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12,832 spoken contributions under 12 words (interjections such as “Will the hon. Member give way?”) are hidden. Show them
I was overseas when the tributes to the Clerk of the House were made last week, so I would just like to correct the Minister: the Clerk of the House cannot be very long serving, because he is clearly an incredibly young man and far too young to retire. I add my thanks to him for all the support and help he has given me in this role. Question put and agreed to.
Mr Speaker, if the Liberal Democrat spokesman is brave, I can tell you that I have a season ticket to watch Tottenham home and away, and I watched virtually every goal that Harry Kane scored for us. I only wish that he was still scoring for Tottenham rather than Bayern Munich. May I start on a sad note and pay tribute to the late Sir John Hannam, who was the MP for Exeter from 1970 to 1997? He was also the secretary of the 1922 committee from 1987 to 1997, and he died at the ripe old age of 97. I am sure that we will all join together in sending our condolences to his family. Provided that the Leader of the House allocates us time, the House will not have long to wait for the debate on the emerging risks of advanced AI, which of course had to be withdrawn because of the sheer number of Members who wanted to speak in both debates on Monday. If we are given time on 19 November, we will allocate that time for that important debate and a debate on International Men’s Day, which coincides with that date. In Westminster Hall, there will be a debate on Tuesday 3 November on the findings of the Milburn review. On 10 November, when we come back after recess, there will be a debate on antisocial behaviour; I remind the House that that debate will start at 11.30 am rather than 9.30 am. On 12 November, there will be a debate on fire and rescue services’ suicide-prevention training, followed by a debate on VAT policy for the hospitality sector. Further debates for Westminster Hall will be announced in due course. In addition to Remembrance Sunday, which we will commemorate during the recess, that Sunday is also Diwali. I am sure that the whole House will join me in wishing all Hindus, Sikhs and Jains “Shubh Diwali” for the event, and also a happy, peaceful, prosperous and, above all else, healthy Hindu new year, which follows. However, any Hindus who are in Pakistan are in serious trouble at the moment. We in the all-party parliamentary group for British Hindus received a report from Insight UK just last week on the plight of Hindus in Pakistan, which makes for horrific reading. I ask the Leader of the House to get either the Foreign Secretary or a Foreign Office Minister to come to the House and tell us what the Government are doing to safeguard minority communities, not just in this country, as is right, but in countries where they are severely oppressed.
It is a pleasure to follow the hon. Member for Loughborough (Dr Sandher). The overriding question after the Chancellor sat down yesterday was, “Is that it?” Most Budgets manage to survive 24 hours before they fall apart; his Budget lasted about 24 minutes before it fell apart, as the Leader of the Opposition eviscerated it, quite rightly. The verdict this morning suggests that living standards will fall over the duration of this Government and that although over the 2010-2020 period household income increased by 12%, in this decade it is likely to increase only by 2%. That demonstrates that this Government and this Chancellor are making Britain poorer, and we have to remember as well that there are baked-in tax increases from the previous Chancellor that are kicking in now. I will look at four areas of the Budget where there are missed opportunities. First, as my hon. Friend the Member for North Cotswolds (Sir Geoffrey Clifton-Brown) pointed out, there is nothing in the Budget for young people. There are a million young people not in education, training or work. There could have been an opportunity to reduce national insurance contributions for recent graduates under 25, but there was no action. As a result, graduate unemployment is dramatically up. There could have been action on reducing the amount of interest that ex-students pay on their student loans. That was promised but not delivered. On energy costs, a lot of young people in London share houses in bands E to F, so they will get no relief from the £100 drop-in-the-ocean energy payment that is dished out. There are clearly taxes on savers, taxes on banks and taxes on landlords. That means that rents will go up, which means that young people will end up paying the price. For most landlords, the problem is they cannot sell their properties because of the inflated stamp duty that applies, and therefore the amount of supply will reduce. I note that smoking or smoking cessation were not mentioned once in the Budget. Unbelievably, smoking cessation in the national health service is being cut when there are still 4.9 million smokers out there who desperately want to quit. They will not get the support under this Government that they desperately need. That costs the economy £53.2 billion every year through lost productivity, healthcare and social care costs, and smoking-related fires. It is a big issue hitting young and old people. I welcome the extra money to enable every rough sleeper to have a roof over their head. The commitment was, of course, that they would be taken off the streets before Christmas. It has now been watered down—they will be given an offer of somewhere to sleep. At the same time, the number of people who are homeless or rough sleeping is increasing. Far from dealing with the problem, the Government are not addressing it properly. It is good news that the Vagrancy Act 1824 has been scrapped, and we celebrated that two days ago. There is much more we can do to help people in this extremely vulnerable position. As I mentioned earlier this week, we still await the implementation of the Supported Housing (Regulatory Oversight) Act 2023 that I introduced three years ago, which would help prevent vulnerable people from being exploited. There are concerns straight away on the Government’s moves to bring empty buildings back into use. The key there is who will pay the cost. Where is the money coming from when councils already have overstretched budgets? Dealing with local authorities, the £100 council tax rebate does not fix the core spending issues. For those who follow these things, the average increase in council tax last year at band D was £111, so the £100 that some people will get back will disappear when the council tax increases come in this year. The problem now at local authority level is that the demand-led services, which of course are not in the control of local authorities, continue to spiral. I welcome the fact that the Government have given a three-year settlement, but it will still not be sufficient, and in many cases it will lead to huge council tax increases and cuts in services. All in all, this Budget is a series of missed opportunities that could have been easily solved.
I thank the hon. Member for introducing this long-awaited debate. I have a constituent, Karen Buck, whose daughter, Bridget Doyle, was born paralysed, is bedbound and suffers from autism. The reality is that there are many victims out there who suffer from a variety of conditions, as the hon. Lady quite rightly points out—not least spina bifida, which she has not mentioned. The problem here is that legal aid for the court case, which was established to try to get recompense for those victims, was withdrawn some 20 years ago. Unfortunately, although commitments have been made time and again to help these people, these mothers are now advanced in age, and the children they have supported will desperately need support when their lives end. Does the hon. Lady think there is now a need for a proper compensation scheme?
It is good news that the Minister is considering a national proposal. Will she undertake to have a meeting with the long-suffering victims of this scandal, who have been caring for their children for many years without support, in such desperate times, to show her commitment to doing what needs to be done for them? I think she will learn quite a lot from such a meeting.
It is a pleasure to serve under your chairship, Mr Stuart. New clause 6 would require the Government to start negotiations to join the EU pact on migration and asylum within three months. Committee Members should not be surprised to hear that the official Opposition oppose this new clause. The hon. Member for Wimbledon spoke at length about the returns agreement, but it is not simply a returns agreement. At its heart is a so-called solidarity mechanism, under which member states either accept asylum seekers relocated from other states or pay contributions instead. Joining it would mean the United Kingdom accepting people we did not choose, under rules we did not write, ultimately subject to the European Court of Justice. That is the opposite of taking back control. The Conservative borders plan takes a completely different approach. We would ban asylum claims by people who enter the country illegally and remove them within a week. We would seek returns agreements with countries of origin, backed by visa sanctions on those that refuse to take their nationals back, and we would support our allies in Europe to stop illegal entry with intelligence, policing and maritime resources. That is co-operation, and it does not require us to hand control of our asylum system to Brussels. The Liberal Democrats have shown clearly during this Committee that they are not capable of being serious about controlling immigration. They will say that the pact will let us return people to the EU, but the price is relocation quotas and EU jurisdiction, and the evidence from the pact so far is that returns between member states remain very limited indeed. I hope the Minister will confirm today that the Government have absolutely no intention of seeking to join the pact or its solidarity mechanism.
I was surprised to hear the hon. Member for Wimbledon be so supportive of rejoining the EU—I think we have all learned something this morning. We have also learned that the Liberal Democrats feel that that would be a silver bullet to fix all these issues. Yet still the hon. Member comes forward to ask for a cost-benefit analysis to prove it. His statutory duty to benchmark every bilateral agreement against the EU pact is designed to build a case for joining the pact, not to improve returns, and for that reason, the Conservatives oppose it.
I caught the Minister just in time. She described the one in, one out scheme as a “pilot”. I do not recall it ever being described as a pilot when it was launched. Can she unpack what the expectations were, what was delivered and why the scheme has been cancelled?
The hon. Member for Wimbledon has described the real pressures on councils across the country. When people are granted protection and leave asylum accommodation, many present as homeless, and local authorities across the country pick up the cost. However, in our view, a statutory taskforce will not solve that. The root of the pressure is the number of people arriving and the time that they spend in the system. Fewer arrivals and faster outcomes would do far more for councils than any taskforce. We will not support the new clause, but let me ask the Minister a question, building on the one that the hon. Member for Wimbledon asked. What is the current move-on period after a grant of protection, and what assessment have the Government made of the cost of refugee homelessness to local authorities throughout England?
The Liberal Democrats’ new clause 10 would give asylum seekers the right to work after three months, and the Green party’s new clause 24 would give them an automatic, unrestricted right after six months that lasts through every appeal. We oppose both new clauses. People who enter the UK illegally should not be able to claim asylum here at all. The new clauses go in the opposite direction. They would make the UK a more attractive destination for people deciding whether to pay a smuggler to cross the channel. Everybody wants to reduce pull factors so that we can reduce dangerous crossings, and I am afraid that the new clauses would introduce additional pull factors. I will keep my remarks brief and just ask the Minister a question. How many asylum seekers currently have permission to work, and what assessment have the Government made of the effect that earlier work rights would have on the number of claims?
New clause 11 would require the Government to restore refugee family reunion within six months, but I understand that it also widens definitions to include children up to the age of 25, which was not in the hon. Member’s opening remarks, so I hope I am not mistaken. We oppose this measure. Family reunion, as proposed in new clause 11, would add a further reward to a successful illegal crossing. Every grant would bring the prospect of encouraging a wider family member, and it would create a well-known incentive for families to send one member ahead, sometimes a child, on the most dangerous journey of all. We all want to stop and limit dangerous journeys. Safe and legal routes should be for people from regions of conflict who we choose to help, as we have done for Ukraine, Hong Kong and Afghanistan. There should not be a reward for illegal and very dangerous crossings. We will not support the new clause, but can I ask the Minister to tell us when the Government intend to publish their replacement for the suspended family reunion route, as I think she intimated they would in the previous debate, and whether the intention is for it to be capped?
There seems to be some confusion on both sides of the House about the next steps for Cambridgeshire and Peterborough; perhaps the Minister can clarify. He said that the process was in its early stages, so Cambridgeshire will still receive written confirmation of what the options are. He also appeared to confirm that despite the fact that the four options tabled will be selected, they could later be modified by councils, if they saw fit, and taken forward. Could he clarify that that is the process, and clarify the criteria under which that decision will be taken?
I just wanted to bring the Defence Secretary back to his comments about the defence investment plan and its being fully funded. According to the Red Book, there is a reallocation of capital spending that is £145 million this year and £2.1 billion next year. Can the right hon. Gentleman outline where that reallocated capital spending will come from?
This Budget must be bewildering to members of the Prime Minister’s party. He promised them a “circuit breaker”, an end to “40 years of neoliberalism” and a “new political model”. Instead, it is all gherkins and aubergines. The Defence Secretary, who is sitting on the Front Bench, is probably wondering the same as everyone else: was that it? To be honest, he is probably thinking he would have done a better job, and he might be right. It is not too late: if he resigns again, he might get his chance to be the Chancellor. All the while, Britain has a debt problem, Britain has a defence problem, Britain has a growth problem, and apparently, as we learned yesterday, there is nothing the Chancellor can do. On the big challenges, what has this Budget actually done? It does not reduce borrowing; total debt has gone up. It does not properly fund defence; the Government still have not set out how 3% will be funded. It does not cut taxes to get the economy growing; instead, they are putting up taxes again.
If time allows, I will be very happy to go into great detail about our record on defence. When Russia invaded Ukraine, we were proud to stand with the people of Ukraine, and to reboot the funding for defence. The test that the Chancellor failed was not my test; it was his own test. It was the Chancellor who resigned because the previous Chancellor and Prime Minister would not give our armed forces the proper funding for our defence. Yesterday we needed decisive action, and all the Government delivered was a Budget of ducked decisions. The Chancellor has taken to heart the idea of, “Why do today what you can put off to next year or the year after?” Let us be clear that, as a result, Britain will be less secure, less fair and poorer for it.
Madam Deputy Speaker, I should make some progress, and we have got plenty of time to talk about defence—
No, no. I have a very good answer. In 2010, the Defence Secretary’s party wanted to reduce and cut further our armed forces. We were the party that will always stand behind our armed forces.
Let me make some progress, because this debate is about the whole Budget. There will be plenty of opportunities to talk about defence, which we can come back to. Let me give the Government some credit for some of the few positives in the Budget. The Chancellor was right to U-turn on his party’s manifesto commitment to equalise the youth rate of the minimum wage. One in six young people under this Government—shame on them—are looking for a job and cannot find one. Equalising the youth minimum wage would have made a desperately tough situation harder. He should have gone further and halved the jobs tax for young people as we would have done. The Chancellor was also right to ignore those on his Back Benches who wanted to raise capital gains tax. In fact, it was not just the Back Benchers; the Defence Secretary was also calling for that. Thank goodness the Chancellor did not listen to him. It would have meant many more wealth creators joining the thousands who have fled our country under Labour. The public were not asking for much from this Budget and yet even their lowest expectations have not been met. Ordinary people wanted the Government to get a grip on out of control welfare spending. They wanted a Budget that properly funded defence. They wanted the Government to tackle the deficit, with tax cuts for their families to be better off. That would have been real breathing space. Against all and any of those tests, the Budget has comprehensively failed. It could have been a moment when a Chancellor resolved to live within our means. Instead, this Government will have added—do they know the number?—more than £300 billion-worth of borrowing over the course of this Parliament. Borrowing is up in every single year of the forecast. The national debt now stands at the equivalent of £100,000 for every household and it is set to grow by a quarter in the next five years. Britain is walking along a fiscal cliff edge and the Government have decided that this is the moment to close their eyes. Yesterday, the OBR confirmed that the Government are spending £124 billion a year on interest alone—up £14 billion and more than the Government spend on defence, policing and prisons combined. That money goes straight out of the door to our creditors. It was so out of control that the Bank of England, in the run-up to this Budget, was forced to make an extraordinary £200 billion intervention to try to reduce the cost and still the 30-year gilt rates rose above 6%. It is not fair, Madam Deputy Speaker. It is not fair to our children or to their children. We cannot continue to kick the can down the road for future generations of taxpayers. Instead of getting a grip, the Chancellor doubled down. He repeated his predecessor’s mistakes and cut the fiscal headroom to just £15 billion, the equivalent of just three-and-a-half days of public spending. Is that recklessness why the Defence Secretary want us all to have three days’ worth of stockpiled food? The Chancellor said in his conference speech that “these levels of debt are an assault on our common sense, they are an affront to our values.” That was just a month ago, so what has changed? He is now raising debt in every single year of the forecast. A month ago, it was an affront to his values; now it is front and centre in his Budget. The Prime Minister may not care about the debt we hand on to the next generation, but he really ought to. And so should Labour’s faithful little helpers, the Liberal Democrats, who are so enraptured by Europhilia, so desperate to crawl back into the clutches of Brussels, that they have not noticed a glaring problem: the nation’s figures are so poor that we could not rejoin the EU even if we wanted to. EU rules say that a member country’s national debt should be under 60% of GDP, yet the UK is approaching 100%. The EU’s deficit limit is 3%, yet the UK’s is one-and-a-half times that. Despite all that debt, the Chancellor still has not found the money to properly fund 3% of GDP on defence. We welcome that the Government are finally funding their own defence investment plan, but it is not good enough.
The Labour Whips have clearly been doing their history lessons, but history lessons are not going to defend our country. The threat is real. The Defence Secretary is running around telling us to put food under our beds and to store water. The issue is now and that is why the Chancellor himself resigned as Defence Secretary, saying that funding below 3% was inadequate. Nobody challenges that.
Labour Members try so hard, but the hole in their Budget is gaping wide open. The problem is that it is not just us on the Opposition Benches who can see that hole, but our adversaries around the world, leaving ourselves open. Not properly funding our armed forces is not going to scare anyone in Moscow and it will not deter Tehran. The Defence Secretary has resigned once before, so we know he is not against resigning. Perhaps he could resign again on principle today. We on this side of the House are used to Labour breaking their promises, but to break the promises they made to our armed forces is a new low. If the Chancellor had any dignity, he would have resigned yesterday. Despite their failure to fund defence, the Government have still raised the tax burden to the highest level on record—higher than in the aftermath of world war two and higher than even the right hon. Member for Leeds West and Pudsey (Rachel Reeves) raised it. Who remembers how this Government had no plans to put up taxes? How is that working? For the third Budget in a row, the tax burden is set to rise. All told, taxes are going up by a total of £75 billion a year: higher next year, higher the following year and higher in every single year of the forecast. Even the Prime Minister’s former economic adviser, Andy Haldane, now says that Britain is “taxed out”. He also called the Chancellor “penny wise, pound foolish”. I am not even sure about the penny wise bit, to be honest. And where will that money come from? Families, small businesses, the self-employed, farmers, the people who work hard and want to get ahead. Why? To pay for those who do not—those who could work, but choose not to. The damage does not just stop with the tax bill itself. It is the disincentives in the economy that do the most harm. Two years ago, the then Chancellor stood at that Dispatch Box and raised taxes on jobs. Now, we are in a jobs crisis, with over 170,000 jobs lost since July 2024, all because Labour does not understand that if you tax something, you get less of it. Now it is raising taxes on the banks, which provide mortgages, loans to small businesses and pay interest to savers. The Chancellor might think it is just a bank tax, but we know that, like every tax, it will end up being paid by ordinary working people: higher mortgages, lower returns on savings and bank branch closures in every constituency and every high street, and fewer jobs in this country. The Budget also contains a vindictive tax rise on people who have done the right thing, those who have done what Governments have always told them to do and what this Government want them to do: save money. Yet for many, up to 49p in every pound of interest on hard-earned savings will now be taken by the Chancellor. It is the same story with landlords, who have already come under attack from this Government, and the OBR says that rents will go up as a result. Of all that the Budget was missing, the lack of welfare reform stands out the most. Or at least, so we thought—because this morning the Chancellor told the BBC that there will be welfare cuts before the election. Perhaps a Treasury Minister could come to the House and clean up the Chancellor’s mess. His Budget has not even survived 24 hours. Last week, the Prime Minister called the benefits bill a moral outrage; he was right then, but he is not doing anything about it now, because Labour Members are too afraid to say, “Enough is enough.” They do not have the courage to get a grip on welfare, because they are worried that it would cost them their jobs. Thanks to the TaxPayers’ Alliance, we know that for more than half of all Labour MPs, the number of benefit claimants in their constituencies is larger than their majority. It is true for the Chancellor, it is certainly true for the Defence Secretary, and it is true for the Economic Secretary to the Treasury. They will not get welfare under control because it would cost them their seats—they are putting their own interests before the country’s. [Interruption.] I am making progress. Don’t you worry—I am doing very well, Madam Deputy Speaker.
I read that the Budget had the most measures in it of any Budget, but also that they were the most inconsequential. I will try to crack through a few other things. [Interruption.] Labour Members are all chuntering, but I will tell you who else’s interests they are putting first: the trade unions. While the Government are raising taxes on everybody else, they are handing out more than £40 million over the next two years to a union learning fund. I cannot even begin to imagine what they will be learning: how to run rings around the Health Secretary; what to do with those extra days off from working a four-day week; how to keep public sector pay rises twice as high as the private sector—[Interruption.] The Defence Secretary says, “How to keep the Conservatives out.” That is probably about right—that is probably exactly what they are doing! It is a political bung to their political allies. It is ridiculous. While families face tough choices in a cost of living crisis, this Government use their Budget to tax people and hand money to the trade unions. It was not just the Budget we heard yesterday; we also heard the figures from the Office for Budget Responsibility, and they really do show us just how bad things are. For the first time ever, the Government are planning to spend over 45p in every £1 in the economy. Government spending goes up every year of the forecast, debt is up every year of the forecast, and it is official: living standards are down. Real household disposable incomes are set to be lower next year than when Labour took office—£1,500 lower at the end of this Parliament than they were forecast to be under the Conservatives. It is not hard to understand why: inflation is up, interest rates are soaring and unemployment is up again. The one-off £100 that the Government are putting into bank accounts will not touch the sides for most people, given the cost increases. The only thing that will put us on a path out of decline and deficits is growth. The Conservatives understand the value of growth. The Prime Minister has got his history entirely wrong. The mistake this country made was not to choose markets over socialism in 1979—it was not electing Mrs Thatcher—but giving up all that we achieved in the ’80s and ’90s. In conclusion—Madam Deputy Speaker is very firm, so I will conclude—this Budget will go down as one of history’s great missed opportunities. It was an opportunity to undo not 40 years of neoliberalism, but the damage of the first two years of this Government—the mistakes made by the right hon. Member for Leeds West and Pudsey, who is now busy job hunting and discovering for the first time what it is like to receive rejection after rejection. Yesterday was a chance to put Britain back on the right track, and the Chancellor blew it. Higher taxes, higher spending, higher borrowing; lower growth, lower living standards, fewer jobs—I hope the Chancellor kept the receipt for the Budget, because I think he is going to want to return it. The British people know that this is not the Budget we need. This is a great country whose potential is being held back. We have a Chancellor who ducks his choices, and a Prime Minister who wants to take us back to the 1970s. We cannot tax and regulate our way to growth. National security really does matter more than social security, and only by tackling the deficit can we back away from the fiscal cliff edge and do the right thing by future generations.
Q To continue the conversation on the ORR, as shadow Rail Minister, I am struck by the fact that in the Railways Bill, the role of the ORR is significantly downgraded, but in this Bill, the balance seems to tip the other way. What is the right balance to make sure both that the ORR has the independence we talked about and that we get the right results for consumers and road users? Steve Gooding: I worked at the ORR back in the day—
I used to work at RAC. Steve Gooding: As somebody who worked there, I think there are two key things: one is independence, and the other is capability. We are talking specifically about growing and making sure that the ORR has the requisite capability to undertake the tricky and, in a way, very public task of setting that. It would need to build that up. As you say, a lot of the expertise in the ORR today is on railways. Yes, that is engineering, construction and all that, but I would certainly like to see a significant strengthening in the capability of the ORR around some of the specific things about this project and its relationship with the existing crossing. Edmund King: I agree. I believe the ORR is looking to bring in new skills, particularly in economic regulation and the broader issues, which will be needed. There are similarities between road and rail, but there are also differences and some of the consequences in regulation are quite different, so it will need to be beefed up.
Q This is predominantly for Mr Whelan, but Ben and Declan, if you wish to weigh in, please do. For the M6, have the economic and operational outcomes that have been delivered over the last 20 years been what was envisaged? On the role of the ORR, does the regulation outlined in the Bill provide sufficient certainty for private investors? Michael Whelan: In terms of economic benefits, the best way to look at the M6 toll is to consider the fact that 50,000 vehicles use it every day. If it was not there, the M6 and surrounding network would be quite a mess. As a result of the M6 toll, we have seen significant investment into the region. Numerous businesses have invested in logistics sites up and down that corridor—for example, there is a massive Amazon site near us. That also creates jobs for the region. I will not go through it all; please refer to the pre-reading that I know you all have. In terms of part 7 of the Bill, which we are specifically interested in, as we see it, as it is an existing road, the ORR regulations do not apply. If they were to apply, that would have a significant impact on our concession agreement, on investors and, in particular, on lenders, who have all invested into the roads. Having this conversation is important, but for us it is a separate issue. Declan Pang: On the RAB model in particular, we are supportive of any measures that will be brought forward to increase road building and capacity, and efforts in that regard. We think that RAB gives some certainty to the market around providing investment opportunities. In addition to my comments around the stakeholder group, the ORR has been heavily weighted towards rail regulation and currently has a much smaller role in highways monitoring. As a proportion of what it does as an organisation, its role from a roads perspective is smaller than the rail element, and that is probably reflected in its level of engagement with the sector as it stands. The Bill would reflect quite a significant change in its level of responsibility, and we would want to be sure about the capability and capacity for it to take on that responsibility. Ben Garratt: I want to expand on something Michael said about the wider benefits. Understandably, the logistics sector invests where there is transport capacity and junctions, from where it can then access the rest of the country. Particular parts of the road and rail network have a lot of logistics clustered around them. It is also about having good journey times between large conurbations. We can definitely see, in other parts of the country, what we would say is artificially less logistics investment than there should have been, because of transport constraints in parts of the network. It particularly affects the north-west, where it is more of a rail issue. A lack of capacity on the west coast main line leads to more modern logistics being clustered further south than maybe it otherwise would be. There is a real economic benefit for the country in getting the capacity right.
Q I will build on some of what the shadow Minister, my hon. Friend the Member for Mid Buckinghamshire, said about tipping points. My question is to both of you, so please feel free to answer in whichever order you prefer. The shadow Minister was referring to things such as fuel duty, I am acutely conscious that the cost base of the lower Thames crossing project is going up and is as yet unknown, and we do not know what the toll will be. In a situation such as we have at the moment, where diesel is at £2 a litre and the sustainable version another 50p on top of that, costs are going right up not only for the build, but for the corporate budgets of the haulage companies and for everyday individuals, who have to manage their household budgets. If the cost goes up to a level beyond the right balance of pricing that is commercially viable for the operator, or absorbable for the family or the business, what happens? At the moment, I am worried about a white elephant across the Thames. In such circumstances, in the end all the costs would get absorbed by the taxpayer and this model goes up in smoke. I am keen to hear from you how concerned I should be about that and what alternative models there are elsewhere. Ben Hopkinson: The ultimate backstop is the Exchequer. Already the Exchequer has had to bear the cost of bringing the lower Thames crossing through planning. I think it is expected to spend about £3.1 billion on the lower Thames crossing even before private investment is brought in. If we have a circumstance where the toll is not paying back what is necessary and the private body that has financed the road falls into difficulty, the Bill states that the Exchequer is able to top up or provide payments, guarantees or low-cost loans. The backstop is therefore ultimately the taxpayer, combined with higher charges for motorists on the road.
Q Should we put in greater stipulations on how costs are incurred? This goes back to some of what the shadow Minister was talking about, that the Bill should stipulate that the road is not overspecified—although safety should remain absolutely paramount—while things such as the use of sustainable diesel are not a necessary part of the Bill. Should that be in the Bill? Ben Hopkinson: I am not sure if that would be an appropriate thing for the Bill itself, but trying to make the project as low-cost as possible will definitely be appropriate as we go on to construction and working with National Highways and whatever private company wins the contract. That will be about ensuring that the Office of Rail and Road is set up properly to oversee the costs that are being put through. Sam Dumitriu: It is worth remembering, however, that the families who may pay higher tolls to cross either the Dartford crossing or the lower Thames crossing, in the absence of a lower Thames crossing bear very high costs, too, as does freight traffic between two of our major ports. The crossing is crucial to the whole wider freight economy—there are really big problems there. I think it is worth remembering that the projects should be made a priority and that, ultimately, they need to get built.
Q Ben just said he did not think that we should be stipulating cost-effectiveness in the Bill—I am paraphrasing, to be fair. My challenge back to that is: why not? If I sit and look at the effectiveness of regulation in other sectors, I come from the private sector—
Q I want to come back to the question of hydrotreated vegetable oil. Mr Palmer, you suggested that there was parity/comparability in costs between white diesel and HVO. I have spent a little time in the last few minutes looking at Google, Claude and ChatGPT, and not one of those sources suggests that is the case unless you count HVO being 10% to 30% more expensive as comparable. So I want to push back and ask you to be more precise on the additional cost base of using HVO in construction across the course of this project, both to date and in your estimates going forward. Matt Palmer: In construction in the UK, about two thirds of our constructors use HVO as standard. For a project, you will find that a number of constructors bid with HVO—it is just in the costs. That is the case with lower Thames crossing. Two thirds of our contractors bid with HVO.
Q That is comparing yourself to another contractor. That is not what I am asking. I am asking about what your costs are of white diesel versus HVO—a completely different comparison. Matt Palmer: But we have never—what I am saying is that we went to market and asked them to build us a project. They did that with HVO as the base bid. We did not see the cost with diesel.
Q Okay. So when you said that the costs were comparable, you did not know whether that was the case, because you had not actually gone to market with that. Matt Palmer: We did not go out with a diesel-based product because the market typically comes forward with an HVO product.
Q I just want to correct the record, though; when you say that the costs are comparable, actually they are not. Matt Palmer: I think I have explained myself. They are comparable. £1.70 is what we are paying. I have been clear that that is what we are paying for HVO at the moment.
As I say, when I asked each of these sources specifically about construction projects—I have not asked them about retail; I asked them about construction—they have been clear that there are substantial additional costs to using HVO. I just wanted to make sure that that was clear.
Q I want to go back to comments that both of you have made. Andrew, you said that you can count on one hand the number of projects that finish on time and on budget, and that is despite the extensive experience that you both have. Roger, you said that cost overruns come from uncertainty. I had a 30-year private sector career. One experience I had negotiating contracts was that when the customer was creating unrealistic expectations or poor procurement was taking place, where you had a competitive environment and people were trying to win the contract was where you ended up with cost and time overruns. Are there any lessons the Government should be learning about how we procure these types of contract so that we get the best possible outcome at the best possible price, but without cost and time overruns? Roger Forsdyke: It is really interesting that you say that from your experience it is the commercial pressure. The most important thing in the tendering process is to have measurables beyond just the cost. If it is first past the post, you are destined to push the price down to the lowest-quality bid, which often creates the problems you are describing and that we described earlier. You have to look at how you will measure the quality of the tenders in real terms, beyond the cost of the lowest bid. I do not think that is regularly done effectively, so you end up with cheap materials, optimistic programming, optimistic budgeting and all those things just to get to a price that is probably optimistic in the first place. That echoes what Andrew said.
Q Can anything in how the relationships are built with the procurement teams be changed to shift that? Roger Forsdyke: I think so. If you have gateways where you build the price through detailed submissions, you can then control it. You do not want uncontrollable cost and excellent quality, but you need to create some gateways through the process so that you can control the quality as you go through. That is my experience. Those sorts of two-stage processes create the best outcomes. You then have to make sure there is no undefined scope. As you cross the line to secured and the responsibility moves to the contractor, you do not want any change. That is sometimes very hard to achieve, but it is a really important step. It is often, “Oh, we just need to get started,” and the pressure of starting often means that the project will start prematurely, before the scope is defined. That is where the optimism bias goes in—the provisional sum might be light or whatever—and then you end up with escalation, notwithstanding the delays to resolving the issues themselves. Andrew Truscott: I do not have a huge amount to add, because Roger has put it beautifully. I will just say one thing, and he can kick me under the table: contracting is a hard business. They do billions of pounds-worth of revenue for 2%, 3% or 4% margins—it is hard—and there is therefore little scope in their business models for mistakes. They will always enter into these sorts of projects with an expectation that mistakes do not land at their desk, because otherwise they go bust, and they have done globally. Again, credit to the way LTC is being procured. I think separating church and state a little bit—separating equity and financing from contracting, rather than having one single proposal—is arguably a way of getting more certainty around deliverability than amalgamating all those elements into one. Where we have seen material cost overruns, it tends to be in the big projects where one single solution is given to a customer. We have been looking at a lot of US projects recently in the road space where single projects— equity, traffic and revenue, as well as construction—are lumped into one big unit and presented to a customer, who then tries to aggregate and always aggregates to lowest cost, and that is not always the right solution. I am giving my previous panellists an awful lot of credit today, which is wonderful. I think disaggregating elements could be a way of managing that risk and that cost and delay overrun quite well.
Labour promised that nationalisation would deliver a more reliable railway. Two years on, it is getting worse. Between April and June, all Government-run operators saw cancellations rise or punctuality fall. Ministers say that Great British Railways will turn that around when it launches next year. They promised its implementation timetable and draft licence consultation this autumn. On this last sitting day of October, neither has yet appeared. When will they, and when will passengers see the improvements they were promised?
I also thank the members of staff who have taken the time to come here and put themselves forward. Does the hon. Lady agree that HCRG’s promise of improving services through a single access point has been a historic failure and that, if it does not manage to get back on track, we should look at re-evaluating its contracts?
Order. Could Members please remain standing so that the Clerk can make a note of how many wish to speak? Given the numbers, I will have to impose a hard time limit of four minutes.
Order. May I remind the hon. Gentleman that the hon. Member for St Neots and Mid Cambridgeshire (Ian Sollom) only has a minute left?
I will call Jon Trickett to move the motion. I will then call the Minister to respond. I remind other Members that they may make a speech only with prior permission from the Member in charge of the debate and the Minister. There will not be an opportunity for the Member in charge to wind up, as is the convention for 30-minute debates.
I commend the Secretary of State for Energy Security and Net Zero for the decision to approve Jackdaw. It takes courage to lead, and the same logic applies to Rosebank. Does the Secretary of State agree that the £2 billion fund set up to transfer jobs from oil, gas and carbon into renewables sends a signal to workers that we are with them in the North sea, today and for years to come?