being said about the green belt, but not all green belt is green. I do not mean the genuine rolling fields, ancient woodland or areas of substantial natural beauty. I am talking about the car washes, the waste plants and the scrubland that no one would ever dream of calling green. There are 19,334 hectares of unbuilt green belt land within a 10-minute walk of a London train station, where there is enough space for 1 million new homes. We should be building affordable, good-quality homes on the land. Our best national estimates show that around 1.6 million households are waiting for social housing. Over the past 40 years, the overall social housing stock has declined by 1.4 million homes. We have a shortage of homes in this country and we cannot afford to prevent developments on land that is not really green.
Previous speakers have already referred to housing targets. We all remember when the target of 300,000 new homes was scrapped. The Government gave in and scrapped mandatory house building targets for local authorities. It is incredibly important to bring them back, and I am glad that the Labour Front Benchers have committed to doing just that.
The Government might think that they are keeping nimbys happy and protecting local authorities, but I would like to give them some advice. They are betting current political support against the future. Current estimates suggest that only a third of the children born today will ever become homeowners. The English housing survey says that the proportion of homeowners aged 45 to 54 fell from 74% in 2009-10 to 65% in 2021-22, and it is estimated to fall to 30% in the year 2070. For young people aged 25 to 34, home ownership has fallen from 70% in the mid-1990s to 40% today.
We must deal with land bankers. In 2019, the FTSE 100 house building companies were sitting on land banks of more than 300,000 plots between them. If we add the FTSE 350 house building companies, the collective land bank was a staggering 470,068 plots, and yet those companies completed just 86,685 homes in the previous year. Where is the punitive or preventive action to prevent this from happening? It is not the small and medium-sized firms that are doing this. Barratt Homes is Britain’s biggest land banker, and as of 2020, Barratt owned 80,324 land bank plots. Second on the list is Taylor Wimpey, which owns 77,000 land bank plots, and third is Persimmon, with 67,205.
I do not blame Barratt or Taylor Wimpey or Persimmon. I blame the Government for creating an environment where it pays to leave land empty and undeveloped. The job of a private property developer is to make money. That is what we expect of a private business. The job of the Government is to ensure that the houses that are needed are built.
Let me turn to Help to Buy. I did think, “Dear God” when I read that the Government might be thinking of bringing back Help to Buy, which they sold to us as an equity loan to help first-time buyers get cash together to get on the housing ladder. Along with so many other policies, the most well-off have benefited the most. Instead of opening up home ownership to the next generation, all the scheme has done is to speed up slightly the purchase date for people who were already likely to buy, often via family help. More people on high incomes—those earning more than £80,000—have used the Help to Buy scheme than lower earners.
The main effect of Help to Buy has been to inflate house prices and give very large bonuses to chief executives. The best example is, of course, Jeff Fairburn of Persimmon, who got a bonus of more than £100 million when the company’s sales had been 50% financed by Help to Buy, or the British taxpayer.
Whatever we have been doing as policymakers, it is clearly not working. Home ownership is lower than it was in 2003. On the current trajectory, it is unlikely to increase. Since the Conservatives came into power, 800,000 fewer households under 45 own their home, and nearly 1 million more people are renting. Fewer than 7,000 social homes were built in England last year, and 1.6 million households are waiting for social housing. Over the past 40 years, the overall social housing stock has declined by 1.4 million homes.
Big numbers often mean very little, but I will talk about my borough of Merton, which is a small, outer London authority. In the last year, we have had 72 two-bed, 34 three-bed and two four-bed properties to let, with 10,000 families on the waiting list. That tells me that we are not building enough new homes or doing enough to encourage new developments. The dominance of huge building firms, and the decline of small and medium-sized builders, is part of that story. We need to do something different, and we need to do it now.
It is a pleasure to serve under your chairmanship, Mr Robertson, and I thank my hon. Friend the Member for Northampton South (Andrew Lewer) for securing the debate. I know him to be very knowledgeable on this subject, as we have heard today.
The biggest obstacles to the delivery of available housing with planning permission are Natural England, the Department for Environment, Food and Rural Affairs and the issue of nutrient neutrality. The Home Builders Federation has said that nutrient neutrality is responsible for the putting on hold of at least 120,000 new homes with planning permission in more than 74 local authorities, with an estimated 41,000 more homes not coming forward every year. Two thirds of SME builders have said that nutrient neutrality will be a barrier to increasing housing delivery over the next 12 months, so I share the grave concerns expressed by many in the industry about the practicality of the Government’s proposed approach to tackling this issue.
The basis for nutrient neutrality is fundamentally flawed, first, because the causes of high nutrient levels in rivers are agricultural run-off, the pumping of sewage into rivers and the failure of water companies over many years to upgrade their infrastructure to tackle the problem. Secondly, the contribution of new homes to the problem is very small in comparison with other causes, but the impact on building the homes our country needs is huge. Thirdly, new homes are more environmentally friendly and sustainable than old homes. New homes are more water efficient, so they can help to address these sorts of problems. There is absolutely no need to ban them. For Natural England to ban new homes is like the Department for Transport banning or taxing electric cars because of concerns about air pollution caused by dirty old lorries and smoky diesels. It is the wrong target and the wrong policy. It undermines rather than supporting important environmental objectives, it undermines growth and it undermines the Government’s housing targets.
Added to the Natural England fiasco is the fact that DEFRA now plans to let water companies decide whether developments can go ahead at all and whether to connect to new developments. Research has demonstrated time and again that smaller house builders find it hardest to get water and other utilities connected, compared with the larger house builders. Areas with historical underinvestment in water connections are more likely to be in regional markets where SMEs can thrive. There is, therefore, a concern that the approach to nutrient licences and permissions, and the reversal of the current legal requirement for water companies to connect where requested, will favour larger builders over smaller ones, and more affluent areas over less affluent ones. It could be yet another barrier for the SME house builder, because although big companies can focus on land and sites outside the affected areas, an SME is more than likely to be focused on its local area and will not have that option. In effect, we are shutting down its entire business.
Let us be clear: DEFRA’s actions damage all housing delivery, and we cannot have one Department undermining the effectiveness and delivery of another. I ask the Minister whether we can meet urgently to discuss this issue further.
I am grateful to my hon. Friend for raising the subject of nutrient neutrality. I have a constituent who is a small house builder, as were his father and grandfather. He runs a business and employs people, and he has done so for many years. He went bust during the crash in the late noughties—2009 or 2010—but he is back on his feet and building more houses. He came to see me last February to talk about the fact that despite having spent £750,000 of his own money on building a road under a section 106 obligation, which he had met, he has been told that he cannot finish his work. Is that not the problem? Do we not need to be supporting such people?
My hon. Friend is absolutely right to say that we need to support SME house builders.
In addition to the problems with planning, it is very difficult for smaller builders to grow, so I will end my remarks by looking at growth. Very often, the discussion around small and large house builders can divide one against the other—we have heard elements of that today. As with the supermarkets and the village shop, we need a range, not one or the other. We need all players in the market. Policy in this area must provide more support to SMEs. It must also make sure that we have the transition, growth, productivity, ambition and delivery that allow an SME to become a larger player.
In my discussions with the late Tony Pidgley of Berkeley Homes, we often discussed the nature of the house building market. Tony started his company in 1976, building and selling just four homes. He often said to me that it would be near impossible for him to achieve such a level of success today—to go from having a single site and a handful of homes to being a massive house building giant. We need to reflect on that and ensure that policies support the building up and transition of smaller to larger companies, and the successful reshaping of larger to less large where that is appropriate for a business. I hope the Minister will address that.
It is vital that we once again make the positive case for appropriate housing in our communities, to support regional jobs and skills through SMEs, and to provide more environmentally sustainable homes to sustain better life, education, health and happiness outcomes for all of our constituents. Housing can be a real force for good. We must do more to support smaller builders.
We need to leave two minutes at the end for the mover of the motion to wind up, so we have up to 10 minutes now. I call Chris Stephens.
It is a pleasure to see you in the Chair, Mr Robertson. I congratulate the hon. Member for Northampton South (Andrew Lewer) on securing this debate. I note that he chairs the APPG for SME house builders, and I look forward to its report. He touched on some of the issues, but I look forward to the report being published so that it can create a wider discussion around the issues facing SME house builders. The hon. Gentleman set up the APPG in reaction to the UK Government’s goal of delivering 300,000 houses a year.
Another issue that will be familiar to the hon. Gentleman and others, and which it is useful to mention as background, is cash holdings. Cash holdings have a greater significance for SMEs than they do for larger house builders, because they represent a much higher proportion of a company’s equity. As a result, SMEs have greater exposure in the early stages of development. The costs associated with land purchase, infrastructure and groundworks must all be funded before the developer can see some balancing of the debt from sales revenue. SMEs do not have the financial firepower of the volume builders, and often they cannot acquire even small sites to put into a land bank because any funding so committed does not earn an immediate return.
Scotland is leading the way in delivering affordable social housing across the UK, and Scotland supports SMEs. We must recognise that the increased cost of finance from interest rate rises following the crashing of the economy is particularly troubling for the cash flow of SMEs and house builders. There are wider challenges, and the context has to be considered, but the UK is one of the few major economies—including Russia, incidentally —to shrink in 2023. Wages next year are projected to be the lowest since 2006, and the inflation rate was the worst in the G7 last year.
There are also problems in relation to Brexit and the resulting lack of business investment. The knock-on financing issues and mortgage price increases have consequences for house buyers and builders alike. Other issues must be raised on behalf of not just SME house builders, but SMEs across the board. Research by the Federation of Small Businesses has shown that more than half of SMEs across the UK suffer crippling cash-flow issues as a result of the late payment of invoices. The figures show that over 18 months to two years, almost half a million businesses went bust because of that very issue.
Last year, the Federation of Small Businesses warned that one in 10 Scottish firms had reported that late payment was threatening the viability of their businesses. With the increased cost of credit, through higher interest rates, the effective cost of late payments is higher than ever.
I note that my hon. Friend the Member for Dunfermline and West Fife (Douglas Chapman) recently hosted a roundtable here in Westminster with accountants to tackle the issue of late payment, because at present the UK Government’s voluntary prompt payment code recommends that SMEs are paid within 30 days but we need to see more being done in practice, rather than small firms having to wait 60, 90 or even 120 days for payment from big firms. I hope that the Minister can tell us what discussions she has had with her colleagues to ensure that SMEs—not just SME house builders, but SMEs across the board—are being assisted, and that she can also say what action the Government are taking to ensure that SMEs do not suffer from late payments.
Despite the challenges of austerity, Scotland’s five-year, £3.5 billion commitment on the affordable housing supply programme remains. There will always be peaks and troughs of investment as we move towards that goal. The Scottish Government have put in £752 million of investment for 2023-24, which represents progress towards meeting the £3.5 billion pledge. In the most challenging Budget settlements that we have had, the Scottish Government are providing £13.5 billion in the 2023-24 local government finance settlement, supporting local authorities and communities to meet their housing needs and homelessness targets.
Scotland continues to be a good place to buy a first home, with the average first-time buyer spending around £100,000 less for a property than in England. That situation will be familiar to those us who are elected as Members of Parliament, when we arrive here and look at the property prices in London as we try to rent somewhere. We walk past an estate agent and see what we would consider to be a premiership transfer fee, but in actual fact it is the price of the property. That scenario will be familiar to those of us who are Members of Parliament from outwith London; it is one of the challenges that faces us when we arrive here.
The latest statistics show that 22,905 new build homes were completed in Scotland in the year ending September 2022, providing people in all sectors with warm and secure homes. Scotland has also led the way in delivering affordable housing and social housing across the UK, with more than 118,000 homes being delivered since 2007.
As the hon. Member for Westmorland and Lonsdale (Tim Farron) said in his remarks, it is also important that it is the right type of housing that is delivered. It is important that what is built is affordable, is for social rent and is in affordable home ownership. I can tell him that of the 50,000 affordable homes completed in Scotland, 69% are for social rent, 12% for affordable rent and 19% for affordable home ownership.
In conclusion, Scotland has a good story to tell. We have to ensure that the challenges that house builders have faced through the pandemic and in the current economic situation are met, and that we also demonstrate and learn from Scotland’s collaborative approach to its housing partnerships, social landlords, local authorities, community bodies and construction sector developers.
It is a pleasure, Mr Robertson, to serve with you in the Chair. I congratulate the hon. Member for Northampton South (Andrew Lewer) on securing this important debate and I commend him for the thoughtful remarks with which he opened it. I also thank the hon. Members for Waveney (Peter Aldous), for Dover (Mrs Elphicke), and for Westmorland and Lonsdale (Tim Farron), as well as my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh), for participating in this afternoon’s debate.
As has been noted several times during the debate, including by the hon. Member for Northampton South himself, the decline of small and medium-sized house builders is a long-term trend that is widely recognised as having a negative impact on the supply, location, quality and design of new homes across the country. There is broad agreement, both on the barriers that SMEs face and on the fact that more must be done to support them and increase competition in the house building market.
Members on both sides of the House have been ruminating for years—certainly for the eight years that I have been here—about the predicament facing SME house builders and about the fact that the progressive consolidation that has occurred at the top of the market and the consequent over-reliance on an alarmingly small number of developers are themselves symptoms of a broken housing market. However, relatively little progress has been made in recent years in arresting the decline of SME house builders and diversifying the industry more generally—for example, by markedly expanding the self-build, custom-build and community-led housing sectors. Opposition Members would argue that the lack of progress reflects at least in part the limited nature of the Government’s interventions. Although we readily acknowledge that they have introduced various initiatives to support SME house builders—including the development finance provided through the levelling up home building fund, which the Minister may point to in her response—taken in the round they have been somewhat piecemeal.
The fact is that the Government could do more in the short to medium term to tackle the various constraints facing SME house builders. The Department could direct Homes England to give even greater weight to quality over cost in development appraisal to increase the chances of SME house builders winning bids, or it could consider extending strategic partnership funding to select SME house builders to assist them in aligning affordable sales with output, rather than forcing them all through the continuous market engagement route.
Given that access to land is a key barrier facing SME house builders, the national planning policy framework could be amended to ensure there is a clear expectation on local planning authorities to demonstrate which sites under 1 hectare within their boundaries will be allocated for development to ensure that their 10% requirement is met. That would provide a firmer basis for SME house builders to invest in and build on those sites. The Government could explore replicating across England London’s Small Sites Small Builders programme, which makes it easier for public land owners to dispose of small sites and match them with SME house builders. The hon. Member for Northampton South rightly pointed to that scheme. Given the challenges that SME house builders face, particularly at present, I hope the Minister will not merely recite past measures but will tell us about further measures that the Government are exploring to support them.
However—there is a however—as welcome as any further measures would be, targeted interventions are likely to make a difference only at the margins. The fundamental dynamics of the system as currently constituted make it almost impossible for SME house builders to thrive and grow. A slow and somewhat uncertain planning system, high land prices and a persistently volatile housing market combine to disadvantage SME house builders and advantage mainstream volume builders with deep pockets, extensive project portfolios and large development site pipelines. In boom years, SME house builders struggle to compete with the volume developers and their speculative business model. In hard times, many simply go bust, with the net result that with every successive downturn, the industry as a whole becomes more homogenous. That is why recent developments are so concerning.
There is broad agreement that the UK has entered another housing market downturn, sparked by what looks likely to be a prolonged period of high inflation and high interest rates. That downturn will manifest itself in a variety of ways, but it will almost certainly include a softening of house prices and a consequential slowdown of house building. On top of that, as several hon. Members said, decisions made by successive Conservative Administrations over recent years will exacerbate the slowdown. The period of sustained planning policy uncertainty since the publication of the 2020 “Planning for the future” White Paper and the chilling effect of the proposed revisions to the NPPF on local plan preparation and the planning consent pipeline have combined to further suppress house building rates.
Faced with the end of Help to Buy, softening house prices and rising construction, material and labour costs, many of the volume house builders are already retrenching and mothballing sites. With higher profits, lower levels of debt and substantial cash reserves, they are arguably far better placed than they have ever been to weather the downturn and wait for house prices to recover. SME house builders are in a much more vulnerable position. We face the real prospect that the gloomy economic outlook and the sharp rise in the base rate and borrowing costs will further entrench the dominance of the small number of volume house builders. A Government that are serious about not only arresting but reversing the structural decline of SME house builders will need to confront the fundamental reasons why the housing market, as currently constituted, makes things so difficult for them to compete. In our view, that ultimately means Government being prepared to accept greater responsibility for development outcomes and ultimately being prepared to deploy the unique powers available to them to ensure that quality place making and long-term value creation—in other words, a stewardship approach to development—become the norm, not the exception. It means, for example, far greater use of the master development model to de-risk large sites and sell phases or parcels on them in a way that creates far more opportunities for SME house builders.
Those SME house builders desperately need those opportunities and, as a country, we need a greater focus on doing what is necessary to provide them, not just because of the contribution that SME house builders make to our economy and communities, in all the ways spoken about by the hon. Member for Waveney, but because—as the hon. Member for Northampton South said—we will never be able to build the volume of houses we need across England without a thriving and sustainable SME house-building sector.
If we are to avoid a further decline in their number over the coming years, SME house builders require greater support now, and Labour encourages the Government to give serious consideration to further short-term measures that can help them weather the downturn. We are also clear that if we are to reverse rather than just arrest the structural decline of SME house builders over recent decades, tinkering around the edges will not be enough. I agree with my hon. Friend the Member for Mitcham and Morden: we absolutely need to do something different. What is ultimately required is a Government that not only accept that SME house builders will never thrive in the current broken housing market, but that are willing to reform it to create the conditions in which they can. That is precisely what Labour intends to do if the British people give us the chance to serve after the next general election.
It is a great pleasure to serve with you in the Chair, Mr Robertson. I thank my hon. Friend the Member for Northampton South (Andrew Lewer) who, in his customary fashion, has delivered an excellent and incredibly comprehensive speech. It was measured and balanced. He reflected his considerable expertise and experience across his many years, both in this place and elsewhere, serving his constituents and this industry. We are all fortunate to have the benefit of his experience.
I welcome the debate and the opportunity to talk about these vital issues, on which I think there is actually more agreement than disagreement. That is not always the case in this place. I look forward to reading the report of the APPG—I thank my hon. Friend the Member for Northampton South for his work on that—and the recommendations on SME finance. I know that it will have taken considerable work to pull together the views of 200 people, and I for one will be looking at that with great interest. I thank all other hon. Members, and I will come to their remarks before I finish speaking.
The Government fully recognise the importance of SME house builders, and we are committed to ensuring that SMEs survive and thrive. We all share that objective. In case of any doubt, I will confirm that we support this critical part of the housing market and set out what we are doing to help SMEs now and in the future. We know and recognise that our thousands of small and medium-sized house builders are one of the driving forces for our mission as a Government: levelling up the whole country. They play a vital role; they build out the majority of smaller sites; they make an important contribution to new supply; and they help to densify urban areas. They supply the workforce and subcontracted labour for larger firms, and deliver a sizeable amount of the training.
They also help to diversify the market by raising competition and ensuring that consumers have choice. They are important in delivering self-commissioned homes. I will come on to speak about some of that work—it is good to see my hon. Friend the Member for South Norfolk (Mr Bacon) in his place. We therefore support the expansion of the self and custom-build and community-led sectors. Recognising that important role, we helped the construction industry to make it through the choppy waters of the pandemic, but we now want to help them thrive into the future.
We have talked about how the number of small house builders is trending in the wrong direction. They used to account for as much as 40% of new homes in 1988 and, unfortunately, their market share has declined considerably. It is a challenging time, and this debate has highlighted the sheer range of challenges they face, from navigating the planning system and a lack of available and viable land to finance and materials shortages. There are longer term challenges, such as accessing labour with the right skills and the transition to net zero. SMEs are particularly vulnerable to demand shocks. Their lower financial resilience and access to capital means that costs, delays and uncertainties associated with the planning system can inhibit their businesses. We want SMEs to play their part in the long-term supply of housing and operate in a competitive and healthy market.
We all know the challenges, but what are the solutions? I will touch on a few things we are doing now and will do in the future. On access to finance, we have put in place a range of financial measures to support SMEs and encourage systematic change in the lending environment. To make it easier to access development finance, we extended our commitment to funding SMEs through the levelling-up home building fund, which provides an additional £1.5 billion in development finance to SMEs and will help them to deliver 42,000 homes. The vast majority of that money has been spent outside of London and the south-east.
The fund follows the success of the over £2 billion in development finance that was made available under the home building fund, which is expected to deliver over 60,000 homes when all the works have been completed. It has involved over 400 projects across the country and has helped SMEs to enter the house building sector, grow their businesses and deliver more homes. Our support does not stop there. Our £1 billion ENABLE Build guarantee scheme has increased the amount of borrowing available to SME house builders. So far the Department has guaranteed nearly £350 million in loans to SME house builders, increasing the amount and variety of lending available to the sector.
My hon. Friend the Member for Northampton South (Andrew Lewer) highlighted that delays from state bodies are hindering access to finance. I am also very concerned about that, and I would be happy to work with him on any specific issues he has heard of and tackle them directly. He also mentioned the Land Registry, which despite unprecedented demand has continued to deliver essential services. We recognise that speed of service is a top priority. This is being addressed urgently through a combination of recruitment, training, tactical deployment and automation. The Land Registry is working with partners across the market to enable digital conveyancing and co-create a simpler, paperless and quicker process for buying and selling property that will benefit home owners across England and Wales.
Nutrient neutrality has been mentioned by a couple of speakers, most notably my hon. Friend the Member for Dover (Mrs Elphicke). We are clear that nutrient neutrality can only be an interim solution, for all the reasons that she and other Members have set out. We are committed to removing barriers to house building and releasing stalled developments as soon as possible by addressing pollution at source and boosting a supply of mitigation.
The Levelling-up and Regeneration Bill will place a new statutory duty on water companies in England to upgrade waste water treatment works in nutrient neutrality catchments by 1 April 2030. The upgrades to treatment works will address a significant source of pollution and reduce the cost of mitigation for developers. It is regrettable that we see stalled developments. That is why we have worked with the Treasury and been able to open a local nutrient mitigation fund following the spring Budget. That will unlock more housing delivery by boosting the supply of mitigation being delivered by local authorities.
I want to turn to planning reform, because that is the real meat of the issue for many Members. This is a major area of focus for us in Government. It is not an easy task, and I will not pretend that it is, but this is the whole thrust of the work that is taking place through the Levelling-up and Regeneration Bill. The impetus for the Bill is to reform planning and support SMEs to build more homes by making the planning process easier to navigate, faster and more predictable. We want it to reduce delays and costs for house builders. The national planning policy framework already includes policies to support SMEs. For example, it sets out that local planning authorities should identify land to accommodate at least 10% of their housing requirement on sites no larger than 1 hectare.
My hon. Friend the Member for Northampton South mentioned in our Public Bill Committee sessions that the existing small sites policies were not effective enough in supporting the housing objectives and that they should be strengthened to support the development of small sites, especially those that will deliver high levels of affordable housing. That is why we agreed to consult on our approach to updating the NPPF.
We invited views on how the policies could be strengthened to encourage greater use of small sites, which play a really important role in delivering gentle urban density and in supporting SME house builders. The consultation ended on 2 March. We are considering the responses that we received and we will publish an update in due course. I would be very happy to speak to my hon. Friend in more detail about some of that work. We have also recently closed our consultation on proposals to increase planning fees to help improve the performance of local planning authorities.
Planning changes will not happen overnight. We are listening and our aim is to reduce delays and costs for house builders, which disproportionately impact SMEs. That will allow SMEs to get on with doing what they do best: delivering the homes and communities that our country needs and wants.
The tone of the hon. Member for Greenwich and Woolwich (Matthew Pennycook) was constructive. There are areas on which we can find ideas from all across the House. We are already doing most of the things that he suggested. He talked about the fundamental dynamics of the housing market and the problems they cause. Those problems are precisely the reason why we are making changes through the Levelling-up and Regeneration Bill and the NPPF.
I want to talk about housing numbers. Members referenced the removal of the direct mention of housing targets. We remain committed to building 300,000 houses a year. That is a manifesto commitment, and is what we should be doing across the country. The system we had before was evidently not delivering those houses in the right places, which is why, through all the careful work that I do not have time to reference, we are making planning reforms. If the Labour party is determined to scrap those planning reforms, it will find that house building will decrease, not increase.
I thank my hon. Friend the Member for South Norfolk. He is the self-commissioned homes man, and the Government agree with him. We believe that self-commissioned homes, including those that are self, custom built and community led, are crucial in diversifying the market and delivering the homes that this country needs. We have made some great progress thanks to my hon. Friend, including through launching the £150 million Help to Buy equity loans scheme and making changes to his Self-build and Custom Housebuilding Act 2015 through the Levelling-up and Regeneration Bill, to ensure that it works better. We have established the self-commissioned homes delivery unit in Homes England, taking forward a number of his recommendations.
I thank the hon. Member for Westmorland and Lonsdale (Tim Farron). He will know that we are making those changes to planning permission and also introducing a register of short-term lets. We are consulting on those changes right now. The Government agree with him on those points.
My hon. Friend the Member for Waveney (Peter Aldous) highlighted a number of challenges in the sector. I thank him for bringing his considerable experience to the debate. He talked about the levelling-up homes building fund from Homes England. If he has specific ideas about how we can improve that, I would be happy to hear from him.
My hon. Friend the Member for Dover is a brilliant champion of house building and brings considerable experience to this debate, both from her previous time and her time on the Committee. I am happy to meet with her about the nutrient issue and anything else.
The hon. Member for Mitcham and Morden (Siobhain McDonagh) spoke about the lack of social housing and affordable housing in London. Housing in London is delivered by the Labour London Mayor. That is his responsibility. Billions of pounds of taxpayers’ money are devoted to grant funding. He is responsible for planning, for the sites that she mentioned and for releasing green-belt land, if he chooses to do so. I ask her to take her comments to him.
I thank colleagues from across the House for such a vital debate. I am pleased that we have been able to properly discuss these vital issues. Mr Robertson, I think you can see that, taken together, the measures that we are introducing will deliver a brighter future for the sector. Many of the things that I have spelt out are long-term ambitions. I am sure that Members will understand that these things do not happen overnight. We need to work with all actors across the sector. We must listen carefully to their views, which are the result of lifelong experience. I am sure that they will be the first to criticise if we introduce things in a rush. Our changes will not always be headline grabbing, but we are determined to introduce them. We want SMEs to play a major role in the house building sector and in supporting our housing objectives. We want them to be the centrepiece of our efforts to level up and diversify the market, and to bring opportunities to parts of the country that have long been deprived of them.
I thank all colleagues for their contributions and the Minister for her comments. She is one of the most committed and hard-working MPs and Ministers; it is right that she has an unbelievably complex brief, because she will need all that application. I am grateful for her offer to meet and talk about self-build, the Land Registry—and perhaps unique property reference numbers within that—and the small sites work. Even if we do not meet a target of 300,000, that does not mean that having the target was not worth while.
I thank the hon. Member for Greenwich and Woolwich (Matthew Pennycook)—one report on Homes England is coming his way. I thank the hon. Member for Glasgow South West (Chris Stephens)—one report on access to finance is coming his way. My hon. Friend the Member for Dover (Mrs Elphicke) covered the nutrient issue brilliantly. The contribution of the hon. Member for Mitcham and Morden (Siobhain McDonagh) suggested some interesting late 19th-century USA references to Standard Oil and monopolies, and that not being an anti-market mechanism but a pro-market mechanism on occasion. She had some well-made points about the green belt not being green, and there being some more potential there than some people would like.
On the contribution of my hon. Friend the Member for Waveney (Peter Aldous), who discussed and suggested this debate to me, yes, Homes England and access to finance for SMEs are important. I have been urging the Government to drop VAT for conversion and existing property work as well as new builds, and I am glad that he agrees. There is a benefit for heritage. The Treasury needs to make a change, which DLUHC could work on, with regard to pension provisions for non-residential properties that could add residential properties above retail premises, so that there is some flexibility there.
Finally, the hon. Member for Westmorland and Lonsdale (Tim Farron)—I can say that even more emphatically than before—made some very interesting points. One that he touched on, which is worth exploring, is the problem of having a constituency with a national park, where all the housing requirement used to be the same but it all had to be lumped into the area that was not within the national park boundaries. That is something that we could explore profitably in the future.
This was an excellent, proper debate—a discussion of issues rather than just sloganizing; we need that for an issue as complex as this one. I am delighted that we have had the debate and aired the issues so thoroughly.
Question put and agreed to.
That this House has considered the future of small and medium-sized housebuilders.
East Coast Main Line Funding
I will call Catherine McKinnell to move the motion and then the Minister to respond. As is the convention for 30-minute debates, there will not be an opportunity for the Member to wind up at the end. I call Catherine McKinnell.
I beg to move,
That this House has considered funding for the East Coast Main Line.
It is a pleasure to serve under you as Chair, Mr Robertson. I am grateful to have been granted this debate, because the east coast main line is one of the country’s most strategic transport routes, carrying 80 million passengers on their journeys every year, and £30 billion of freight. Stretching from London to Inverness, it provides connections the length of the east coast of our island—from Scotland to the north, the midlands and London—and all the way back up again.
One third of the UK population lives within 20 minutes of an east coast main line station. The economies in those communities create almost 50% of the UK’s economic output. The economic importance of the east coast main line is clear but, shockingly, this vital strategic rail line last saw major investment when electrification was completed in 1991. I asked for this debate to speak on behalf of the all-party parliamentary group on the east coast main line, which I set up and chair in Parliament. We campaign together on improving passenger experience, capacity and reliability, as well as economic growth and the huge potential that could be unlocked in the areas served by the east coast main line.
In the short time we have today, I will outline who is served by the line, its current shortfalls, and look at some of the details of the Government’s integrated rail plan. I have questions for the Minister that I hope he will be able to answer. Unfortunately his colleague, the hon. Member for Bexhill and Battle (Huw Merriman), the Transport Minister of State, could not be here, but I hope he will be able to reply following the debate, if the Minister here does not have all the details to hand.
The east coast main line is of huge importance to the region that our group represents. We represent the entirety of the east coast main line, and it serves huge purpose to my region of the north-east. I must declare that I am wearing two hats: I am here for the line as whole, for which I will make the case, but I cannot help also making the case for the north-east, as it is of such strategic importance to our region. It is the first and last leg of journeys to and from the north-east to almost all other parts of the country.
Increasing capacity on some of the bottlenecks, particularly in the north-east, is vital, not only for serving the people in my region but freeing up those bottlenecks for the whole line. The consortium of east coast main line authorities—a cross-group of local authorities, combined authorities and Scottish regional transport partnerships—has produced an east coast investment prospectus. I believe the Minister has received a copy, and I am sure he has read it in advance of today’s debate.
The prospectus describes how the route supports current and emerging industries along its length, and the investment that will be needed to future-proof the route to ensure it will be able to meet those challenges and, even more importantly, take advantage of all the opportunities that will arise from major rail investment projects in the pipeline. The consortium is currently looking at research on changing patterns of travel on the east coast main line; the opportunities for freight, including parcel freight; and the amenities at the different stations along the east coast main line. The all-party group looks forward to working closely with our partners in local government, campaigning for investment on the line.
Any user of the east coast main line knows that we have seen challenges of delays and cancellations. Those are caused by capacity constraints and infrastructure shortcomings. Frankly, they hold back the line’s ability to grow its passenger market. Research undertaken by the consortium of east coast main line authorities found that, if the number of delays over 10 minutes were halved, it would deliver an additional £62.8 million a year to the wider economy, and more than £600 million over the next 10 years. That is economic growth that our country clearly needs.
The line is also particularly prone to major incidents that cause the service to stop running for long periods. That lack of resilience is often evidenced in major overhead line dewirement, but can also be associated with other issues, such as signal failures. We all dread the messages telling us that trains have been cancelled or delayed, or, worse still, have disappeared altogether because the infrastructure is just not there to support the beautiful new fleet of Azuma trains running up and down the east coast main line. When major disruption occurs, it has a huge impact on long-distance passengers, who are sometimes forced to abandon trips altogether, or to make alternative plans. Most concerning is that, if it happens too often, those travellers make permanent alternative plans. That is not only bad for the economy, but for our environment, too.
While the impact of poor performance costs us a substantial amount each year, it is difficult to get a complete picture of the status of planned enhancements to improve performance on the east coast main line, or anywhere on the UK’s rail network for that matter, because the Department for Transport’s rail network enhancement pipeline, which is supposed to set it out, has not been updated since October 2019. The pipeline that was supposed to relate to Network Rail control period 6—I am getting a bit rail technical here—ends in March 2024, so publishing that now would not serve much of a purpose. The Government’s integrated rail plan is the best indicator we have of infrastructure plans for control period 7, which runs to April 2029.
Speaking now as a Newcastle MP, I was hugely disappointed by the lack of ambition in the integrated rail plan. It concluded that the north-east should no longer be part of the High Speed 2 network or the Northern Powerhouse Rail core network, and declined to commit to finance the north-east’s key ambition of reopening the mothballed Leamside line—a transformational project that would provide a much-needed diversionary route for the east coast main line and connect communities in South Tyneside, Sunderland and Durham to the rail network.
I would like to make hon. Members aware that an all-party parliamentary group for the Leamside line was formed today. That line is hugely important in supporting the resilience and capacity of the east coast main line, as the hon. Member says. It is fundamental to have that resilience, particularly in the north-east of England, where we have too much line that is just one up and one down, so any issue means that we stop all connectivity on the entire line. We need to look at that.
The hon. Gentleman makes a good case on the Leamside line. I congratulate him on the group that has been set up today. He also clearly makes the cross-party case for investment in our rail infrastructure in the north-east and right across the country.
The Government have been clear that they do not intend to revisit the integrated rail plan, so those of us that want to see a step change in ambition need to keep making the case for an alternative approach. We would like to see what has been promised in the integrated rail plan actually delivered.
In the Government’s words, the IRP promises to provide a “significant package of upgrades” to the east coast main line, delivered in tranches to the mid-2030s. One of the most important is the aim to increase the number of trains per hour between Northallerton and Newcastle from six, as currently, to seven or eight. That very welcome project should go some way to improving the long-standing capacity issues between York and Newcastle on the east coast main line, but it is crucial that the package of interventions is funded and delivered as soon as possible—it cannot wait—especially as it would allow us to restore any pan-northern connectivity that may be lost with the expected addition of a third Newcastle to London service in the anticipated timetable changes, which I will come on to later.
We all saw the problems that happened the last time timetable changes were introduced—I think that was last year, although time moves on quickly. There are demographic changes happening, with the economic campus in Darlington, and there are changes at Darlington station, with an impact on to Durham. Both serve my Sedgefield constituents. It is important that we have a rail network in the north-east that can cope with freight and the fantastic Azumas, which are built in my factory at Newton Aycliffe, but also more local transport, which will get us back into a greener public transport situation.
The hon. Gentleman makes a good case and also leads on to some other issues, which I will outline in more detail. He succinctly makes the point that if we can tackle some of the bottlenecks on the line, get the right timetable in place and secure sustainable and resilient infrastructure, we can unlock so much potential in our region. I do not think we can shout that enough in the current climate, because we all need to see more growth in the economy, and we would particularly like to see it in our north-east region.
The hon. Lady is making a compelling case. As she knows, my constituency lies 50 miles off the east coast main line. Many other towns have benefited from services that have been added to the line, such as the Grand Central service to Sunderland and Hartlepool. I have been campaigning for many years to restore the direct service from King’s Cross to Grimsby and Cleethorpes. Such a service is vital, and it is supported by local businesses and the local community, so I hope the campaign the hon. Lady is mounting will support it. I am sure the Minister will convey my thoughts to the Rail Minister, who I have had many meetings with on this issue.
I thank the hon. Gentleman for demonstrating that this issue has cross-party support and that it is not all about the north-east. I cannot help speaking for the north-east because it is where I am from, but there are so many issues up and down the line. If an issue impacts one part of the line, it impacts all of us, so we are much very united in our desire to see a functioning east coast main line from London right up to Inverness.
The issue of station enhancement really highlights the length and breadth of our demands of the Government and our wish to see the integrated rail plan fully delivered. The plan talks about extending the four-track railway to end just north of Northallerton station, rather than just south of it. Station and junction upgrades are also mentioned for Newark, Doncaster, York and Darlington, but we do not have many details and we would like to see more from the Government.
Outside the integrated rail plan, the east coast main line is also getting a roll-out of digital signalling, known as the European train control system. It will go from King’s Cross to the south of Grantham, creating opportunities for greater flexibility in operation and enhancements in capacity. I am looking forward to visiting King’s Cross station with colleagues from the all-party group to see first hand how the system works.
Although I was disappointed with the overall level of ambition in the integrated rail plan, there are clearly important proposals that would benefit the east coast main line, and we all want to see them delivered. What we need to know from the Minister today is when they will happen. The Department for Transport is in the process of reviewing all rail projects, so the Minister will understand that there is considerable concern about the commitments made in the integrated rail plan and about whether any of those related to the east coast main line will end up being cut back or cancelled.
The plan puts a heavy caveat on the realisation of those enhancements, stating that they are all contingent on a successful business case, in line with the DFT’s usual appraisal process. In practice, that means there are no guarantees. We do not want warm words that are not delivered. We also really warn against a piecemeal approach to investment, because it just does not work. As the Consortium of East Coast Main Line Authorities has argued, we need to see the development of a pipeline of schemes to deliver against the plan, so that we have not just short-term benefits but medium and long-term ones, and we can build confidence in investment for the future. We need timely and firm commitments to fund those schemes, because that is the only way we will see genuine transformational movement forward on our national rail investment plans.
We would be really grateful—we appreciate that the Minister present probably cannot commit to this on the Rail Minister’s behalf, but we would like him to anyway—if the Rail Minister could meet the all-party group to discuss the issue in more detail. We appreciate that there is probably not the time today and that the Minister present may not be apprised of all the details, so we would like to hear from the Rail Minister about coming to meet with us as a group.
The hon. Lady is being very generous with her time. Does she agree that, rather than making purely economic cases, we must have full cognisance of the impact on the communities that are being served? I know that the Green Book is moving in that direction, but I think it needs as much help as it can get. Rather than focusing just on the overall economics for the country, we must be cognisant of the impact on the people receiving the benefit.
Absolutely. The way these things are calculated needs to be looked at as much as the calculations themselves. In the north-east we have long-standing challenges with the way investment decisions are made, and they hold us back from moving forward. We need to see forward thinking on where we put investment, so that it not only meets the demands of today but builds capacity and drives growth in our region for the future. That will then power growth all the way up from the south to the north and onwards to Scotland.
Going back to the bottlenecks on the east coast main line, the hon. Member for Sedgefield (Paul Howell) spoke of the Leamside line, which we would really like to see. We have seen the effective cancellation of the HS2 eastern leg and Northern Powerhouse Rail, as well as the mothballing of the reopening of the Leamside line. That has caused huge concern, and an all-party parliamentary group has rightly been established to create a strong cross-party voice here in Parliament.
The Leamside line is a nationally significant piece of infrastructure that would divert slow-moving freight from the east coast main line and free up much-needed capacity. The Government recognised the importance of the Leamside line in the north-east devolution deal, but we now need Ministers to get behind the campaign. The Labour party has committed to it, and we would really like to see that commitment from the Government.
In Scotland there are significant issues in accommodating levels of service between Edinburgh and Dunbar. Long-distance services pass through far quicker than stopping and freight services, so we need extra capacity on the line to allow faster trains to overtake slower freight and local services. The independent Union connectivity review, chaired by Sir Peter Hendy, was published 18 months ago, around the same time as the integrated rail plan, yet the Government still have not issued a formal response. When is that coming?
The integrated rail plan has a distinct lack of detail when it comes to enhancement south of York, aside from a reference to removing unspecified bottlenecks south of Peterborough. There are numerous issues here. Doncaster station is a major junction on the east coast main line, with a variety of local and long-distance passenger services and considerable volumes of freight passing through. The lay-out of the station hampers the number of crossing movements required. We would like to see commitments on that.
Another unresolved constraint is the Welwyn gap, where the railway reduces from four to two tracks between Digswell and Woolmer Green. This restricts service development and presents a reliability issue. Between Huntingdon and Peterborough, the track reduces from four to three, constraining capacity and impacting on reliability, often delaying already late-running services or services starting from Peterborough heading south.
Newark flat crossing is another long-standing bottleneck, where the east coast main line and the slower Nottingham to Lincoln line cross each other. It is the last remaining flat crossing in the UK. Some may enjoy the history of it, but it does create concerns as something of a relic, and it is entirely unique on our rail network. It is a severe restriction to the operation and planning of the east coast main line and limits the development of services on the Lincoln to Nottingham route. These bottlenecks are not going away any time soon. They will be put under even more pressure when we, hopefully, get the east coast main line timetable changes.
Consultations on a new east coast timetable took place in summer 2021, and it was supposed to be implemented in May 2022. It was designed to optimise the service to take full advantage of Network Rail’s £1.2 billion east coast upgrade and the new Hitachi-built Azuma trains. However, the proposed timetable created quite a lot of concerns, so we are stuck in a situation where we have these trains but are not maximising their capacity.
One challenge is the chronic lack of investment in the line, which means there are some really unwelcome trade-offs. Where some areas would undoubtedly benefit from the new timetable, others would lose out on a good deal of connectivity. There were a lot of concerns about the level of cuts to stopping services in Morpeth and Berwick. I appreciate the intention to pursue the timetable overhaul, but there have been few signs of progress since it was stalled in May 2022, and no revised proposals have been made public.
These are my questions for the Minister. Will the Department commit to delivering the integrated rail plan interventions for the east coast main line in full, and will the Rail Minister attend a meeting to discuss progress on that?
Why has the east coast main line timetable change stalled? What is holding it up? Is it funding issues? Are there currently enough trains to operate a revised timetable? Will the Government ensure that any further timetable changes are accompanied by an infrastructure plan that deals with the trade-offs that will be necessary with any long-term timetable proposals?
The east coast main line’s status as a fast, low-carbon route from London to Edinburgh is hugely important, so will the Minister tell us whether the Government plan to respond to the Union connectivity review and, if so, when?
On digital signalling, it is welcome that investment is going into the southern section of the line, with the business case proven. In-cab digital signalling is clearly the future, and Network Rail tells us that it is more efficient and cheaper than traditional alternatives, so does the Minister agree that any future renewals should not be like-for-like but should instead bring modern, digital signalling to the northern sections of the line?
In January, the strategic outline business case for the Washington metro loop, produced by Transport North East, was submitted to the Department for Transport. The Minister will be aware that that forms part of the wider project for the Leamside line, which we have already mentioned. Work on a more detailed outline business case for the loop has begun, so in line with the north-east devolution agreement’s promise of support will the Department commit to contributing financially to the development of the business case?
I would happily provide a summary of all my comments. I have spoken in quite some detail, and I really look forward to the Minister’s response. I will just say this in summary: we need an ambitious, long-term plan from the Government. It is not enough to make announcements; we need to see how they will be delivered on, we need to know when and we need to have the promise of funding that will see our east coast main line, from London to Inverness, fully functioning and meeting its full potential.
I would like to offer my thanks to the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) for securing this debate and for all the efforts and advocacy she has put into pressing the argument for investment in the east coast main line, in her role as chair of the all-party parliamentary group on the east coast main line. I am thrilled to hear the news from my hon. Friend the Member for Sedgefield (Paul Howell) about the creation of his own APPG, which feels like a very positive development as well.
I must, as the hon. Member for Newcastle upon Tyne North noted, extend my apologies on one front. It will not have escaped notice that, as she pointed out, I am not the Rail Minister, but of course, as she will also know, we try to play total football in the Department for Transport—if Neeskens is going in one direction, we want Cruyff to be heading off in the other one, and we try to do the same thing. At this moment, the Rail Minister is about to get on a train—on the east coast main line—to York to conduct an official visit. I hope the hon. Lady will recognise that commitment to the piece of infrastructure that she nobly champions. Nothing would be easier to do in his absence than the classic ministerial two-step of stitching him up by offering a meeting on his behalf. I am not going to do that, but I will say that I have no doubt that he will be scrutinising the proceedings in this Chamber very carefully and that he will want to act on them with his usual energy and dispatch.
Of course, as the hon. Lady mentioned, we have had an opportunity, in this discussion, to consider one of the most important rail arteries in this country. I am delighted to be able to set out the Government’s position and to respond to many of the issues that she touched on, including the integrated rail plan, timetabling and digital signalling.
Let me start by highlighting the east coast enhancements programme, which began in 2014. The Department and Network Rail are now in the very final stages of delivering that package of investment. When it is completed in 2024, it will, as the hon. Lady recognised, have seen £1.2 billion spent on improvements across the route.
That funding has delivered upgrades to track, platforms, signalling and junctions across the east coast main line, as well as essential improvements to the power supply. Specific examples of projects included in this wider programme of work include new platforms at Doncaster and Stevenage stations, improvements to the track layout at King’s Cross and a new rail junction at Werrington, near Peterborough.
The planning and delivery of such a wide-ranging set of upgrades was the result of close collaboration between the Department, Network Rail and the train and freight operating companies. As the hon. Lady appreciates, these are invariably complex matters.
That investment was delivered in conjunction with the £2.7 billion intercity express programme, which saw the roll-out of state-of-the-art Azuma trains across the east coast main line, with the last trains coming on to the route in September 2020. Each train in the new fleet has around 15% greater capacity than previous units and provides a significant change in accessibility, through increased numbers of wheelchair spaces and improved wi-fi and mobile connectivity.
The full benefits for passengers of both these significant pieces of investment will be realised, as the hon. Lady rightly recognises, only through the introduction of a new and recast timetable for the route. This had been scheduled for introduction in 2022 but was deferred to ensure that the views of passengers and local leaders, which were being captured through the public consultation, were fully considered. There is work under way at the moment with train operators to finalise the specification of a revised timetable that much more closely aligns with the views of stakeholders across the line of the route and that ensures that the running of the railway is fairer to the taxpayer. I know that there is every intention to deliver that revised timetable as soon as possible.
The east coast main line is due to be the first major route in the UK to benefit from digital signalling, which is another issue that the hon. Lady rightly mentioned. Approximately two thirds of signalling equipment on the southern section of the line is reaching its life expiry date and needs to be replaced. The east coast digital programme covers the section of the east coast main line running from King’s Cross to just south of Grantham and is the UK’s flagship digital signalling initiative, aiming to deliver a safer, more reliable and more resilient route. To date, the Government have committed more than £1 billion for the programme, which is expected to be delivered by the early 2030s.
To pick up the point the hon. Lady raised about the integrated rail plan, Members present will be aware of ambitious commitments for further east coast main line upgrades that are included in the integrated rail plan, which was published in November 2021. These plans aim to achieve further upgrades and improvements to line speeds, as well as upgrades to the power supply to allow for longer and more frequent trains, and to increase capacity on the route north of York. That would mean that journey times from London to Newcastle would be reduced by over 20 minutes compared to today and that those to York and Darlington would be reduced by around 15 minutes. A 20-minute journey time improvement would also be achieved for passengers travelling between London and Leeds. Passengers will also benefit from an increased number of seats, as well as from improved performance and reliability—unions permitting.
It is envisaged that these improvements will be delivered in three separate tranches of upgrades, starting in the mid-2020s and running up to the late 2030s. The Department has provided Network Rail with early-stage development funding to consider how these plans can be delivered as efficiently as possible in order to deliver maximum value for money to the taxpayer.
I am delighted to be able to confirm that improvements towards the north of the east coast main line are at a more developed stage of maturity and that they can and will act as early examples of the Government’s commitment to delivering on the aspirations of the integrated rail plan to improve the experience of passengers on the route. They include a package of enhancements at Darlington and York stations, as well as infrastructure upgrades at various other locations between Northallerton and Newcastle. Taken together, this programme of activity aims to allow an increased number of long-distance services to operate between York and Newcastle.
I hope that these planned funding commitments will provide reassurance to the hon. Lady and to other Members that the Government are acutely aware of the strategic importance of the east coast main line. The Department looks forward to continuing its engagement with the hon. Lady and the all-party parliamentary group on the east coast main line, and to engaging with the new APPG that has been unveiled for the first time today, as these ambitious plans come to maturity. I very much thank her for securing this debate.
Question put and agreed to.
[Relevant document: e-petition 633777, Give students who miss exams due to illness a right to Centre Assessed Grades.]
I beg to move,
That this House has considered centre assessed grades.
Although that is the motion, the debate might more precisely have been titled, “Giving young people with serious medical conditions the grades they merit, although too sick to sit exams, so that they have a chance to move forward with their peers.” I think we all recognise that the pandemic had a pretty catastrophic impact on education, affecting every age and stage, from the language development of our tinies all the way through to undergraduates. However, there were some silver linings of the pandemic experience. One is that we came to recognise in a whole new way the great value and the place of our schools in our communities and society, and another is the digital leap for schools that was necessitated by home learning. But the potential silver lining that I want to address in the context of today’s debate is how we provide a safety net for qualifications.
We talk about exams and exam grades, but we mean qualifications. They count and they carry. They are the passport to our next step, whether that is learning, training or employment. People are asked about their English and maths GCSEs for many years after they leave school, whatever path they take. Covid decimated the exam season for all students everywhere, but a pivot to centre-assessed grades based on teacher and lecturer assessment saved the classes of 2020 and 2021. Their schools and colleges worked to compile the evidence and to moderate it to make sure that those two year groups were able to progress and move onwards and upwards to whatever their next destination of choice was. Their lives went on.
In summer 2022, now that we were living with covid, the exams regime reset and resumed. Invigilators paced the exam halls once more. Students could run the gauntlet of subjects to demonstrate all that they had learned and prove their worth. But that is not the case for the small number of students every year who are hit with a cancer diagnosis and unable to sit their exams, despite the many years of committed study that preceded that moment of crisis. That means that their qualifications and life chances hang in the balance, beyond their control.
Before the pandemic, if someone did not sit an exam, they did not receive a qualification; their only option was to resit. I understand that the only resits offered in the November session are in English and maths, so a resit means a full academic year of suspended animation, watching peers up and leave, and being left behind. There is special consideration in exceptional circumstances, and perhaps additional marks. An overall subject grade is sometimes awarded where one paper has been sat in the subject.
A certification of recognition—I confess that that was new to me, even though I have many years of teaching behind me—first struck me as something of a participation award, but I understand that it gives a nod to the grades that might have been achieved had the exams been sat. However, it is not a qualification, and of course it will sit on a person’s CV and they will need to provide the context at every job interview. It feels rather like the shadow of their cancer diagnosis, and of having the opportunity to prove themselves in exams stolen from them, will forever haunt them and drag them back.
I was brought here today by a petition marshalled by local students James Jewell and Jas Turner on behalf of my very brave constituent Lara. We are here today because they saw her situation as deeply unfair—and so it is. Lara was diagnosed with cancer, and her treatment regime is pretty gruelling. She said, “I’m fighting for me life. I shouldn’t have to fight for my GCSEs.” But she was urged and encouraged to see her way to sitting just one module—just one paper—so that she could access special consideration and have a grade awarded and then, on the other side of her gruelling regime, pick up and move forward to the college and the course that she had set her heart on.
That advice has been echoed by the Department for Education, which stated in response to Lara’s campaign:
“As in any year, exam boards have processes in place to assist students whose ability to sit exams is affected by illness or other unforeseen circumstances, including allowing pupils to take exams at home or in hospital or awarding a grade to students who have taken at least one exam or formal assessment in a subject.”
That same advice—“just one paper”—was also echoed by an exam board. The campaign whipped up, friends and family mobilised, the petition gathered pace and the press followed in pursuit. I have met the exam boards. I have had Lara very much in my sights, but I know that she is not alone in this situation.
Ultimately, I met Ofqual, and therein lay a revelation and a 180° turn in the campaign. I was informed at that meeting that, if a candidate’s disability prevents them from sitting an exam in the traditional way, existing equalities legislation allows for the awarding of grades by the board if the centre can provide suitable evidence; mocks were offered as one example. I was told that there was no requirement for Lara, in her situation, to sit one paper, as had been suggested and encouraged, and that because of her disability—for, by virtue of her diagnosis, she is deemed to have a disability under the Equality Act 2010—she is eligible for reasonable adjustments. At the meeting with Ofqual, I learned that several hundred students were awarded grades in that way last year, allowing them to progress with their peers.
Now, the focus of the campaign moved to comms. Clearly, provision has been made for recognition of these unique and most compelling circumstances, but high-performing and good schools in my constituency did not understand that from the guidance that had been issued. Although several hundred students were awarded grades in that way, I know of at least four in my constituency of Eastbourne who would be eligible under the Equality Act. If that were replicated across the 650 constituencies of this land, it would not be several hundred students but several thousand. I fear that students have been overlooked and disenfranchised because their school did not recognise the signposting in the guidance last year.
Through my experience of supporting Lara, it has become apparent that the implications of the guidance with respect to the Equality Act have not been universally understood or applied. As recently as a few weeks ago, Lara’s campaign team was contacted by another family in Sussex who had been told that their daughter would qualify only for a certificate of recognition. A member of Lara’s team took it up with the school, which repeated the advice that she would need to sit at least one exam. This is year 2 of the change, and the same wrong advice is being given.
In brighter news, on the eve of the coronation—so perhaps most missed it—Ofqual issued new guidance to clarify the position. In the very short time since then, I have consulted those who have followed the case closely to ask whether the guidance means that situations such as Lara’s would be immediately recognised and understood, and whether students such as Lara would get the recognition to which they are entitled under the Equality Act.
An exams officer said that the guidance still does not go far enough. One lead who works closely with children and young people in hospital said that
“despite the new guidance offering more clarification there are issues with the case study examples. The case studies do not refer to the ‘appropriate guidance’—will this give children and their families any reassurance?”
A head said:
“This is a step in the right direction, but I think we need clarity about ‘rare and exceptional circumstances’. This still suggests that the onus is on the family, or school, to prove or argue that a child or young person with a serious illness cannot sit exams due to ‘rare and exceptional circumstances’. This in my view would create extra stress for the young person involved, their family and not so important, but a consideration, nonetheless, more workload for Exams teams in schools. There should be a clear set of criteria regarding serious illness which of course should be backed by medical evidence which protects the dignity of the families involved.”
I have just two humble asks of the Minister, who has been most generous with his time while we have been campaigning on this issue. First, what more can be done, at this very late hour, with the new exam season almost upon us, to ensure that the new recognition has been clearly understood and applied in every school across the land? Secondly, will he consider the situation of students who may have been overlooked last year? I very much understand that the integrity of exam grades is an overarching concern, and it is important that every student’s qualifications command due respect, but this case has highlighted the need for the recent change to be flagged more explicitly with schools and exam centres.
We received good news on Friday. All exam boards with which Lara is entered for qualifications have confirmed that they will award her GCSE grades based on non-exam assessments completed, evidence of mock performance and teacher assessment. We feel that in Lara’s case—and hopefully nationally—the system is moving in the right direction for children and young people who face similar challenges. I am pleased that Lara will receive her grades this summer.
I will leave the concluding words to Lara’s dad, who has been a champion for her through all these many difficult weeks:
“The impact of this inconsistency is discrimination—some are lucky enough to be awarded grades, others not.”
I pay tribute to the young people in my constituency who mobilised to promote Lara’s interests and help secure her grades, to Lara’s friends and family, and to Lara for sharing her story.
It is a pleasure to serve under your chairmanship, Mr Robertson. May I begin by congratulating my hon. Friend the Member for Eastbourne (Caroline Ansell) on securing the debate? I recently applied for a similar debate but, as yet, have not been successful. Perhaps the Minister will be spared yet another debate in Westminster Hall—subject, of course, to his response today. I also take the opportunity to congratulate those who mobilised behind the petition to raise this incredibly important issue on behalf of Lara and her friends.
I will be brief, because my hon. Friend has already made an exceptional speech highlighting the issue, but I want to take the opportunity to mention specifically cancer and examinations. My hon. Friend is right that the definition used in the guidance is very wide with reference to disabilities.
Two weeks ago, I got in touch with the Minister about my constituent Charlotte, who was recently diagnosed with a rare type of non-Hodgkin lymphoma and is now receiving treatment under the Royal Marsden Hospital. When Charlotte’s grandma Mavis got in touch with me, Charlotte, who is 16 and a pupil at Maidstone Grammar School for Girls, was expecting to sit her GCSEs in a couple of weeks. Her options, as set out by the then guidance, were effectively limited to her sitting the exams, but if she were too unwell to do so, she would be eligible for a certificate of recognition, which, while equivalent to a GCSE, is not technically the same; as my hon. Friend pointed out, that would cause her health experience to cast a long shadow.
Given that assessments during covid enabled students to get their rightful grades for years of hard work without having to sit an exam, something did not feel right about that, especially as Charlotte is incapacitated by her cancer treatment. Chemotherapy is harsh, even for the strongest and fittest of people; it deprives people not just of physical strength but of mental capacity, too.
Being a good student, Charlotte has engaged with the schools team at the Marsden. Under the impression that she will still have to sit her exams, she has, since beginning this horrible journey, tried to stay up to date with her school work. She has tried to do past practice papers, but manages about 20 minutes before she is too exhausted and has to sleep for several hours. Her mother tells me that the experience is upsetting, because it is challenging Charlotte’s identity. Identity is not just about what someone looks like, but who they are. I am sure Charlotte’s hair loss, through her chemotherapy, is making her feel like a different person, but the impact of not being able to sit and study, having done so diligently since primary school, will have an equally significant and profound impact on her psychologically.
Chemo brain is a real thing. As someone who has no recollection of an urgent question I asked after a round of chemo, I can sympathise with Charlotte, who often cannot remember what she studied the previous day. We have the benefit of Hansard to help us with our recollections. It usually makes us look marvellous, but she does not have that. So angered was I that poor Charlotte, who was already facing a health crisis, an identity crisis, and—ever so importantly for someone in their teenage years—a social crisis, was now also facing an educational injustice that I disturbed the Minister on a bank holiday Monday. For the record, he was his usual kind, receptive and brilliant self.
Last Friday, I was delighted to receive the updated guidance from the Joint Council for Qualifications. It was updated last Wednesday, and at the bottom of page 14, it says—I am paraphrasing—that in rare and exceptional circumstances, where the centre cannot identify additional reasonable adjustments that would allow the candidate to sit their examinations, an awarding body may be able to determine grades using suitable alternative assessment evidence. I drilled down into what that actually meant, and it was exactly what Charlotte needed. The family are really grateful, and the change has removed an enormous amount of stress. Charlotte can concentrate on her treatment and general wellbeing. She will suffer this horrific treatment until September, but she will hopefully finish in time to start her A-levels.
I want to make two points. First, Charlotte’s school, Maidstone Grammar School for Girls, has been brilliant and nothing but supportive of Charlotte and her family. However, it learned of this change when I sent the revised guidance to Charlotte’s family, who then sent it on to the school. What communication is taking place with schools, including hospital school teams, about this change? I dare to suggest that there is minimal awareness of it. Given how close we are to the start of the exam period, its enactment might face challenges. The updated guidance is really difficult to understand, and the school had to seek clarification that it covered cancer.
That brings me to my second point. In the 109 pages of guidance, there is only one reference to cancer, and that is in the explanation of the definition of disability in the Equality Act 2010. Cancer should not be skirted around like that in guidance. Cancer is not just the cruel, harsh disease that we all hate; its treatment is like nothing else. I would not want to get into ranking the disabilities defined in the Act, but a diagnosis of cancer turns your world upside down, regardless of age. However, the value and importance of educational assessment is drilled into children and young adults; that starts with their standard assessment tests in primary school. A diagnosis of cancer threatens all they have ever worked for. I think the guidance ought to be a bit more open, explicit, transparent and empathetic. Covid proved that we can provide a different kind of assessment, so let us capitalise on that. Let us make it clear in the guidance, in actual terms, what will happen if a student cannot sit their exams due to cancer treatment.
Understandably, Charlotte might not feel as though she is lucky right now, but she has an articulate, caring and supportive family to help her navigate this minefield. She has a school that cares about its pupils, and lives by its Latin motto “not for self, but for all”. She is on the right side of a change in guidance, for which the appreciation is heartfelt. However, I hope the Minister recognises that despite that, there need to be further changes in awareness and specification around cancer. I look forward to hearing his response.
It is a pleasure to see you in the Chair, Mr Robertson. I thank the hon. Member for Eastbourne (Caroline Ansell) for requesting this important debate, and I pay tribute to her brave young constituent, Lara, whose battle against cancer inspired it. I think I speak for all hon. Members in saying that our thoughts are with her, and we wish her all the best.
The hon. Member for Eastbourne spoke with passion and empathy about her constituent’s experience, the longer-term implications of the current arrangements, and her constituents’ tireless efforts to bring these issues to this place via the petition and campaign. Of course, Lara is not alone, and I am therefore grateful to the hon. Member for raising these issues with Ofqual, too. No one wants young people to be discriminated against or overlooked, so I thank her for securing today’s debate. The hon. Member for Chatham and Aylesford (Tracey Crouch) made a number of helpful points with regard to her constituent’s experiences of cancer. As ever, I thank her for her insight and contribution.
As Members have outlined, the Joint Council for Qualifications sets out rules and guidance for exam boards across the UK on access arrangements, reasonable adjustments and what is known as “special consideration”. The JCQ special consideration guidance says that for enhanced grading in “acceptable absences”, 25% of the total assessment must have been completed. Where special consideration cannot be used, a candidate may be awarded a certificate of recognition, but as we have heard today, this is not a qualification certificate.
At its heart, this is a debate about the need for us to provide an inclusive education system—a system that is fair for all, that does not allow any child to slip through the cracks or be treated unfairly, and that gives every child the opportunity to demonstrate what they are capable of and to succeed. That is particularly important for the most vulnerable children in our country, who too often get forgotten. This has become even more significant in the light of the fact that so many children have lived through so many different challenges in recent years. Evidence shows that children and young people have suffered greatly as a result of the pandemic. The surge in mental health conditions among children is unprecedented, and there have been sharper increases for children than for adults. Paediatric services have not been protected from the growth in waiting lists for hospital care. Vulnerable children, such as those with special educational needs and disabilities, are particularly affected. It is essential that our education system be set up to support the most vulnerable children, and to ensure that the safety net is ready to catch every child in every school in every corner of the country, should they need it.
That is why it was vital to invest in education recovery following the pandemic, to ensure that all young people, particularly the most vulnerable, were given the opportunity to catch up on the learning they had missed. Unfortunately, however, the Government ignored the advice of their own education catch-up tsar; the now Prime Minister said that the Government had “maxed out” on supporting children’s learning. We are only now beginning to see the impact of that decision.
As we have heard, during the pandemic, we saw the use of centre-assessed grades across the country. Although centre-assessed grades work much better for most students than the Government’s botched algorithm chaos, which caused distress for so many young people and their parents, we should note that centre-assessed grades were not without issues. Teachers worked incredibly hard to produce grades at late notice, but the Government failed to set a level playing field. There was variation between centres, variation in assessment, variation in awarding, and variation in internal appeals processes. Private school grades soared, then fell sharply last year. University College London’s Centre for Education Policy and Equalising Opportunities and the London School of Economics found that pupils without graduate parents were disadvantaged by the centre-assessed grades approach, so serious questions were raised about the lack of moderation that permitted such variation to flourish. Ofqual may be the regulator in this area, but the buck stops with the Government. If we are to consider embedding centre-assessed grades for any students, those issues need to be addressed.
As with all types of assessment, it is essential that the results produced by centre-assessed grades are fair and consistent across the board. On a broader level, it is clear from the stories we have heard today that a degree of flexibility is needed in our assessment system to support children in extremely vulnerable situations. Allowances are made for pupils in exceptional circumstances, but as we have heard, more could be done to make the guidance clearer and more accessible. There are too many examples of vulnerable young children not being aware of the support they need, and being penalised as a result. Also, exam boards must be reachable by those who require assistance, and must be flexible where possible. Schools must ensure that they provide the best possible support and advice for children in severe need.
In his response, I hope the Minister will outline what his Department is doing to ensure that guidance to exam boards, schools, parents and pupils on the options available is as clear as possible on alternative assessment options in exceptional circumstances. I finish by restating my thanks to the hon. Member for Eastbourne for starting this important conversation, and I look forward to hearing updates on her campaign.
It is a pleasure to take part in this debate under your chairmanship, Mr Robertson. I congratulate my hon. Friend the Member for Eastbourne (Caroline Ansell) on securing a debate on this important subject. She has raised Lara’s illness with me, and I know how gruelling and debilitating fighting cancer is; we all wish Lara a full and speedy recovery. I was also sad to hear from my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) about the diagnosis of her constituent Charlotte, a student at Maidstone Grammar School for Girls. We all wish Charlotte a speedy recovery. I was pleased to hear that the school has been hugely supportive of Charlotte, which does not surprise me, given my experience of being a pupil at Maidstone Grammar School—albeit, I am afraid to admit, half a century ago.
As my hon. Friend the Member for Eastbourne is aware, Ofqual regulates qualifications, examinations and assessments in England. It is responsible for ensuring that regulated qualifications reliably indicate the knowledge, skills and understanding that students have demonstrated, and that people have confidence in the qualifications it regulates. The duty to make reasonable adjustments for students taking qualifications, and the judgment as to whether an adjustment is reasonable, sit with the exam boards, subject to the specifications that Ofqual has published under section 96 of the Equality Act 2010. Ofqual rules require exam boards, in line with equalities law, to have clear arrangements for making reasonable adjustments, and to publish them, including details of how a student qualifies and what reasonable adjustments will be made.
Exams mark the culmination of a number of years of hard work, and provide students with the fairest chance to show what they know, understand and can do. To be diagnosed with a serious illness in advance of exams will always be an incredibly difficult and distressing experience. Examinations and formal assessments are the best and fairest way of judging students’ performance. They have a level of impartiality that other forms of assessment do not; everyone is assessed in the same way at the same time. Additionally, they are marked to the same standard and, crucially, they are marked anonymously. The unprecedented disruption in 2020 and 2021 meant that centre and teacher-assessed grades were needed to enable students to progress. However, last year we were able to return to exams, and it was an important step back to normality for students.
Exams are going ahead again this year, and GCSE students will continue to be provided with formulae and equation sheets in maths, physics and combined science exams. That is important to prepare students for college, university or employment in the best possible way, and to help them make choices about their future. I am pleased to confirm that there are arrangements in place to support students facing challenging medical circumstances this year. As my hon. Friends have mentioned, details were published last week by the JCQ.
I recognise that the guidance has been published, but how does the Minister account for the fact that it has not been universally understood or applied?
I will come on to my hon. Friend’s important point about how we ensure that schools are aware of the changes to the guidance.
Every year, reasonable adjustments are made to assessments, or the way in which assessments are conducted, in order to reduce or remove disadvantage caused by a student’s disability. Adjustments are determined on a case-by-case basis, and can include allowing a student to take exams at home or in another setting, such as a hospital. Last year, in 2022, exam boards were able to use alternative evidence as a reasonable adjustment to determine a grade in exceptional circumstances where disabled students were unable to take exams and assessments, even with other reasonable adjustments in place, due to the extent of their disability. It is important to say that in this context, “a disability” does include some long-term illnesses, including cancer diagnoses, as my hon. Friend the Member for Chatham and Aylesford has identified.
Senior examiners use robust evidence provided by schools and colleges to determine a grade without the student taking the scheduled exams and assessments. Exam boards considered each individual situation carefully, case by case, and ensured that the work was assessed by their examiners to the same performance standard as the work of students who took exams. To ensure that the grades awarded reflect national standards, it is only fair for examiners, rather than teachers, to determine grades in these exceptional circumstances. I am pleased to say that exam boards have confirmed that in 2023 and beyond, they are taking an approach that is very similar to the one they took in 2022.
The Joint Council for Qualifications published its updated reasonable adjustment guidance on 5 May 2023 —on the eve of the coronation, as my hon. Friend the Member for Eastbourne rightly pointed out—to provide clarity and assurance to students and schools. It may be helpful to note that as part of the resilience arrangements in place this year, Ofqual provided guidance on how schools and colleges should collect and retain evidence of student performance in the unlikely event that exams cannot go ahead as planned. That means that schools and colleges will be more likely to have the assessment evidence that they would need to provide to the exam boards so that they could determine a grade. I should clarify that the arrangements in place last year were not centre-assessed grades, as referred to by the hon. Member for Portsmouth South (Stephen Morgan) and my hon. Friend the Member for Eastbourne. Rather, they were a form of reasonable adjustment, because the determination of the grade is made by the examiners, not by the teacher or the school.
My hon. Friends the Members for Eastbourne, and for Chatham and Aylesford, both asked how the new guidance will be communicated. The JCQ has shared the updated guidance with the education sector and with schools, and will also include mention of it in its newsletter to schools and colleges this week. In addition, the Department for Education and Ofqual will look for other opportunities to promote the updated guidance. My right hon. Friend the Secretary of State will shortly send a letter to all MPs and peers that will further summarise this matter. Our key advice to students, and parents of students, who find themselves in difficult situations prior to their exams is to speak to their school or college, which can then contact the exam board directly on their behalf to discuss possible arrangements for them to be assessed and to receive a grade. As was the case in 2022, those arrangements will be decided case by case, based on supporting assessment and medical evidence. I conclude by reiterating that we must give as many pupils as possible—
I am sorry to interrupt the Minister’s peroration, but part of my speech was about being very explicit about cancer. The Minister is absolutely correct that cancer is covered by the Equality Act—it is highlighted—and comes under the definition in the guidance, but given that Charlotte’s school had to seek clarification on whether cancer was included, there could be further communication to make it much more explicit and clear that cancer is a very important part of what is covered by the guidance. No child should go through that horrible diagnosis thinking about their education or their exams. If that concern can be removed very early on in conversations on the subject, it would be enormously helpful to every child who, sadly, faces cancer.
My hon. Friend makes an important point, which I will make sure is conveyed to the Joint Council for Qualifications. The whole administration of exams has to be conducted away from the interference of Ministers and other politicians, to make sure that it is fair and objective. I will make sure that my hon. Friend’s comments, and other comments from this debate, are passed on to Ofqual and the Joint Council for Qualifications.
I reiterate that we must give as many pupils as possible the opportunity to sit exams, as they are the fairest way for pupils to show what they know, understand and can do. I am pleased that exam boards have now put in place a clear process that allows students with a disability that prevents them from taking their scheduled exams or other formal assessments to receive a grade, after all the work they put in during their studies. I pay tribute to my hon. Friends the Members for Eastbourne, and for Chatham and Aylesford, for the caring and attentive way in which they have supported and raised the concerns of their constituents.
Question put and agreed to.
That this House has considered centre assessed grades.