Gaza: Humanitarian Situation
On three occasions in answering this question the Minister has said that “Israel must”. What will he do if Israel does not?
Showing every spoken contribution, including 5,779 under 12 words. Hide short remarks
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China Audit
It was proper and lawful to send HMS Spey through the Taiwan strait in pursuit of vital international freedom of navigation in the South China sea, was it not, and can we see more like it?
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VAT Registration Threshold: SMEs
Does my hon. Friend agree that this demonstrates that the Labour Government do not understand how our small businesses operate, and are not on their side? We see the impact of not only VAT registration, but employer’s national insurance, minimum wage and business rates increases, among other things. Does he agree that this Government do not understand how small businesses want to grow, operate and thrive?
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VAT Registration Threshold: SMEs
It is a pleasure to serve under your chairmanship, Mr Vickers. I thank my hon. Friend the Member for Mid Leicestershire (Mr Bedford) for securing today’s important debate because, as he and my hon. Friend the Member for Broxbourne (Lewis Cocking) have illustrated, many of our small independent businesses have contacted us as their representatives about the challenge around the VAT threshold time and again. The VAT threshold builds on the collective impact of all the budgetary changes that have been having a hugely detrimental—indeed, catastrophic—impact on our many family businesses. The increases in employers’ national insurance, minimum wage, business rates—crikey, the list goes on. That is before we start looking at other legislation that is coming down the line, such as the Employment Rights Bill, which is creating more uncertainty for employees, dare I say, because employers quite rightly will not want to take the risk of growing and expanding, with further regulation and legislation coming down the line. Small businesses are the lifeblood of any prosperous community, and my constituency of Keighley and Ilkley is no exception. Keighley is home to many fantastic small high street businesses, as well as a number of nationally and internationally acclaimed manufacturers. Likewise, Ilkley boasts a fabulously good high street, which helped the town to be officially named the best place to live in the whole north of England, as rated by The Sunday Times. I am sorry to say that our many small businesses are under immensely increasing regulatory and tax pressures as we go forward. Whether because of the rise in budgetary pressures introduced by the Budget last year or VAT, the subject of this debate, those businesses are struggling right now to make ends meet, and the challenge continues. The mighty British fish and chip shop is one sector that is particularly struggling, with rising input prices and uncertainty over supply chains. I am honoured to represent many fish and chip shops across Keighley and Ilkley, and was lucky enough meet a great constituent of mine, Dwaine Smith, and go along to Old Time Fisheries at the top of Devonshire Street in Keighley to sample the fine offering. He was keen to get across to me the absolute pressure that the fish and chip industry is facing as a result of the increased cost of fish and chips coming into the sector, as well as the increased pressures around employer’s national insurance, the minimum wage and the challenge around VAT thresholds. On a number of occasions I have spoken to the operator of Kirkgate Fisheries, in Silsden in my constituency, and he has raised the issue of VAT with me as the No. 1 challenge that he is facing. Bearing out what my hon. Friend the Member for Mid Leicestershire said, as an organisation it has actively looked at reducing the number of hours that it is open because of the challenges associated with VAT registration and the threshold that has been put in place. We cannot be in a scenario where businesses are coming to us time and again, whether in the fish and chip industry or other sectors such as the wedding industry, as was referenced by my hon. Friend—it applies to every business—because they are being effectively constrained from growing and expanding because of the VAT registration challenges and the burden of the VAT threshold. It is sad to see popular, successful businesses in our communities having to commit acts of self-harm, not because they want to but because they have no other option available—they are forced to because of the increased taxes being put on their shoulders. That brings me to the nub of the issue: this debate is about not just the level of the VAT threshold—although I am pleased to say that it rose steadily under the last Conservative Administration—but the hugely negative impact that the cost of VAT registration is having on the growth of many businesses in my constituency. It is not viable to sit just under the threshold, as has often been communicated to me by many of my constituents, and without further investment to get above it, businesses stagnate. That is the problem that we are actively seeing. I hope that the Minister will reference this cliff edge, which many of our hard-working businesses are facing, and that he will address how the Government plan to see the transition for businesses between VAT regimes. I want to see businesses across Keighley, Ilkley, Silsden and the Worth valley thrive; I want to see families set up businesses that they have control of, that are pillars of the community and drive the local economy. Without doubt, they are the fabric of our communities. To do that, we must create a tax system that encourages expansion and growth. At the moment, the VAT threshold is a great filter to success. It is stagnating many of our businesses and constraining them from being able to grow at the speed they wish. At worst, many of our businesses are reducing their hours of operation and the amount of products that they are selling, because of the VAT threshold and the cost of VAT registration. This simply cannot continue. It is within the power of the Government to make that change, and I hope that the Minister is listening. Finally, I would like to understand from the Minister whether any financial impact assessment has been made by this Government, not only on VAT but on the collective impact of those additional regulatory and financial burdens that have been put on hard-working businesses in our constituencies. I go door-knocking every week, speaking to residents and large and small businesses across my constituency. On the doorstep I openly ask people, 20% or 25% of the way into this Parliament—a year into this Government—to give me one thing that they feel the Government have delivered that has had a positive impact on their business. They cannot name one thing.
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VAT Registration Threshold: SMEs
I struggle to understand how the Minister can come out with these pre-written speeches and expect anyone to believe him. How can he say that stability has now been put back into the wider economy when many hard-working businesses, including the SMEs that many hon. Members have talked about in this debate, are struggling to deal with the consequences of employer’s national insurance contributions rising; the consequences of VAT, which we are debating today; and the consequences of the Employment Rights Bill, which are coming down the line? Yet he still stands at the Dispatch Box and comes out with the bizarre claim that the Government have installed stability with their plan for change. That is nonsense.
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Bus Services (No. 2) Bill [ Lords ] (First sitting)
I am conscious that we are finishing in three minutes, so I will limit my comments to give the Minister some time. Like my hon. Friend the Member for Broadland and Fakenham, I query the premise that public is better than private. The hon. Member for Warrington South mentioned the ability to provide a better service than existing franchise services, but I want to put on record that we can still get £2 fares in South West Devon. There is not necessarily a concrete need for a franchise; it is not necessarily a magic wand. I will fit my other comments in somewhere else, because I am conscious of time.
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Department for Education
I want to talk about the real-life impacts of the decisions in the education estimates, and specifically, due to the short amount of time, on school funding. There is a village in my constituency called Buckland Monachorum for whom school funding is a particularly pertinent issue. It is in the middle of campaigning, because the local trust responsible for the school is having to restructure from September. That is entirely because of the cuts schools are facing and the knock-on impacts from the Budget that we have heard about. The restructuring is causing huge consternation among parents. There are complaints, a campaign—as I said—and a huge amount of stress, as they face a different future to the one they were expecting. The Learning Academy Partnership trust, which is responsible for the school, has shared figures with me that highlight the reality of the funding changes that it is facing. It also has one of the schools that falls foul of the f40 inconsistencies we have heard about. It is worth saying briefly that secondary schools in Devon can see as much as £1 million less in funding than equivalent schools in a city such as Manchester. An hon. Gentleman said earlier that city schools need more money. I hear that, but rural deprivation is a key reality, too, and we need to do more to address it.
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Department for Education
I thank my right hon. Friend for his intervention. I agree that, and there are issues right across the country. The trust in my constituency is facing financial pressures: teacher pay awards, unfunded beyond 1.7%, mean a 4% increase, costing £359,330; support staff pay awards, unfunded beyond 0.9%, mean a 3.2% increase, costing £295,000; and teacher pension increases, support staff pensions and the national insurance increases have a total cost of £349,000, with £76,000 unfunded due to pupil-based funding. That is a problem right across Devon. We are concerned because it means ultimately that those local village schools will have to take a direct hit, which is something that neither the parents nor the teachers, nor the trusts that are responsible, want to see. A big part of this issue is about the reduction in the general annual grant—a real-terms reduction of £200,000 in 2025-26, plus 0.5% redirected by Devon local authority to special educational needs. This will have a massive impact on the most vulnerable children right across the community; ultimately, it will not enable them to get the education they require. Briefly, I want to ask the Minister about the future of schools in places like Dartmoor in Devon, and especially the schools that fall foul of the f40 formula issues. What can the Minister do to reassure the parents, teachers, other staff and children, most importantly, whom I represent, who will ultimately pay the price for these cuts, intentional or not? What reassurances can she offer in response to their pleas and my pleas for children and young people in South West Devon to have the funding they need for the future they deserve? What reassurances can she provide to me that that will take place?
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Department of Health and Social Care
We know that a key part of primary care is community pharmacy. Indeed, that was recognised in the Darzi report, which stated: “One of the great strengths of the health service in England has been the accessibility of community pharmacy.” The previous Government committed to community pharmacy through the introduction of Pharmacy First. The Darzi report also highlighted that 1,200 pharmacies have shut their doors since 2017, and increased medicine costs and rising national insurance costs will not be helping.
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Department of Health and Social Care
I entirely agree with my right hon. Friend. Indeed, St Luke’s hospice in my constituency will be facing exactly the same issues. At risk of closure is Tubb pharmacy in Newton Ferrers in my constituency, which I have raised in this place before. Pharmacist Esi has been helped massively by an incredibly active community. The pharmacy supported a petition I delivered here in Parliament, and it provides essential services to the two rural villages of Newton Ferrers and Noss Mayo, but it is seeking Government action in order to secure its future. While the estimates may highlight a commitment to delivering care closer to home, according to Community Pharmacy England there is still no clear path to the sustainable funding and operational model that is required by community pharmacy. It is needed by community pharmacies such as Tubb in Newton Ferrers, and it is needed by community pharmacists such as Esi. It is needed by the whole country to be able to deliver community pharmacy, Pharmacy First and, ultimately, to relieve pressure on primary care. I urge the Minister to provide this substantial funding for community pharmacy. I know that the Minister agrees that this work is incredibly important, and I urge her to ensure that we bring it to the fore as quickly as possible so that there can be a future for community pharmacy across the country.
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Gaza: Humanitarian Situation
The humanitarian situation in Gaza simply cannot continue. We have spent a lot of time in this House discussing the extent of that situation and the fact that food and essential supplies are not getting through to support innocent victims. What proposals has the Minister put to Israel about the opening of specific crossing points for aid delivery into Gaza? Will he give his assessment of why the Israeli Government may not be listening to this country and our Government on this particular issue?
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Frozen Russian Assets
Ukraine has bravely fought back Putin’s illegal invasion, and that is with our undoubted support. Will the Foreign Secretary give an update on what action is under way to release the billions of pounds of frozen Russian assets? On the subject of Russian threats and malign influence, he will be alarmed to know that the political opposition leaders in Georgia have been arrested and imprisoned this week. What steps are the Government taking in response, and will further sanctions be considered to curtail Putin’s absolute abuse of democracy in Europe?
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Topical Questions
Given the clear threat that Iran poses to the United Kingdom, our allies and the middle east, does the Foreign Secretary support the actions undertaken by the United States to degrade Iran’s nuclear weapons? He will have heard that President Trump has said that Iran’s nuclear capabilities are gone. Does he welcome that?
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Topical Questions
Given the situation that has emerged in the middle east and the fact that the de-escalation has not taken place in recent hours, can the Foreign Secretary outline what measures he is overseeing, in what is effectively quite an urgent situation, to bring back 4,000 British nationals now stranded in Israel? He, like me, will have received overnight a large volume of correspondence from concerned families. What immediate steps will be taken? I understand that another plane is being put in place, but we are now speaking about 4,000 British nationals who are clearly stuck in Israel.
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National Security Strategy
I am grateful to the Chancellor of the Duchy of Lancaster for advance sight of the statement and of the strategy. Protecting our country from internal and external threats to keep the British people and our interests safe is the No. 1 priority for any Government. As a former Home Secretary, I have seen at first hand the incredible efforts of our security and intelligence services to keep us safe. So much of their work will never be disclosed, but I know that the whole House will join me in thanking them for all they do, alongside our police, counter-terrorism operations, the armed forces and all those who work so hard to keep Britain safe. His Majesty’s Opposition will always work constructively with the Government in the national interest, especially in the current global climate when threats are increasingly complex and multifaceted. Iran, China, Russia, North Korea, non-state terrorist actors and transnational criminals all pose a significant threat to us all. That is why we welcome actions that build on the measures we put in place in government, including our National Security Act 2023, which gives us increased oversight of adversarial action and introduced the foreign influence registration scheme. The statement and the strategy refer to the three pillars of security at home, strength abroad, and increasing sovereign and asymmetric capabilities, and I will take each in turn. On security at home, protecting critical national infrastructure must be a key component of any national security strategy. How will that work in practice? What resources will be provided? What further steps are being taken to protect people on British soil from transnational repression? With China placing bounties on the heads of people in our own country and both the NSS and the strategic defence review highlighting the threats posed by China, can the right hon. Gentleman confirm that China will be placed on the enhanced tier of FIRS? Will the Government drop their support for the China super-embassy spy hub? On projecting our strength abroad, the right hon. Gentleman mentioned today’s NATO summit, and the commitment to increase what he calls national security spending to 5% of GDP by 2035, with 3.5% on core defence. But he does not have a plan to get to 3%, let alone the 3.5%. It is all smoke and mirrors, so when will he deliver a plan to get to 3%, and why will he not heed our calls to hit 3% by the end of this Parliament? That would be a vital stepping stone on the way to the higher defence spending he is seeking. Will the Government give clear information on exactly what spending will be included in the 1.5% target? Is there any new money, and does this, for example, include the costs of Sizewell, as we heard recently? As well as increasing spending, we need to develop a tougher edge for a dangerous world. Given the security threats that we continue to face, will Labour’s £30 billion Chagos surrender treaty be scrapped? It undermines our national security, and contrary to the Prime Minister’s claim, our loss of sovereignty has been publicly backed by representatives of the regimes in China, Russia and Iran. The costs also hoover up money that we could spend on much-needed defence capabilities at this incredibly dangerous time. On increasing sovereign and asymmetric capabilities, can the Chancellor of the Duchy of Lancaster explain what support will be given to private enterprise and what investment will support efforts in this area? I also note that the words in the Government’s strategy do not quite align with their broader action—for example, the decision to allow the Chinese firm Mingyang to provide wind turbines for large wind farm projects in the UK. Does he acknowledge the need to protect our energy infrastructure from such potential malign activity, and if so, what concrete steps have been taken to increase the very resilience of our own infrastructure? Finally, on the important role of the Joint Committee on the National Security Strategy and of parliamentary oversight, we understand that the National Security Adviser, Jonathan Powell, has not been made available to the Committee for questioning. The Government have claimed that it would not be appropriate for him as a special adviser to answer questions from the Committee. However, in this case, it is more than clear that Mr Powell’s role as the National Security Adviser puts him in a unique position—a unique senior position—and it appears that, as the lead adviser for the Government’s national security strategy, it is only right that the Joint Committee be able to put questions to him. Given the important issue here, and Mr Powell’s senior role and central position, will the Government finally let him give evidence to the Committee to allow it to undertake its important work? We will always work to support the defence and security of Britain, and engage constructively with Ministers and challenge them to do everything possible to keep us safe, so I welcome the chance for these questions to be answered today.
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China Audit
I am grateful to the Foreign Secretary for advance sight of his statement, and I look forward to reading the audit and receiving the detailed briefings that clearly cannot be put in the public domain. Let us be clear: China thinks that its way is the best and only way, and its leaders are on an international quest for global governance and for its frightening authoritarian model to supersede ours. Ours is one of democracy, openness and standing up for freedom and values. China has been ramping up its military with alarming conviction, including conventional nuclear and space capabilities, and it is a critical enabler of Russia’s illegal invasion of Ukraine—we saw President Xi standing side by side with Putin in Moscow just weeks ago—so be in no doubt that China and Russia are collaborating across all domains to undermine our very democratic freedoms and the west. Beijing tramples on the Sino-British declaration in Hong Kong, threatens British national overseas passport holders on British soil and has imprisoned Jimmy Lai—a British national—through an awful, politically motivated trial. Beijing’s unjustified aggression in the South China sea is dangerous, and it unacceptably intimidates and challenges the sovereignty of its neighbours in the Indo-Pacific. It is consistently and constantly threatening the peace-seeking democracy of Taiwan while committing the most appalling human rights abuses in Xinjiang. It also applies hybrid and grey-zone techniques against Britain, including malign cyber-activity directed at our democratic institutions and sanctioning our very own Members of Parliament, all the while exploiting vulnerable countries through its belt and road initiative. China also flagrantly brushes aside economic rules and steals intellectual property. It has developed sophisticated models to acquire strategic assets around the world. Despite all of that, it has taken the Government a year to produce this audit, which seemingly fails to set out any kind of serious strategic framework. I think it is fair to say that we know why: it is because the Government—in fact, the Foreign Secretary touched on this—have gone cap in hand to China to bail out their terrible handling of the British economy. They are setting up closer economic ties with China while knowing very well that British businesses are struggling not just in competing against China, but to absorb the weight of Labour’s own regulatory costs. We have not heard it in the statement, but can the Foreign Secretary name a single area where measurable, tangible progress has been made in advancing critical British interests with China, whether on national security, economic practices, climate or human rights? He failed to mention that Members of this House have been sanctioned by China. We have seen signs of naivety from the Government—consistently, if I may say so. [Interruption.] Within one day of the Prime Minister meeting President Xi, he effectively held that as an opportunity to bring about a strong and consistent relationship in which surprises would be avoided. Within the following few days, 45 pro-democracy campaigners were jailed in Hong Kong, following a very harsh application of the draconian national security law. That is completely unacceptable. What is the Foreign Secretary’s actual strategy to deter China from systematically extinguishing freedoms in Hong Kong? Will he commit to using the full weight of the Government machine to do more to protect BNOs and Hongkongers who suffer outrageous transnational repression in the UK, rather than just issuing guidance and training? The Government have constantly and suspiciously backed the application for China’s new super-embassy in London. Why are the Foreign Secretary and the Government not showing the same backbone that their Irish and Australian counterparts showed when they saw fit to block embassy planning applications from Russia, which they deemed too risky for national security? Do the Government have a practical strategy to deter Chinese efforts to capture Taiwan by military means or by stealth, or to oppose the human rights abuses in Xinjiang? What is the Foreign Secretary’s end goal and what are the means of getting there? What will he do to find new critical minerals supply chains in order to reduce reliance on Chinese trade? With that, what will the Government do now to move Jimmy Lai’s case on to an urgent footing, away from the complex consular case handling that it seems to have in the Foreign Office? The Government need to urgently sort out some of the grave contradictions mentioned in the Foreign Secretary’s statement, and I will highlight a few. We heard him speak about the China audit underlining “the extent of Beijing’s support for the Kremlin.” We do not question or doubt that, but some action is needed. The statement also says that the audit “reiterated that our approach to China must stay rooted both in international law and deterrence.” How does that help Jimmy Lai at this particular moment? We will always support the security and the defence of our country, so the Government must do much more when it comes to keeping Britain safe from China.
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Topical Questions
What does it say to Britain’s allies, and to our enemies, when neither the Foreign Secretary nor the Prime Minister can bring themselves to say that the strikes again Iran were right and legal?
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National Security Strategy
I note what the Minister said about social resilience. There is little point in strategising to defend our security and power in the world if we surrender our freedoms and culture without a whimper at home. Therefore, what will the Government do, for example, to stop the misuse of sections 4 and 5 of the Public Order Act 1986, not to mention the decisions of the likes of Bristol university and the Government with their proposed Islamophobia definition, to create a de facto Islamic blasphemy law in Britain?
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China Audit
I want to remind the Foreign Secretary that the Government that invited Huawei into our telecommunications network was actually the last Labour Government between 2003 and 2006. [Interruption.] Well, he has tried to be partisan about it. The ebb and flow of these issues and the mistakes go back quite a long time, and he should acknowledge that. What assessment has the Foreign Secretary made of China’s dominance of the world market for cellular internet modules, which are subsidised and sold internationally below the cost of manufacture? What assessment in particular has he made of the insertion of kill switches in Chinese-made wind turbines and PV cells, and will he rule out any Chinese involvement in our energy infrastructure?
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Points of Order
On a point of order, Madam Deputy Speaker. I seek your advice about the exchange that I have just had with the Foreign Secretary. After he had been incredibly partisan about the history of Huawei’s involvement in our telecommunications infrastructure, I pointed out that that involvement began under the previous Labour Government when he was a Minister, but he tried to accuse Members on the Conservative Front Bench of something similar. I asked a serious question about the Chinese dominance of the world market for cellular internet modules, which is a very serious issue. We have all grown used to the fact that we do not get answers in this House, so perhaps you will advise us, Madam Deputy Speaker, on whether Ministers will do so. The Foreign Secretary then decided to abuse and insult me personally about advice that he claims that I gave, in a previous role, to a former Prime Minister. He has no idea what advice I gave in that job. If he cares so much about my personal history, he will read all the things I have ever written about the role of Chinese companies in our energy infrastructure. I would like him to take the opportunity to withdraw the accusation.
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Department for Education
Before the election, Labour said that increasing VAT would pay for more teachers. Even in December, the Chancellor said that “every single penny of that money will go into our state schools”. More recently, however, the Prime Minister has claimed that this will instead pay for investment in social housing. He said “my government made the tough but fair decision to apply VAT to private schools… because of that choice, we have announced the largest investment in affordable housing in a generation.” These statements from the Chancellor and the Prime Minister cannot both be true. They cannot spend every penny on state schools and also spend money on housing, so my first question to Ministers is this: who is not telling the truth? Is it the Prime Minister or the Chancellor? Logically, both statements cannot be true. Either way, we are not getting the extra teachers. In fact, statistics just came out showing that there are not more teachers, but fewer. There are 400 fewer overall, including 2,900 fewer in primary. Teacher numbers went up 27,000 under the last Government. Now they are down 400 under this Government. It was at that point, when those statistics came out showing that things were going in the wrong direction, that Ministers suddenly and for the first time started saying that the loss of staff in primary schools would no longer count. Primary school teachers no longer count for this Government. They had never said this before until the statistics showed that teacher numbers were falling. This pathetic attempt to move the goalposts is so corrosive of trust in politics. It is a bit like when the Chancellor said that she was making her unfunded pledge to reverse the disastrous cut to the winter fuel payment because things were going so well with the economy. Everyone knows that is not true. It was so brazen. Let me quote what the Office for Budget Responsibility has said: “Since the October forecast, developments in outturn data and indicators of business, consumer and market sentiment have, on balance, been negative for the economic outlook”, and “borrowing is projected to be £13.1 billion higher in 2029”. But this Government seem to think that they can say black is white and people will believe them. In that same brazen spirit, the Secretary of State responded to the statistics showing that there were fewer teachers in our schools by saying in a chirpy tweet: “We’re getting more teachers into our classrooms.” Ministers now say that primary schools do not count because pupil numbers are falling, but pupil numbers in primary are now predicted to be higher than when they made that promise. On the same basis, we could equally exclude all the many areas where numbers of pupils are falling in secondary and, indeed, places where numbers in primary are still going up, as in Leicestershire. It is brilliant: if we just ignore all the teachers that are getting the sack, of course teacher numbers are going up.
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Department for Education
I am glad that the hon. Member has prompted me—he must have a copy of my speech. In the last Parliament, according to the Institute for Fiscal Studies, real-terms spending per pupil went up by 11%. I thank him for allowing me to make that point. So why are so many teachers getting the sack? It is partly because that is not the only broken promise. Labour also promised that it would fully compensate schools for the cost of the national insurance increase. The Minister sighs as I say this, and schools around the country will sigh too, because Labour broke that promise. According to the Confederation of Schools Trusts and the Association of School and College Leaders, schools have been left up to 35% short in some cases. With all the broken promises that we have already mentioned, let me check in on another promise. Perhaps the Minister will tell us the answer. The Prime Minister promised two weeks of work experience for all pupils and the Labour manifesto promised £85 million to pay for it. In May the Government told schools to get on and deliver extra work experience. When exactly will schools receive that £85 million? Schools are not the only bit of the Department for Education where the Government have broken promises. The Secretary of State’s website still says, in a chirpy way: “Graduates, you will pay less under a Labour government.” But Labour has increased fees, not reduced them. The spending review was strangely silent on the subject of tuition fees. I assume that silence can only imply that tuition fees are set to rise in every year of this Parliament. Let me say what that will mean. It will mean that, in 2027, fees will go above £10,000 a year for the first time. It will mean that the total amount borrowed per student taking out the full amount will increase from £59,000 now to £66,000 outside London, and from £69,000 to £77,000 in London. So much for paying less! Ironically, the gain to universities from that broken promise and from that fee hike has been entirely wiped out by yet another broken promise: the decision to increase national insurance, another thing that Labour promised not to do. That broken promise has also hit nurseries. The Early Years Alliance has said that it is “disappointed” and “frustrated” by the spending review, and the Early Education and Childcare Coalition says that the spending review “reiterates many promises already made” and that “many nurseries and other providers are…running at losses and at brink of closure”. Meanwhile, the Institute for Fiscal Studies notes that the funding in the spending review for early years “may not be enough to meet additional unexpected demand”. So what does this all look like when we come down from the billions to look at it from the frontline? Sir Jon Coles is the leader of the largest school trust in the country and also a distinguished former senior official in DFE. What does he make of these estimates and this SR? He says that “education will—for the first time in a spending review—get less growth than the average across all spending departments… The last time we had such a poor three-year cash settlement was the period 2014-2018, when average cash increases were about 1.8 per cent. But then, inflation averaged 1.5 per cent… it slightly sticks in the throat that HMT are trying to present it as good news… The claim that this is a ‘£2 billion increase in real terms’ is a version of spin I can’t remember seeing before. It relies on treating the financial year before last (pre-election) as the first year of the current spending review period.” In fact, he says that when all that is stripped away, “to all intents and purposes, this is a flat real-terms settlement for three years. If, as Schools Week are reporting, the £760 million ‘SEND transformation fund’ is coming out of the core schools budget, then that represents a significant real terms funding cut in school funding.” Perhaps the Minister will tell us whether that is correct and it is coming out of core schools spending. That brings me on to the great suppressed premises in these estimates, which is that DFE assumes that it will save substantial amounts on special needs compared with the trend implied by previous years. The hon. Member for Yeovil (Adam Dance) talked about the cuts to special needs spending. In fact, since 2016, according to the Institute for Fiscal Studies, spending has increased by £4 billion in real terms—a 60% increase. If that has felt like a cut to the hon. Member, he will not like what is being brewed up by the Treasury now. The SEND plan will be out this autumn—coincidentally around the time of what looks like an increasingly difficult Budget. So far, DFE Ministers have floated two ideas for the SEND review. The first is to restrict EHCPs only to special schools. That would be a huge change. There are 271,000 children with EHCPs in non-special state schools and a further 37,800 in non-special independent schools, so 60% of the total are not in special schools. Anna Bird, chair of the Disabled Children’s Partnership—a coalition of 120 charities—has said: “The idea of scrapping Education, Health and Care Plans will terrify families.” Secondly, on top of that, we learned from a Minister of State in the Department of Health and Social Care that the Government also plan to push a lot more children from special schools into the mainstream. There are two big questions about this plan. To say the least, there is a clear tension between these two money-saving ideas. If the Government take away EHCPs in mainstream schools, parents will be a lot less confident when the council presses them to put their child into a mainstream school rather than a special one. Given that the Government have U-turned on the winter fuel payment and now say that the coming welfare vote will, in fact, be a confidence vote in the Prime Minister, it will be interesting to see what eventually issues forth from the DFE. We know from these estimates and the SR that, as Sir Jon Cole says, unless the Government deliver these large, planned savings in special needs, the settlement for schools will become increasingly difficult. This Government have broken a staggering number of promises incredibly quickly. Ministers seem to believe that they can just say that black is white and that they never meant any of the things they so clearly promised. This debate is about the money side of things, of course, but in terms of reform, things are also going backwards with the Children’s Wellbeing and Schools Bill, which will lower standards and smash up 30 years of cross-party reform to appease the trade unions. Tony Blair once talked about “education, education, education.” What we are now getting is broken promises, broken promises, broken promises.
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Department of Health and Social Care
Order. Due to time constraints, I must now call the Front Benchers, starting with Helen Morgan.
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Ministry of Housing, Communities and Local Government
The debate will be opened by the Chair of the Housing, Communities and Local Government Committee.
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Ministry of Housing, Communities and Local Government
Order. We have far too many speakers, because this debate must conclude at 7 pm. We will have a hard speaking limit of three minutes. Interventions are up to the lead speaker, but if they are not made or taken, I could get everybody in. That is something to keep you going for a bit. [Interruption.] Yes, the hon. Member for Harlow (Chris Vince) remaining quiet will help enormously.
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Ministry of Housing, Communities and Local Government
Star pupil of the day.
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Ministry of Housing, Communities and Local Government
I call the Liberal Democrat spokesperson.
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Ministry of Housing, Communities and Local Government
I call the shadow Minister.
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Ministry of Housing, Communities and Local Government
I call the Minister.
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Topical Questions
Cousin marriage is often used as a cover for forced marriage. Have the Government raised the issue of the incredibly high rate of first-cousin marriage with the Pakistani Government, given that so many of those marriages are between UK and Pakistani nationals?
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Department for Education
In the past few days, a headteacher in my constituency has told me that their school’s funding is going down significantly in real terms this year. They say that they are now looking at a crisis, with potential staff cuts coming. On top of that, I have heard local providers of early years education saying that they are being even more punitively hit, because private sector providers receive no support with national insurance. Does my right hon. Friend agree that, for a Labour Government who came in promising to do so much for education, our children are actually seeing very little?
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Department of Health and Social Care
Does my hon. Friend recognise that it is not just community pharmacies that are being hammered in this sector but hospices too, such as St Luke’s hospice in Basildon, which is facing a £450,000 rise in its national insurance costs? Does she also agree that Ministers are putting these costs on to pharmacies and charities that cannot make them back, which is absolutely killing community infrastructure in the health service sector?
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VAT Registration Threshold: SMEs
I beg to move, That this House has considered the impact of the VAT registration threshold on SMEs. It is a pleasure to serve under your chairmanship, Mr Vickers. It was Napoleon Bonaparte who once said that “England is a nation of shopkeepers”. As is often the case with Napoleon, he was wrong. England, and indeed the UK, is a nation of entrepreneurs. Across the UK, early risers and late-night grafters—the men and women who channel their entrepreneurial spirits into businesses and serving their communities—form the backbone of our economy. However, we in this place sometimes let them down. That is certainly the case with the current nonsensical VAT registration threshold. Right now, businesses in the UK have to be VAT registered when their turnover reaches just £90,000—an arbitrary figure. Once a small business has crossed that cliff edge, it is hit with added regulatory compliance costs and the need to charge their customers 20% more for their services. I do not want to pre-empt the Minister’s response, but I am well aware of the fact that the UK has one of the highest thresholds in Europe—that is not the point. I am arguing for the boldness to unleash the Great British entrepreneurial spirit once again. Increasing the threshold to £90,000 was a positive move by the previous Conservative Government. I recognise the complexities surrounding the Windsor framework, but when we voted to leave the European Union in 2016, we wanted to take back control of our money, our borders and our laws. We should look at this again, and seek to also include Northern Ireland businesses with an increased VAT registration threshold. As a chartered accountant by profession, I have seen first hand the implications that the UK’s tax regime can have for businesses. I enjoy conversations about the economy and business growth, and one recent example from my constituency surgery stands out. I met with Chris and Annie Ensell, talented entrepreneurs running a thriving wedding photography business called Bloom Weddings. Joined by their daughter, they told me of their success and their frustration. They had both become increasingly concerned about approaching and potentially surpassing the VAT registration threshold cliff edge. They now face the agonising decision between limiting the number of weddings they agree to service or passing on increased costs to their customers, which would limit their competitiveness. I ask the Minister—who is part of a Government that say they are going for growth—is that fair? How will this encourage more people like Chris and Annie to build up their businesses? In the Government’s manifesto, they claimed they understand that small firms, entrepreneurs and the self-employed face unique challenges, but we have seen them eat into small to medium-sized enterprise profit margins by increasing national insurance contributions and the national minimum wage. We have also seen them add more regulatory burdens with the Employment Rights Bill, which is set to add £5 billion to the costs of UK businesses. However, today is an opportunity to for the Minister to show real support for small businesses, such as those in my Mid Leicestershire constituency, by committing to review the VAT registration threshold. I regret to say that I am not overly optimistic. When the previous Government rightly increased the threshold, Sir Edward Troup, a Labour tax adviser, ridiculed the idea, claiming that halving the threshold would somehow encourage growth. Perhaps even more shockingly, the current Under-Secretary of State for Work and Pensions, the hon. Member for Swansea West (Torsten Bell), has proposed slashing the threshold to a derisory £30,000.
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VAT Registration Threshold: SMEs
I absolutely agree. Over the last year, particularly in the Budget and recent announcements, we have seen measures that stifle the growth of SMEs and small businesses. I thank my hon. Friend for raising that today because I am passionate about supporting them, not only so that the economy can grow, but so that we can create jobs and opportunities for all. I will always support small family businesses, and I will never support proposals to slash the VAT threshold to such low levels. What is even more frustrating is the fact that the voice of industry has not been heard; its calls have fallen on deaf ears. The Federation of Small Businesses has previously highlighted that the extra bureaucracy of being VAT-registered adds £4,100 on average to the running costs of a business. UKHospitality also notes that there have been missed opportunities to be bolder and to alleviate regulatory burdens on the hospitality sector.
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VAT Registration Threshold: SMEs
I thank the hon. Member for his intervention and I absolutely agree. As a Unionist myself, I want to see all parts of the UK thrive and grow, and that obviously includes Northern Ireland. This debate equally applies to Northern Ireland as it does to everywhere else in the Union. I was talking about UKHospitality, which says it would like to see the VAT rate cut to 12.5% for the industry. I think that proposal has merits and I encourage the Minister to consider it. Finally, I recently met the Institute of Chartered Accountants in England and Wales and it was clear that confidence among small businesses is in decline. The ICAEW would like to see the whole VAT system simplified and the registration threshold reviewed. That would reduce compliance costs, but it would also enable small businesses to grow beyond the restrictive cliff edge that is currently in place. The Minister may not be a fan of Margaret Thatcher, our first female Prime Minister, but she believed that if people work hard, they should have the opportunity to succeed, and that the Government’s role is to create the conditions for that success. That was why she launched the enterprise allowance scheme, which helped to create now-famous brands such as Superdry and Creation Records. However, if the Minister wants a more contemporary example of a state supporting businesses to grow, he should look at our good friends in Singapore. First, as is well-documented, corporation tax in Singapore is low, but in addition small businesses in Singapore have the pioneer certificate incentive, which encourages start-ups in undersubscribed industries. I am not asking the Minister for such a scheme here—I know that that would perhaps be too bold—but what I am asking for is a modest and sensible change that would make a real difference to entrepreneurs across the country. Raise the VAT registration threshold; push it beyond £90,000. Do it for the small businesses that want to grow, to diversify and to serve their communities, but also do it for the economy and for consumers, who will benefit from lower prices and greater choice. Above all, do it for the spirit of enterprise that has always defined the United Kingdom.
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VAT Registration Threshold: SMEs
I thank the Minister for his speech. I ask him to take back to the Treasury the various arguments that have been put forward today, particularly about the benefits for the broader economy and for our local communities that could be achieved by reviewing the VAT registration threshold. I thank the hon. Member for Mid Dunbartonshire (Susan Murray), who spoke about the benefits of doing so. She said that local businesses foster community pride, but that the tax system is very complicated for them. I thank my hon. Friend the Member for Broxbourne (Lewis Cocking), who said he is frustrated that the current system does not have a taper mechanism. I ask the Minister to look at that and consider my hon. Friend’s arguments about how that would benefit small businesses—particularly those that wish to grow. I thank my hon. Friend the Member for Keighley and Ilkley (Robbie Moore), particularly for his arguments about the fish and chip shop industry and similar small businesses that are holding back their growth because they are on the cusp of the registration threshold. If they surpass it, additional costs and burdens will be placed on them. The hon. Member for Strangford (Jim Shannon) spoke about his frustrations, which I share, about how the Windsor framework constricts businesses in Northern Ireland and prevents them from being more competitive and on a par with those in the rest of the United Kingdom. I appreciate the intervention of the hon. Member for East Londonderry (Mr Campbell) on the same point. I thank the hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald), who has particular expertise with VAT. As someone who holds apprenticeships and skills training in high regard, I appreciate his point that reviewing the threshold could enable smaller businesses to take on additional employees and train them in the trades that we need. Plumbers, electricians and other trades would really benefit from apprenticeships and similar types of training. I thank the hon. Member for St Albans (Daisy Cooper), who spoke about the need for small businesses to be better supported, particularly by the Treasury, in dealing with the bureaucracy. She said that small businesses do not have the advantage of large HR functions or support networks to get them through the bureaucracy. I thank my hon. Friend the Member for Grantham and Bourne (Gareth Davies) for his points. He said that three fifths of employment in this country is in a small business, and that, particularly over the last year, businesses have had to contend with significant challenges posed by the new Government’s economic plan, including the national insurance hike, the business rates increase and the additional burdens placed on businesses by the Employment Rights Bill. Question put and agreed to. Resolved, That this House has considered the impact of the VAT registration threshold on SMEs.
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War Memorials
It is a pleasure to serve under your chairmanship, Mr Stuart, as we debate the important topic of war memorials and the fallen whom they commemorate. I congratulate the hon. Member for Cowdenbeath and Kirkcaldy (Melanie Ward) on securing this debate. It seems fitting that we are debating this topic in Parliament during Armed Forces Week. According to estimates from the War Memorials Trust, a charity that works to protect and conserve war memorials, there are more than 100,000 war memorials across the United Kingdom. They range in size and style—from the Cenotaph in Whitehall, around which we centre our national act of remembrance every November, to the National Memorial Arboretum in Staffordshire, down to the humblest war memorials in small hamlets across the country, and even the individual headstones in churchyards throughout the length and breadth of the United Kingdom. My first official duty, when I had the privilege of becoming the Veterans Minister in the Ministry of Defence back in 2012, was to travel to the National Memorial Arboretum and to lay a wreath to commemorate the sacrifice of our armed forces personnel down the ages. There are now over 100 different types of memorial at the arboretum, and we have heard from several hon. Members of further ones to follow, which I welcome. I was there most recently last August, when a special ceremony was held to mark the presentation of a cheque for £250,000 from Mr Craig Moule, the industrious chief executive of Sanctuary housing association, to the Soldiers’, Sailors’ and Airmen’s Families Association—commonly known as SSAFA—whose tie I am honoured to be wearing this afternoon. A crucial role in the preservation of war memorials is undertaken by the Commonwealth War Graves Commission, which was founded by royal charter in 1917, before the first world war had even ended. It works on behalf of the Governments of Australia, Canada, India, New Zealand, South Africa and the United Kingdom to commemorate the 1.7 million men and women from the Commonwealth who lost their lives in now two world wars. The commission’s declared mission is “to ensure those who died in service, or as a result of conflict, are commemorated so that they, and the human cost of war, are remembered for ever.” Down the years I have visited a number of the commission’s memorials, particularly those on the western front, such as the one at Thiepval, which commemorates the fallen at the battle of the Somme, and Tyne Cot for those who fell at Passchendaele.
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War Memorials
The hon. Gentleman pre-empts me, but for the avoidance of doubt, most certainly—I am a great fan of the commission. In total, the commission cares for large memorials down to individual graves in some 23,000 locations, encompassing more than 150 countries and territories around the world. I recently visited Rayleigh cemetery in the heart of my constituency. It has a number of individual wartime graves, which are beautifully tended by the commission. In this context, I highlight a book published earlier this year by the acknowledged author Dr Tessa Dunlop, entitled simply, “Lest We Forget” with the subtitle “War and Peace in 100 British Monuments”. This excellent book summarises a whole variety of war memorials, commemorating events dating back to Roman times, right up to the present day. For the avoidance of doubt. I am not on commission from Dr Dunlop’s publishers, but I did meet her during the production of the book, not least because the 99th in her century of war memorials is located in my constituency at a place called Aaron Lewis Close in Hawkwell. Lieutenant Aaron Lewis was a commando gunner from 29 Commando Regiment, who was tragically killed during a mission in Afghanistan back in 2008. Working with the local authority, Rochford district council and the then-developer David Wilson Homes, we managed to arrange for a small square on that new development to be named in Aaron’s honour. At its centre is a memorial garden with a carved bench which commemorates Aaron’s service. For her book, Tessa Dunlop interviewed Helen Lewis, Aaron’s mother, who along with her husband Barry, have channelled their understandable grief at the loss of their son to create a wonderful charity called the Aaron Lewis Foundation, which has helped to raise hundreds of thousands of pounds, including to provide rehabilitation equipment for wounded service personnel. Similarly, we now also have Samuel Bailey Drive in Hockley, named after Squadron Leader Sam Bailey, an RAF navigator who died in a tragic mid-air collision between two RAF tornadoes flying out of RAF Lossiemouth over a decade ago. There are 2,000 or more military charities in this country, ranging from the Royal British Legion, Help for Heroes and SSAFA, down to individual charities often founded by family members following the death of a loved one in combat. Clearly, it would be impossible, to name all of those charities this afternoon, but nevertheless, I should like to pay tribute to the work of all of them collectively. To paraphrase that famous wartime medley, when talking about the plethora of military charities we have in this country, perhaps I could just say, “Bless them all, the long and the short and the tall”. Dr Tessa Dunlop has written an exceptional book, and I can thoroughly commend it to anyone who is interested in the whole subject of war memorials and everything they represent. I think we have 13 minutes left, Mr Stuart, so I will just take two more.
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War Memorials
Although I have already mentioned the National Memorial Arboretum, I would be failing in my duty as an Essex MP were I not to highlight Essex’s own version, which is known as the Living Memorial, at White House Farm in Rettendon. It was founded by enlightened landowners, Peter and Fran Theobald, a former RAF servicewoman, in 2009. I have visited a number of times down the years, including at the dedication of a memorial organised by the Rayleigh branch of the Royal Naval Association, of which I have the honour of being a member.
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War Memorials
We have got 12 minutes left, sir.