Showing every spoken contribution, including 5,779 under 12 words. Hide short remarks
Perhaps the Prime Minister knows something I do not, because there is only one hospital in my constituency. Since Labour took office, inflation has nearly doubled, growth has halved and unemployment has surged. Is this what the Prime Minister meant when he tweeted that “The economy is improving”?
The Prime Minister must be talking about a different economy. All of us in this House heard about unemployment increasing—unemployment has increased every month since Labour took office. Last year, the Prime Minister said that he was taking the winter fuel payment away to balance the books, but the books are not balanced; in fact, they are worse. This year, the deficit is forecast to be £10 billion higher since the Budget—not since last year’s election, but since the Budget. In what way are the books now balanced?
The Prime Minister loves talking about Liz Truss. Why? Because he wants to hide from his own economic record. He is a coward. Every time he stands at the Dispatch Box and talks about Liz Truss, it is because he is scared of talking about his record and what is happening to the economy out there. Let us bring the Prime Minister back to the U-turn that he is running away from—a U-turn on a policy that his MPs went out defending time and again. Let us go through what is happening here. One minute, they said that it was right to take the winter fuel payment away, because there might be a run on the pound; the next minute, they said it was right to give it back. This is laughable. The Prime Minister stands there, all puffed up and self-righteous. Why can he not just admit that he made a mistake?
I get better every week; the Prime Minister gets worse. Last week—[Interruption.]
Last week, the Prime Minister had to get his lines from the Russian embassy. I think we all know that he is getting worse, and what he does not want to talk about is how he is going to make the economy better. That is what the people out there want to hear, and he has got no answers. His trade deals have unravelled. With the strategic defence review, everyone out there is asking where the money is coming from. The fact is that he does not know how to balance the books. The Chancellor says that the winter fuel payment U-turn will not be funded through higher borrowing, so will the Prime Minister admit that it will be funded by putting everybody’s taxes up?
Every week I come here to tell the Prime Minister the truth. The truth is that the economy is in a spiral because Labour—all of them—put up taxes, which cuts growth. We all heard the Prime Minister. He did not rule out tax rises, so the Government are going to have to put up taxes even more. This is a spiral. If that was not bad enough, this morning we heard that because of his terrible Chagos deal, Mauritius is scrapping income tax. Why on earth should the British taxpayer pay £30 billion for tax cuts in Mauritius?
The Prime Minister knows this has nothing to do with national security; it is his bad negotiating. I have had the security briefings; it was a bad deal before, and it is still a bad deal. In half an hour, the Chancellor is going to stand up and tell us that everything is fine, but the truth is that she has made bad choices—bad choices that mean higher inflation, bad choices that have led to lower growth, and bad choices that have meant that jobs have been lost every single month since Labour came into office. That is hundreds of thousands of families who have lost their income in Stoke, Grangemouth and Luton. Those are their constituencies and businesses across the country. The Chancellor has lost all her headroom. She has fallen out with the Cabinet. She is making unfunded spending commitments, which she promised not to do. Is the truth not that we have got the wrong Chancellor and the wrong priorities?
It is a disaster.
Given how precarious global affairs are, Conservatives believe that defence, and defence jobs, should be a No. 1 priority for the Labour-controlled Wales Office. Major defence companies, such as General Dynamics in Merthyr and Caerphilly, and Tekever in Ceredigion, among others, await answers. Plaid wants to break up the cherished Union, withdraw Wales’s full membership from NATO and surrender our nuclear defence system. Is the Minister seriously concerned about that, and if so, will she rule out her Labour Senedd colleagues ever forming a coalition with the nationalists in an expanded Cardiff Bay?
Does the Minister prefer peanuts, cashew nuts or simply scraps for Wales? The fabled “two Labour Governments in lockstep” is simply a myth for voters. Changing rail classifications and short-changing Welsh communities is a true reality. Is the Minister concerned about today’s reported peanuts? When did she become aware of the paltry settlement of just over £400 million that is to come to Wales? How will that be split for the Welsh Government? How does it compare with our Government’s £740 million for rail alone? What specific action did she take to argue for a fair share for Wales, and for its place in the Union?
Turbocharging the Welsh economy—and the economy at large, frankly—is vital for social mobility and prosperity. We Conservatives delivered two Welsh investment zones, two freeports, more than £1 billion in extra funding, and we helped more than 2 million women into the jobs market across the UK. Yet the UK and Welsh Labour Governments are undoing that work. Their jobs tax, their tourism tax and the 20 mph default speed limit are a hammer blow to business confidence, particularly in the hospitality sector. Disgracefully, the unemployment rate for young women in Wales is up by 4.6%. Will the Secretary of State join me in calling for those damaging policies to be dropped so that our young women can get into the workforce and progress?
Of course I welcome the continuing support for Scunthorpe steelworks, but may I gently remind the Chancellor that that support came seven months after I first raised the issue in the House, and we then had the panic of the Saturday sitting in April? The Chancellor mentioned support for the Viking carbon capture and storage project, for which, again, I have lobbied for a long time. Can she give me a little more detail about the timeframe?
I beg to move, That this House has considered the impact of the space industry on the economy. I draw Members’ attention to my entry in the Register of Members’ Financial Interests and to my non-financial interests. For the purposes of this important debate, I speak as the chair of the all-party parliamentary group for space. The global space industry is set to expand over the coming years as businesses take advantage of the huge drop in launch costs driven by tech billionaires such as Elon Musk with his SpaceX business and Jeff Bezos with Blue Origin. No longer is space the sole domain of Governments; it is available to everyone with an idea of how to exploit the opportunities that space presents. Indeed, the global space economy in 2023 was valued at about $630 billion, but that number is expected to expand to $1.8 trillion by 2035—a compound annual growth rate of about 9%. Some optimists expect growth to outpace even that impressive figure, with expectations reaching as high as $2.2 trillion by 2035. Even for the most pessimistic economist, however, it is expected to still exceed $1.2 trillion, a figure that sees the global space industry outpacing global GDP over that period. As I said, that growth is being driven by the 90% drop in launch costs over the last 20 years, but it is also being driven by commercial innovation in areas such as components and software. As clever people invent ever more clever things, deploying assets in the harsh and complicated area of space is becoming increasingly affordable. In turn, that has driven a broad set of investors to look to space for opportunities. Meanwhile, we have all become more relaxed and enthusiastic about the idea of space as a commercial entity in itself, and we already know that space has changed our lives enormously. After all, we have no excuse not to find a location or a fast route to a destination, now that we all have satellite navigation in our pockets. That technology will enable fresh, new technologies. Companies such as Amazon are already looking at rolling out drone delivery services enabled by satellite navigation, and that will expand to things like driverless Uber taxis as we advance our driverless technologies. It is already the case that the technology behind satellite navigation goes far beyond just letting us know where the nearest pub is. Position, navigation and timing technology, or PNT, provides timing signals that enable our payment system. Who here realised that buying a ticket on the tube this morning, coming into work, was enabled by a satellite passing overhead at 17,600 mph? According to a 2024 report by McKinsey, 60% of the growth in the space economy will be driven by five industries: state-sponsored defence, digital communications, supply chain and transportation, food and beverages, and consumer goods and lifestyle. The report also pointed out that space’s return on investment will be more than just financial. Space will play an increasingly crucial role in mitigating world challenges, ranging from disaster warning and climate monitoring to improved humanitarian responses and more widespread prosperity. That is the fabulous opportunity globally, but what of the UK’s ambitions? Back in 2013, the UK Government set a plan to secure 10% of the global space economy. That plan would have given us about £180 billion of activity by 2035, but it feels like that ambition has been quietly dropped—not necessarily by this Government, but certainly over the closing years of the previous Government. The UK space economy is valued at about £19 billion and supports some 52,000 jobs through nearly 2,000 businesses. That is a good start, but we need to be more ambitious. We need to decide what role we want to play in the global space economy, not least because the space economy will help us to address our productivity problems here in the UK. At one end of the spectrum is the business of launch. Launch is, of course, a small part of the space economy, at about 10%—but launch is, to the purist, not really space. For sure, the space economy cannot exist without launch, but it is an enabler; it is logistics; it is the white delivery van of the space sector. It is, however, the most symbolic part of the space sector. It is the piece that fires the imagination; it is the image that excites people to follow space as a sector. We have already had a successful horizontal launch from Newquay. Every part of the Newquay spaceport worked perfectly. The rocket separated from its Boeing 747 and successfully deployed the second stage into space. However, as we all know, a fuel filter in the Virgin second stage failed and the flight was lost, but Newquay performed in every way that it should have done. Later this year we will see the first vertical launch from the far north of the Shetlands. The SaxaVord spaceport has been working for years to develop the launch site, and it is entirely possible that the first launch from British soil will be with the British launch company Orbex. The Government have financially supported both Orbex and the SaxaVord space centre, but those are private companies that also have private investors, which is crucial for the space sector. Unfortunately the right hon. Member for Orkney and Shetland (Mr Carmichael) cannot be here. He has had a prior engagement in his diary for a long time to go and judge a Blackface sheep competition, which he has to go to, but he has been instrumental in the success of the SaxaVord space centre, which has done an incredible job in delivering the first vertical launch from the UK. Continued Government support for our launch sector is important. The Government have supported Orbex to the tune of £20 million this year, and that will pay for the development of low Earth orbit launches from SaxaVord. Orbex is keen to develop its product range, and its next milestone is medium Earth orbit with heavier payloads. Support for it to develop its next generation launchers could come from the European Space Agency and its European launcher challenge. The ELC programme is designed to turbocharge European launch opportunities. With demand rising and the queue for SpaceX launches getting ever longer, there is a huge opportunity in Europe with the UK leading the charge. That is why the UK Space Agency is keen that the UK continues to support membership of the European Space Agency and its support for the ELC. Imagine our joy as a nation, with the Minister as the person partly in charge, when we see a British-designed and built rocket thrust skywards from British soil later this year. It will be a moment of intense national pride. But it is important that we have a follow-up to that key moment. We need to define what our ambition is for space and, to a certain extent, what we mean by “space”. The last Government published a space strategy, but that was seen at the time as more of a list of hopes—a kind of manifesto, rather than a strategy with tactics and ambitions. We need to be clear about what it is that we want to do in this area that will undoubtedly increase UK productivity. We already know and recognise that the UK space economy broadly falls into five sectors. First, we have a strong service sector of downstream applications that are driven by satellites. This is the largest sector and includes satellite communications, Earth observation and navigation and timing services. Those sectors, as I have mentioned, power sectors such as agriculture, climate monitoring, finance, transport, humanitarian relief and defence applications. Because of the ever-increasing demand for data, the service sector is a lead growth driver for the space economy. Second is our manufacturing and engineering sector, which manufactures rockets and satellites. The UK is a leader in small satellite manufacturing through companies such as Surrey Satellite Technology. But within this sector we have fascinating companies such as Magdrive, looking to develop non-chemical drive systems for in-orbit manoeuvring that will extend the life of a satellite significantly and, I believe, as much as twentyfold. We also have lead companies here in the UK that look at the sustainability of space: Astroscale and ClearSpace. Both of them are excited about the upcoming announcement of a UK sovereign mission to literally clean up space debris. It would be helpful if the Minister could perhaps give us a clue about how that is progressing. Then we have spaceports and launch—that great symbol of a spacefaring nation that I have already spoken about. Fourth is research and development, an area we have been strong at for decades. We are proud to have strong academic institutions doing extraordinary work in forging new technologies, including areas such as in-space manufacturing, where zero gravity makes for an interesting formation of crystalline materials. Fifth is space data and analytics, driven by huge leaps forward in artificial intelligence and big data. But we should not see space as just about space stuff. I have long argued that we need to ensure we maximise the opportunity across all sectors of our economy, and that brings me to finance. The City of London has been innovative in finance for a few centuries now. It financed the growth of trade that built the British empire and our economy. Right now we have an opportunity here in London to seize the space finance markets. I look back at the inspiration given by the former Member for Kirkcaldy and Cowdenbeath when he was Chancellor of the Exchequer in the late 1990s. He saw an opportunity in the flagging UK film industry, so he created a financial trigger to encourage investment into that industry. Despite being abused by some who benefited from it, his tax break created investment into our film industry that has been transformational. The success of the UK film industry can trace its origins back to that single act. The Harry Potter franchise would have always been a huge success, but were it not for that single act of tax planning, those spells would almost certainly have been cast with an American accent. That single act of tax planning can be adopted for the UK space industry. It does not need to be complicated, and it would generate more income for the economy than it would cost. Something as simple as, for example, tax-free commissions on space-related primary issues of bonds and equities would send a signal to the world’s top space financiers that the UK will be the centre of excellence for space finance. With all these bright financial wizards here in the City of London, space companies would be attracted to locate right here, to secure the finance and list on the London stock exchange. It does not stop there. Our already strong space insurance market would get even stronger. Space legal services would grow. Our position as a global thought leader in the future of space would blossom, and—importantly, for our valuable financial services industry—the City would continue to be at the cutting edge of developing financial needs. It would create a symbiotic relationship between financial services, in which we are already world leaders, and the global space industry, in which we want to be among the world leaders. I have spoken about how the Government can support the space sector, but I want to talk more about how the Government can be a customer of the space sector, and that brings me to the strategic defence review. The SDR looks good for space. It identifies the three main areas in which space is relevant to the Ministry of Defence. Watching situations develop from the height of space gives a spacefaring nation a tactical advantage over aggressors who do not have those advantages. We can not only look at the ground with the normal vision spectrum but use infrared Earth observation, which gives us the opportunity to spot a column of Russian tanks warming their engines in the dead of night ahead of an early invasion. Meanwhile, radio frequency observation gives us a chance not only to listen but to see where the enemy’s actors are located in a battlefield. We can see all sorts of activities across a range of spectra, in surprising detail. Similarly, the SDR recognises that space gives us the advantage when responding to threats. Battlefield management and response can be orchestrated from space—again, giving us a tactical advantage. Of course, the SDR recognises that these space assets are, in themselves, a potential target, so defence of the space domain becomes as important a part of the MOD’s activities as defence of our own territories. Indeed, it is not just the MOD’s assets that need defending. While things such as Skynet are important to the MOD, position, navigation and timing satellites are important to our economy. As I mentioned, if we lose navigation satellites, we lose our entire payments system. The SDR provides an opportunity for the UK space sector, and the trade body, UKspace, has already published an intelligent briefing note on the SDR, giving advice to members on how to take advantage of the review and what it means for the sector. It is optimistic, and so am I. Although the space section of the SDR’s 145 pages amounts to just one and a half pages, the document presents a lot of opportunities. The commitment to spend 3% of GDP on defence, and defence that seeks ever greater technologies, should be seen as a huge opportunity for the sector. The document recognises that defence procurement is unfathomable for all but those with extensive experience—the primes. The review seeks ways of opening up Ministry of Defence procurement to small and medium-sized enterprises, which is a very good thing. The MOD, acting as the Government as a customer for space, must be easy to navigate for those wanting to sell and to support the Government. The SDR raised one area of concern, which is where space sits in Government and who champions it. The SDR suggests a Cabinet Sub-Committee or ministerial group that looks after space. I have seen this before, having been on the ministerial group of 12, from memory, who could claim an interest in space. Back in 2017, it included the science Minister who had the lead in his portfolio, me as a trade Minister, a Minister from the Department for Exiting the European Union, and Ministers from the Department for International Development, the Foreign, Commonwealth and Development Office, the Department for Business, Energy and Industrial Strategy, the Ministry of Defence and anybody else we could think of. Some Ministers did not have a clue why they were on it. Others did not have much of an interest. In due course, space became a Cabinet Sub-Committee, chaired at the start by the Chancellor of the Exchequer and then by the Prime Minister. It met just once, I believe, and it was obsessed by launch, which is important but, as I have mentioned, represents just 10% of the space economy. The problem is that space is both unique and ubiquitous. For a launch site operator, it is real estate. For a launch company, it is logistics. For PNT users, it is supply chain management. For internet users, it is data. For most, it is commercial. It is located in the Department for Science, Innovation and Technology, but most would agree at this stage of the cycle that one thing space is not is a science project. That is not to level criticism at either the DSIT Secretary or his civil servants, who do an excellent job of championing the sector. Should space be in the Department for Business and Trade? That is an interesting question. I am delighted to see the Minister from DBT here today, who is responding on the commercial aspects of space—a side of space that is bigger, more important and more relevant to our economy than the simple science of it. However, the sector would far prefer the lead Department to be the Cabinet Office, as it crosses so many Departments—that is what organisations such as UKspace are saying. I will finish with an example that illustrates the point. I chair the advisory board of the Space Energy Initiative and am a non-executive director of Space Solar Limited, with no financial interest in either. That is a good example of how space will deliver something vital for humanity, which is energy. Humanity has always needed energy and developing energy has progressed our societies. We started as hunter-gatherers thousands of years ago, but after we learned how to farm and ensure regular calories for ourselves, we developed the skills that gave us civilisation and culture. When we figured out that coal produced more energy than wood, we started the industrial revolution that continues today. But we now realise that we need to produce energy at ever-increasing levels. Indeed, we heard in yesterday’s statement that the UK will need twice the capacity by 2050, and I wager that we will need it earlier than that. We need to deliver that capacity sustainably. Demand for energy will go through the roof: by 2030, the US will be producing around 4,000 TWh of electricity a year. Just one need, global artificial intelligence, will demand more than that. As we are all moving to electric vehicles too, we can see the colossal problem facing us. Nuclear is good, and we heard yesterday that there will be plenty of opportunity, but it will take time, be expensive, and produce waste that is tricky to deal with. Wind and solar are renewable and relatively cheap, but they are not baseload and not dispatchable. They cannot be predictably turned on and off as demand changes. Gas is both baseload and dispatchable, but we want to move away from gas for good reasons. Biomass is not what we thought it was, and nuclear fusion is a distant dream. We need something that is sustainable, baseload, dispatchable and cheap—step forward, space-based solar power. Sounding like the stuff of science fiction, it has been possible for decades. Photovoltaics in space have been around since Sputnik 2 was launched in November 1957. Energy beaming was developed by Nikola Tesla in the 1880s, and we are familiar with it every time we listen to Radio 4 in the morning and hear one of our colleagues being beaten up by Nick Robinson. What has changed is a 90% reduction in the cost of launch. That makes the economic model feasible, so space-based solar power is developing at pace around the world. The lead development, with what we believe is the best technology, is right here in the UK in Harwell. I am pleased that the Government have supported the development of this leading technology with £10 million so far. We have seen support from the European Space Agency’s SOLARIS project, other innovation projects and a range of companies and universities. When I first pitched this to an Energy Minister under the previous Government, he said, “Yeah, but it’s space, no?” I pointed out that nuclear power is not part of the Department for Environment, Food and Rural Affairs because it is built on farmland, and he eventually got the point. That illustrates how the Government can make mistakes by looking at where space is, not what space is. Space energy solves a load of problems. Because a beam can be moved near instantaneously, it can not only provide gigawatts of energy but balance the grid very simply. Electricity can be exported to eastern economies before we wake up, and to the US when we sleep and demand here is low, improving our export opportunities and balance of payments. It is dispatchable, baseload, cheap and green. It will transform our economy with endless cheap, reliable energy. We have had good support from the Department for Energy Security and Net Zero, but the first power will not be delivered before 2032, falling outside the Government’s target of carbon neutrality by 2030. Because of that arbitrary political target, we run the risk of losing the space energy race to other nations. Although space-based solar power is an energy play, pure and simple, the associated engineering technology will transform our space sector. With satellites that are kilometres across, robotics are being developed in the UK to enable the manufacture and assembly of those satellites in orbit. The technology will enable the UK to take a lead in developing in-orbit assembly, thus further securing our place as a leading space nation. We have the opportunity here and now to lead in energy—our most critical need and asset—and in the space sector. In yesterday’s statement, DESNZ made an interesting choice. Space energy can deliver gigawatts of space-based solar power within a decade, but the Government have chosen to invest £2.5 billion in nuclear fusion. There is no doubt that space energy is an engineering challenge, but nuclear fusion is a substantial physics challenge. I ask the Minister to come up and see for herself what genius is happening right here in the UK. We have an opportunity to seize the moment, but we must not be left behind. Space is not just about where something is; it is about what it enables. Seizing both the metaphorical and literal high ground that space presents is vital for our economy, our productivity, our energy, our services and, frankly, how we save the planet.
I thank all Members who made a contribution to the debate. It has been fantastic to hear from the hon. Members for Strangford (Jim Shannon), for Congleton (Sarah Russell), for St Ives (Andrew George), for Truro and Falmouth (Jayne Kirkham) and for Stockton North (Chris McDonald), as well as the Front-Bench contributions from the hon. Member for Harpenden and Berkhamsted (Victoria Collins) and my hon. Friend the Member for Mid Buckinghamshire (Greg Smith). It is a great pleasure to see so many different people and so many new MPs contribute to this debate from such diverse parts of the world, rather than just hearing the same old characters talking about the same old stuff—
The hon. Gentleman is always here. A number of important things have come up in this debate, one of which is the importance of the clusters. We have heard talk the north-east cluster and the Cornwall cluster. For me, Cornwall is incredibly important: as the hon. Member for St Ives knows, my spiritual home is in Newlyn. My grandparents were Newlyn school artists, and I was brought up looking across Mount’s bay to Goonhilly downs. We also heard how Jodrell Bank is incredibly important as an inspiration; I remember being inspired by what was going on there as a child back in the 60s. We can see that there are extraordinary opportunities. Businesses across the whole of the country are involved in the space sector. We are seeing extraordinary things going on in, for example, Northern Ireland, which has a very good aerospace legacy. Queen’s University Belfast is using that legacy in looking at the phased array antennas that are being designed and built to enable space-based solar power. That is an incredibly important and successful piece of work. When we eventually get to the stage in which space-based solar power stations are beaming energy back to Earth, Queen’s University Belfast will have been absolutely instrumental. I have been heartened by the views of many Members. The clusters are very good, and Members will be pleased to hear that I know all the cluster chiefs, one way or another. In Cornwall, Gail Eastaugh is the pushiest of them all. She is truly dynamic and an absolute advocate for Cornwall. We had a drop-by space event a few months ago to promote the space cluster; people turned up with their little banners, but Gail brought something the size of the Chamber wall in order to promote Cornwall—it was very good. The hon. Member for Truro and Falmouth made a point about Newquay spaceport, which we must remember was a success. It was not the Newquay spaceport that got it wrong; a fuel filter in a Virgin rocket got it wrong. We must never forget that everything we wanted to do was a brilliant success. I thank the Minister and the shadow Ministers, my hon. Friend the Member for Mid Buckinghamshire and the hon. Member for Harpenden and Berkhamsted, for their contributions. The sector is very exciting, and I get the sense that people are unified behind all this. We know there is a grand strategy and we want to be dominant in the sector. We might have disagreements or arguments over the tactics to achieve that, but if we share the common vision of a grand strategy, we can get there. It is incredibly important for our economy, our productivity and the future. As a mature economy we need to find ways to be increasingly productive in order to deliver a better quality of life for everybody, and space will absolutely deliver that. The Minister spoke about the industrial strategy, and in a couple of weeks I will take a forensic look at that. The global space finance summit at the end of the year is so important. We have a lot of important sectors in the UK economy that we take for granted, and those sectors need space as much as space needs those sectors. If we want to continue to be relevant in the financial services sector, we have to be relevant for the most modern type of finance and the most modern types of opportunities. That is why we have to be good at space finance and think carefully about it. I would very much like an invitation to come along and speak at the summit. I thank everybody who contributed to the debate. I get the sense that there is a strong unity of vision in the room, and this is a fantastic opportunity. As they say, to infinity and beyond! Question put and agreed to. Resolved, That this House has considered the impact of the space industry on the economy.
I thank the Chancellor for her statement, but I fear that she may have misunderstood the question that my hon. Friend the Member for Runnymede and Weybridge (Dr Spencer) asked about the River Thames scheme. He asked whether the scheme is included in the £4.2 billion TDEL—total departmental expenditure limit—over three years referenced in paragraph 5.121 of the review. The Chancellor replied that my hon. Friend wants to put up expenditure and will not say where it is coming from, but both he and I are asking this: is the Environment Agency’s half of the River Thames scheme—Surrey county council pays the other half—funded from the £4.2 billion TDEL that she has announced today?
It is a pleasure to contribute to the debate, Dr Huq. In every Budget that I have seen over the past 15 years, either as a Treasury Minister or as a constituency MP, more money—whether it is 1%, 2% or 3% more—has gone into the NHS, yet there is still a demand for even more money at the next fiscal event. In the south-west, there are 5.7 million people, 30% of whom live in rural areas. We will always have limited resources, so we have to be radical in organising them differently. I urge the Minister to look at not just how we deal with care based on the physical location of acute hospitals, but how we deliver more localised digital care and investment in relevant digital infrastructure. The chief executive of the Bath, Swindon and Wiltshire hospitals group tells me that a national approach to AI would be hugely welcome to unlock the delivery of radiology, pathology, clinical administration and risk stratification in a much more effective way. We have to level with our constituents that services cannot all be delivered at the local hospital if we are going to have the best service and the appropriate aggregation. I urge the Minister to address the issue of digital systems. How can we bring them to a different level and deal with demand management? Demand is outstripping supply, and we have to look at investment in public health. To that end, I urge her not to move most of the Porton Down campus to Harlow, which would save a considerable sum of money that we could use in the south-west.
Scientists at the UK Health Security Agency at Porton Down make a massive contribution to the welfare of our country in difficult times. Ten years ago, the Chancellor’s predecessor wanted to invest £525 million in moving to a single science hub in Harlow. Some £400 million has already been spent, and last year, the National Audit Office said that it would cost £3.2 billion to complete the move by 2036. Three weeks ago, I had an Adjournment debate in which I was told that today, we would know the outcome of what was actually going to happen with this project. Can the Chancellor explain what is happening with the future of the UKHSA at Porton Down? Is it going to move to Harlow, at massive expense—six times the original estimate—and 15 years later than was estimated, or can we save some money and use it for better investment in our public estate?
The Minister sounds unexpectedly optimistic, given that so many question marks remain over promises and aspirations for defence spending. Can she confirm the impact of handing over the Chagos islands and billions of pounds to Mauritius? [Interruption.] Can she confirm the impact of that decision on Wales?
7. What discussions she has had with the Welsh Government on the future of nuclear power in Wales.
Wales has incredible potential for the next generation of nuclear, but Labour’s announcement yesterday is a fraction of what is needed. Green baseload power that stabilises our grid enhances power generation, as it has done before in Anglesey. Will the Minister give a clearer answer today to confirm that Wales will be a key part of new nuclear, building on Conservative work supporting Welsh nuclear, or will this be another failure to deliver for these communities under Labour?
It is a pleasure to serve under your chairmanship, Mr Betts. I congratulate my hon. Friend the Member for Wyre Forest (Mark Garnier) not only on securing this debate, but on his comprehensive opening speech—his knowledge is almost encyclopaedic. I also thank him for the leadership that he has shown on space in this Parliament and previous Parliaments, in particular as chairman of the all-party parliamentary group for space. We have had a very good debate this morning, with contributions of great quality from both sides of the House. In that cross-party spirit, let me say that the hon. Member for Stockton North (Chris McDonald), in particular, hit many nails directly on the head. We clearly share an interest in the Satellite Applications Catapult, which has a base in my constituency, although I detected a note of disdain in his voice when he talked about battered Land Rovers. I would argue that a battered Land Rover is a sign that that great miracle of British engineering has been used properly and to its full capability. It is a privilege to speak in this important debate on the state of the United Kingdom’s space industry, a sector of strategic importance to our national economy, scientific capability and future prosperity. Let me begin by making one thing very clear: the United Kingdom has the potential to be a true spacefaring nation. We have the scientific expertise, entrepreneurial ambition and geographic advantage to build a world-leading domestic space sector. In my constituency, the space industry is totemic. From the Westcott space cluster and the national space propulsion centre at Westcott Venture Park, to UK Space Command’s headquarters and the national space operations centre at RAF High Wycombe at Walter’s Ash—the nation’s military hub for space operations, workforce development and space capability delivery—Mid Buckinghamshire stands out not only as a showcase for the space industry, but as an incubator for research and development. It is a true representation of the sector in its entirety. The Labour party came into office with a good promise of a bold new era for science and technology. Its manifesto committed to supporting high-growth sectors, including space, and spending on sovereign capabilities to secure Britain’s place on the global stage. I hope the Minister can confirm that all that will become a reality, because in practice—and the Opposition are right to challenge the Government and kick the tyres when good promises are made—we have seen little more than rhetoric and inaction so far. Since July 2024, the space sector has been left in policy limbo. Programmes vital to our future competitiveness have been stalled or scrapped. Promised investment zones with a focus on aerospace innovation have failed to materialise. I hope the Minister can correct that. The much vaunted Labour industrial strategy, which was supposed to support clusters in places such as Harwell, Leicester and Cornwall, remains a mystery. Perhaps she can confirm when we will finally see it. The consequences are tangible and severe. We are already seeing UK-based satellite developers and launch technology firms relocate to more supportive environments abroad. Domestic providers face growing uncertainty in accessing long-term capital, while investors are left wondering whether the Government have any meaningful plan to support this vital sector. That is a blow not just to British industry, but to local economies. The space industry is not confined to a few square miles of south-east England; it is an ecosystem that stretches from satellite testing in Glasgow, to launch infrastructure in the Shetlands and mission control in Oxfordshire. Cornwall, as others have spoken about, also plays an important role. Every contract cancelled and every research and development grant deferred is a missed opportunity for skilled employment in communities that need it most. By contrast, under the previous Conservative Government, in late 2023, UKSA launched its national innovation programme, with up to £65 million distributed over four years, including a £34 million first tranche aimed at low technology readiness level disruptive technologies. What of the young people inspired by the promise of a career in space science? The previous Conservative Government made education and outreach a priority. We backed science, technology, engineering and maths education, supported apprenticeships through the National Space Academy, and ensured that British students were represented in flagship European and international missions. Labour, by contrast, has made no clear commitment to supporting science education in the context of space, nor has it outlined any plan to secure future UK participation in global space exploration partnerships. I must also raise the issue of our highly specialist supply chain, which sees components built in Wales, avionics manufactured in the midlands, propulsion systems designed in Surrey, and the excellent work of the national space propulsion centre at Westcott in my constituency. These are the unsung heroes of the UK’s space sector. They rely on steady R&D investment and long-term procurement planning. However, Labour’s failure to provide certainty on either means that many of those SMEs face an existential threat. They are simply relying on measures that we originally put in place. The space industry, by its nature, is built on long-term vision. The last Conservative Government understood that. We launched the national space strategy, invested in sovereign launch capability through Spaceport Cornwall and SaxaVord, and worked to ensure that the UK could lead in space sustainability. We stood up for British science post Brexit by negotiating critical participation in global satellite projects. We now need a recommitment to that vision, which this Labour Government have so far failed to provide. When will the Government publish a revised and fully funded national space strategy? When will they provide certainty for R&D tax credits to incentivise investment? When will they deliver on their manifesto pledges to support sovereign UK capability in launch, satellite navigation and Earth observation? If they are serious about Britain being a science superpower, they must start treating the space industry as the strategic asset that it is; otherwise, we risk watching our world-class talent, our world-leading innovation and our national ambitions quite literally leave for other shores. Conservatives remain committed to the UK’s future in space technology. We will continue to make the case for ambition and leadership in a sector that speaks to the best of our country, scientifically, economically and aspirationally.
I commend the hon. Lady for her work. In the last Parliament, my private Member’s Bill received Royal Assent as the Equipment Theft (Prevention) Act 2023. It requires some statutory instruments to be passed, in the first instance on agricultural theft, but it is written in such a way that it can incorporate tool theft from builders’ vans and so on. Does she agree that a necessary first step in tackling this scourge is getting those SIs made?
Before I begin, I draw the House’s attention to my entry in the Register of Members’ Financial Interests, with respect to a donation from P1 Fuels. Although it does not make aviation fuel, it was in the synthetics business, and—as the Minister well knows—I ran a classic Land Rover on that fuel last summer to prove the point that this stuff works. The test that net zero must meet is that all our constituents must still be able to do everything they do today—be it fly on holiday, drive, or get a ferry or anything else that runs on a liquid hydrocarbon—and that businesses must still be able to move goods around the world and trade at the same price as today, or for an equivalent price, just greener. In that, technology is our friend, as is the innovation we see—particularly on these shores, but also innovation that is happening abroad. As my hon. Friend the Member for Orpington (Gareth Bacon), the shadow Secretary of State, said earlier in the debate, the Opposition do not seek to divide the House on Second Reading. This Bill is an extension of the previous Government’s agenda in this regard, and we fully recognise the need to replace fossil fuels over time and, in this instance, to replace aviation fuel with a cleaner, greener alternative. However, there will be key questions that the House should look at as this Bill goes through Committee and its later stages, which do need answers. We have heard some of those questions throughout this afternoon’s debate. We have had a good and wide-ranging debate, with very little deviation from the core consensus that sits underneath the Bill. On the Conservative Benches, my hon. Friend the Member for Mid Bedfordshire (Blake Stephenson) made the important point that aviation will be critical to get the tourists into the new Universal theme park in Bedfordshire when it eventually opens. He also focused on the important role that Cranfield University and industry in his constituency are playing—they are providing part of the solution to the problem that this Bill seeks to support and deliver. Equally, he asked the legitimate question of how the United Kingdom mechanism and mandate compare with those overseas, which I hope the Minister will reflect on in his winding-up speech. On the Government Benches, the chairman of the Transport Select Committee, the hon. Member for Brentford and Isleworth (Ruth Cadbury), spoke well and in an informed way on this subject. She and I both served on the Transport Committee in the previous Parliament, and we both worked on the inquiry and report on the fuels of the future that the Committee produced during that Parliament. She rightly made good points about the supply of waste for SAF technology and the trade-off with energy from waste facilities, for example. There will have to be some conversations within Government, particularly with the Ministry of Housing, Communities and Local Government, about the way in which so many councils, including my own in Buckinghamshire, now send all general waste to an energy from waste facility. Those incinerators and facilities have been financed through multi-decade deals, and if we are to get that waste into SAF production, some of those deals will inevitably have to be undone or renegotiated. Who will bear the cost of that? The hon. Lady equally raised an important point about bioethanol—I do not know whether it was just shadow Ministers who received an email from Vivergo Fuels this week, or whether it was all Members of the House. That email gave a pretty stark warning, particularly about the impact of the US trade deal that the Government have done on the bioethanol space. Essentially, it warned that that deal could completely undermine the UK bioethanol industry. That is a serious concern that the Department for Transport and the Department for Business and Trade will have to work out if we are to have domestic bioethanol production, as much for sustainable aviation fuel as for petrol. We largely all fill up—unless we have classic cars—with E10 at the pump. E5 is still 5% bioethanol. As this Bill passes through the House and as the petrol debate for road cars moves on, that serious question will have to be answered. When we get a warning from industry as stark as the one from Vivergo Fuels, it needs to be addressed. The hon. Member for North Somerset (Sadik Al-Hassan) mentioned the role of hydrogen in the mix, and I look forward to debating that with him when he has a debate on this issue in Westminster Hall next week, I think. He is absolutely right that there are other technologies and other fuels out there. The hon. Member for Derby South (Baggy Shanker) correctly pointed out that there can be no net zero without many of the elements of this Bill. The hon. Member for Doncaster Central (Sally Jameson) spoke passionately about Doncaster airport and the sustainable future that the Bill will help bring about. The hon. Member for Falkirk (Euan Stainbank) spoke in support of the Bill, and the hon. Member for Kilmarnock and Loudoun (Lillian Jones) spoke in an informed way about SAF production, which forms such an important part of the Bill. The hon. Member for Norwich North (Alice Macdonald) rightly spoke of the innovative landscape, although the drone taxis did worry me a little bit—I am not sure we have completely got goods being delivered properly by drones yet, so we should do that before we start putting people in them. Equally, she rightly spoke about the world-leading engineering jobs that will be created. The hon. Member for Alloa and Grangemouth (Brian Leishman) slightly broke the consensus, but he was entirely right to speak up for his constituents and his constituency interests so passionately. I think there is a legitimate debate about the refineries that we have lost, the refineries that we still have and how this debate intersects with them. I will not dwell too much on the puns of the hon. Member for Harlow (Chris Vince). I thought he was a teacher before he entered this House, but perhaps he also wrote for Bobby Davro, given some of the puns he came up with.
The hon. Gentleman shows my age, and no doubt his own, with that sedentary interjection. The hon. Member for Harlow was right to focus on the skills agenda that underpins this legislation, on which I do not think we have heard so much from the Government. Likewise, the hon. Member for North West Leicestershire (Amanda Hack) rightly pointed out the lived experience of Jet2 and the impact on cargo. We have heard a lot in this debate about moving people around the country and the world using aviation, but not so much about cargo, which is an equally important part of our role as a global trading nation. The hon. Member for Dunfermline and Dollar (Graeme Downie), putting aside his little geek-off with the hon. Member for Sutton and Cheam (Luke Taylor), was right to focus on that agenda of moving goods as well as people. We also heard from Teesside, with the hon. Member for Middlesbrough South and East Cleveland (Luke Myer) and the hon. Member for Stockton North (Chris McDonald). In fact, I am a little worried. This morning I was in Westminster Hall with the hon. Member for Stockton North, for a debate on the space industry, in which I agreed with every word he said, and I am a bit nervous to say that I agreed with him this afternoon, too. That does not often happen in this House, but he was absolutely right that all our constituents work hard and save hard. They want that family holiday or that weekend away or whatever it is every single year, and it would be a gross dereliction of duty for any of us to lumber them with higher airfares or to try to make their holidays more expensive. That is not what any of them send any of us here to do; they want us to ensure that they can still live their lives in the way they wish. Briefly, the hon. Member for Sutton and Cheam warned us that he might be boring but, uncharacteristically for a Liberal Democrat, he actually was not. [Laughter.] I very much enjoyed his speech and the knowledge that he brought from his 16 years of work in the aviation sector. The hon. Member for Moray West, Nairn and Strathspey (Graham Leadbitter) was equally right to focus on another matter that a few Members have raised in the debate: the use of SAF by our armed forces, particular the Royal Air Force and the Royal Navy. The use of technology, from fuels derived from waste and feedstock to pure synthetics, is where I think much of the debate will go in the coming years. In fact, the technology to enable us to move on from those feedstock and waste-derived fuels already exists. In 2021 the RAF flew a plane not on a blend of SAF, but on 100% synthetic fuel made right here in the United Kingdom by a company called Zero Petroleum, which was mentioned by my right hon. Friend the Member for Goole and Pocklington (David Davis). Let me now turn to a part of the agenda on which I think we will need to have a conversation when the Bill goes into Committee. The Bill gives no detail on the approach to be taken regarding the specifics of the contracting between the producer and the counterparty, the Government contractor for the strike price. In the background material, especially that which can be found in the Government’s response to the consultation on the SAF revenue certainty mechanism, the ambitions are largely there, and we are not critical of the ambitions that sit within that document, but it might be beneficial to be sure that the contracting will follow those ambitions. Given that the SAF mandate already in force includes a ringfenced mandate for an electro-sustainable aviation fuel quota, it is critical that eSAF projects are supported equally within the revenue certainty mechanism. It is important both to develop a UK market for SAF and eSAF, and local production as created by the Bill and the mandate, and to support and encourage the use of home-grown technology for the manufacture of SAF and eSAF, as that not only retains revenue within the United Kingdom but leverages a huge amount of revenue for future exports through technology licensing. Sadly, a great many projects supported by grants from the Advanced Fuels Fund are using foreign technology. Perhaps I could suggest that the Government reflect, ahead of the Committee stage, on the possibility of adding another ambition to those that they have already set out: namely, to reward or incentivise the use of UK technology in projects supported by the revenue support mechanism. The House may be surprised to know that, despite the various programmes of UK Government support for SAF and eSAF, AFF grants, SAF mandates and the SAF revenue certainty mechanism, no UK Government bodies are mandated to support the development of the core technologies of fuel synthesis. We have a great tradition of research and development in this country. Companies such as Zero Petroleum have been funded entirely by private capital—which is largely a good thing—and also through some of their RAF and Ministry of Defence contracts, for different reasons. Notably, however, the Aerospace Technology Institute is the Government-funded body that should be supporting SAF and eSAF manufacturing technology. It supports everything else, including hydrogen and electric aircraft, but, bizarrely, it is not permitted to fund SAF and eSAF technology programmes. That is a huge misalignment in the strategy, which I hope the Minister can address. I have a few key questions for the Minister, and he is showing great enthusiasm about answering them. We will be spending three days in Committee, so there will be many more to come.
We can negotiate more, I am sure. [Interruption.] The less we hear about the hon. Gentleman’s date at Heathrow, the better. Are the Government able to outline their level of certainty about the costs to taxpayers? Is there confidence that the levy imposed on fuel suppliers will not lead to significant rises in ticket prices? In other words, what will ensure that the £1.50 variance in either direction is not a hope, not a dream and not a best-case scenario, but a reality about air fares? It would also be helpful if details could be provided about the expected cost of importing SAF in comparison with the cost of producing it in the United Kingdom. If we are imposing costs on passengers through levies, is it expected that SAF can be produced more cheaply in other regions, or is the policy focused primarily on energy security? As I have said, our view is that we should make the fuel right here in the United Kingdom using our technology, but in order to get the right price from our technology in the UK, it is important that we understand the market overseas. Can the Minister outline what proportion of the SAF used in the UK is expected to be produced domestically in the first instance? What would constitute success in the first iterations? The Government have suggested that financing a plant costs between £600 million and £2 billion. From a regulatory perspective, what can be done to ensure that plants fall towards the lower end of that cost range? There are many questions to be answered in getting the Bill right. We want to get it right, and we want to see sustainable aviation fuel used in our aircraft. We will not divide the House today, but the test, as always, is this: have the Government got it right?
People of all ages welcome Wales’s role in making this country a clean energy superpower, but pensioners in particular had to go through last winter freezing cold, and tens of thousands went to A&E. Will the Minister, who we all know is a decent Labour Front Bencher, do what the Chancellor refused to do, and apologise to those pensioners who lost the winter fuel allowance when they needed it most?
Let me begin by setting out an unambiguous truth: aviation is vital to the British economy. It is a cornerstone of our national infrastructure, our competitiveness and our connectivity. When it comes to the impact of aviation on our economy, the figures speak for themselves. Aviation contributes £52 billion to UK GDP, supporting over 960,000 jobs across the country. That includes 341,000 people working directly in aviation—from air traffic controllers to aerospace engineers—350,000 jobs in the supply chain, and another 269,000 supported through consumer spending. Aviation also delivers nearly £8.7 billion in tax revenues, and aerospace manufacturing adds a further £9 billion directly to GDP, plus over £10 billion more when including its supply chains. Some 197 million passengers and 2 million tonnes of freight move through our airports each year. The economic case is therefore unanswerable. In short, we must all support this thriving industry with clear benefits to the country. The Conservative party has always recognised the strategic importance of aviation, but, unlike the current Government, we understand the damage that can be done with poor policy choices—I regret to say that we have seen plenty of that from the Labour Government over the past year. Alongside their national insurance jobs tax, which is putting pressure on businesses and threatens to leave working people £3,500 a year worse off, Labour’s decision to hike air passenger duty threatens the vitality of this thriving industry. The Office for Budget Responsibility confirms that rises planned by the Chancellor of the Exchequer will raise an extra £555 million in taxes over five years, pushing up the costs for businesses and passengers alike. In a speech that will have a lot of common ground with the Secretary of State’s speech, I regret to say that Labour’s handling of its professed desire to expand aviation raises more questions than answers. The decision to approve a second terminal at Luton airport, which we support, will be judicially reviewed. The proposal for a second runway at Gatwick has been kicked down the road for surprising reasons, to say the least, and the supposed support for a third runway at Heathrow is no more credible. The Chancellor has promised that the latter proposal will be operational by 2035, with spades in the ground in this Parliament, but that ambition looks very far-fetched, and there are substantial logistical and financial barriers to its construction. So far, the Government have provided no solutions on those points, so we will watch developments in the next few weeks with considerable interest. It is against that backdrop that we come to the Bill before us. When we entered opposition, we made it clear that we would not oppose the Government just for the sake of it. We made it clear that where the Government’s choices would benefit the country or the economy, we would welcome them. That is why we will not seek to divide the House on this legislation on Second Reading. This Bill is a logical follow-on from the statutory instrument passed in September last year that established the SAF mandate, the first stage of which came into effect in January. Having mandated that airlines will be required to use a specified percentage of SAF—2% this year, rising to 10% in 2030 and 22% in 2040—it is logical to take steps to ensure adequate levels of locally produced fuel. While the mandate requires the consumption of SAF, it is a new technology, and its production carries a high risk for investors. Encouraging the development of the plants required to produce this fuel is the purpose of this Bill and, to a very large degree, it is a continuation of the policy of the previous Government. In 2023, it was the last Government who committed to an industry-funded revenue certainty mechanism to support UK-based SAF production. In early 2024 we published the detail, with plans for a guaranteed strike price model to give price certainty to SAF producers. I hear the Minister say, “You didn’t do it!” He is completely correct, because unfortunately there was something called a general election that followed shortly after. As the Secretary of State has outlined, under this model, producers will be topped up when the market price falls below a guaranteed strike price; when the market price rises above, they will pay it back. The system mirrors the successful contracts for difference model in offshore wind, and the economic benefits could be considerable. A cost-benefit analysis produced by the Department for Transport before the general election suggested that the SAF industry could add more than £1.8 billion to the economy and create more than 10,000 jobs in the country, but, more fundamentally, SAF is a product of what we know to work. As the Secretary of State said in her speech, it can be blended with conventional Jet A-1, used in existing aircraft and refuelled at existing airports. The capability exists. The challenge is not scientific; it is economic. That is why the concept of a revenue certainty mechanism was one of the six pillars in the previous Government’s jet zero strategy, and, as the Secretary of State outlined, the introduction of a revenue certainty mechanism has wide support in the aviation industry. Let me be clear: while we will not oppose the legislation this evening, we will carefully scrutinise it as it progresses through the House. In that spirit, I will put some questions to the Minister, which I hope he will address in his summing up. The first is about passengers. In the press release announcing the Bill, the Government said that the revenue certainty mechanism would keep ticket price changes minimal: “Keeping fluctuations to £1.50 a year on average.” The Secretary of State said the same in her speech. Perhaps in his speech the Minister could outline what this figure is based on. Do the Government stand by it? Is it a commitment, or a rough estimate? The second question is about what type of SAF the Government favour and how it will be produced. While the SAF mandate permits the production and use of hydroprocessed esters and fatty acids SAF in the early years of the mandate, and also contains a small but increasing requirement for power-to-liquid SAF in later years, the bulk of the SAF to be developed and used under the terms of the mandate is second generation SAF, which is to be made from municipal waste, non-edible crops and woody biomass. The UK is a small island, with insufficient spare land to enjoy self-sufficient food security or to grow new forests at scale. Does the Minister think we will be self-sufficient? If not, what proportion of the ingredients necessary for making second generation SAF does the Minister think we will need to import? Relatedly, the HEFA cap comes into force incrementally from 2027, despite there currently being no domestic production of second generation SAF in the UK and low levels of second generation SAF produced globally, removing the opportunity to source mandated volumes through imports. This risks making the costs of hitting SAF mandate targets very high indeed, because suppliers will soon be forced to buy out of their mandate obligations—a significant cost that will be passed on to the airlines and, ultimately, to passengers without delivering any decarbonisation benefit at all. Will the Government consider revising the timelines for phasing out HEFA SAF to bring them more in line with the timescales for domestic second generation SAF production, in order to minimise the costs for passengers? The next area of interest is planning. The plants in which the Government are seeking to encourage investment will be large, and—as the Minister no doubt knows—large developments tend to attract a lot of local opposition, often leading to planning inquiries, judicial reviews, vast expense and years of delay before any construction work begins. If this does not change, the revenue certainty mechanism may not be sufficient to attract investors, so what will the Government do to minimise delays in the planning process? I turn now to timescales. When will the first contracts be awarded under the RCM? Will there be a timetable for reaching full mandate compliance? As my right hon. Friend the Member for Goole and Pocklington (David Davis)—who is no longer in his place—touched on, the issue of the strike price is critical to the success of the proposal. What criteria will be used to set the strike price? Will the methodology be published, and will there be regular reviews? Finally, will the Government commit to regular reporting to Parliament on industry take-up, production capacity and cost trajectory, to ensure that they remain accountable for the Bill over time? The importance of this Bill is clear. Backing UK production of sustainable aviation fuel is necessary if we are to meet our net zero goals without undermining the competitiveness of the aviation sector. However, let me be clear: as the Bill moves through the House, we will continue to look closely at the detail and press for changes where necessary, where improvements can be made to ensure that the scheme delivers on its promise.
I know the Chancellor considers herself to be a world-leading economist, so can she tell me how it is that everyone in the country knew that hiking taxes on employers’ national insurance contributions—making it more expensive to employ people—would destroy jobs, destroy businesses and destroy the economy, and the only people who did not know that were her and her socialist boss?
It is a pleasure to serve under your chairmanship, Dr Huq, and a privilege to contribute to this important debate. I congratulate the hon. Member for Torbay (Steve Darling) on securing the debate at such a timely point, following today’s spending review. The focus on NHS funding, particularly in underserved regions such as the south-west, is welcome, so that every area of the UK is properly equipped to meet the healthcare needs of all communities. I, too, represent a predominantly rural constituency, so I am keenly aware of the unique challenges in healthcare provision facing remote areas. Geography should not be a barrier to treatment, but for many in the south-west and beyond, it still is. We heard in the spending review today that the NHS will receive a substantial cash uplift. We must ensure this money is spent in the most effective way possible. We do not have the allocations yet, but can the Minister enlighten us on whether there will be an amount allocated particularly for rural healthcare. The spending review document talks about efficiencies of £9 billion to be achieved by the Department of Health and Social Care. Can the Minister elaborate on how those efficiencies will be achieved? Much has been said already about the financial pressures facing integrated care boards. The Government’s proposal to restructure NHS clusters in the south-west into larger conglomerates is presented as a move towards greater efficiency, but care must be taken that this does not come at the expense of local responsiveness or patient outcomes. NHS England is legally required to assess the performance of each ICB annually and publish its findings. However, the Government have decided at the same time to abolish NHS England—a decision they took without a proper impact assessment.
I would need to look at that separately and come back to the hon. Member on it, although he should perhaps direct his question to the Minister, as she has control at the Department at the moment. The problem with cutting both the ICBs and NHS England is that it risks destabilising the very structures that are designed to deliver care simultaneously. The chief executive of NHS England has stated that legislation will be required to change the duties on ICBs. When do the Government intend to introduce the health Bill and, when they do so, can the Minister rule out the removal of the duty in the Health and Care Act 2022 requiring integrated care systems to commission dental services? In paragraph 5.12 of the spending review, the Government say that 92% of patients will start consultant-led treatment for non-urgent health conditions within 18 weeks, but The Times has reported that the figure is closer to 80%. Can the Minister please clarify where the 92% figure has come from, and if she is unable to do so today, will she write to me? Much of this debate has been about infrastructure. Since the last general election, Ministers have pledged to deliver the new hospitals programme in full, without caveats or conditions. However, in Torbay, for example, the rebuilding has been pushed back, with construction now expected to begin between 2033 and 2035. Thanks to the efforts of my hon. Friend the Member for South West Devon (Rebecca Smith), Ministers have given the greenlight to rebuilding Derriford hospital’s new accident and emergency facility. Can the Minister confirm if there are plans to bring any of the other projects forward? Let me turn to national insurance contributions. The Royal College of General Practitioners has described the national insurance increase as, “the straw that breaks the camel’s back, forcing them to make tough decisions on redundancies or even closing their practice”. The Government’s promise to recruit more GPs is welcome, but hiking national insurance puts that pledge in jeopardy, as GPs will have no choice but to cut staff numbers. This is a false economy, so will the Minister use any of the money allocated today to help those services, such as GPs, air ambulances, hospices, pharmacies and others, that are affected by the national insurance contribution rise? It will not have escaped Members’ notice that, despite the Chancellor promising that the NHS plan would arrive by spring, we are now at the start of summer—indeed, the Government promised that they had one before the election last year. Will the Minister provide some clarity on when we can expect this long-awaited plan?
What is most interesting about the spending review is what is not mentioned: there is no mention of the River Thames scheme, no mention of our rivers, no mention of the Animal and Plant Health Agency in New Haw, and no mention of improvements to rail, despite the nationalisation of South Western Railway. In fact, there is almost no mention at all of the south-east, despite the Chancellor saying that this a spending review for the whole UK. However, she has effectively confirmed the third runway at Heathrow, despite there being no local engagement. May I invite the Chancellor to come to Runnymede and Weybridge to meet people and see if their priorities are indeed hers, as she claims?
I declare an interest as a pilot. In this context, I spoke to one of the would-be producers—I think it is called Zero—and its primary concern with respect to the strike price mechanism that the right hon. Lady talks about is how that will be set and what input producers will have. Will she address that when she talks through the mechanism?
It is a pleasure to serve under your chairship, Dr Huq. I offer my thanks and appreciation to the hon. Member for Sheffield Hallam (Olivia Blake) for her speech, and for securing the debate. She expressed very well the complexity of migration and the welfare system, which I will come to. It is important that we get our migration routes right, recognising the great difficulty of safe and legal routes in our system, and how much we could do better on that front. I recognise that, in previous years, we facilitated large-scale asylum and humanitarian visa routes through the Syria, Hong Kong and Ukraine schemes. Leaving aside the question of safe and legal routes for refugees, we have seen large-scale migration flows and visa awards in recent years. That has put significant pressure on different aspects of our society, from wages and housing to public services and welfare. The hon. Lady gave a compelling account of the challenges of hardship faced by migrant families. Other hon. Members also spoke eloquently of the impact of poverty, particularly on children, as illustrated by the hon. Member for Strangford (Jim Shannon). My concern with the general proposal made by the hon. Member for Sheffield Hallam and others is that it does not refer to the likely dynamic effects of effectively abolishing no recourse to public funds status. It would induce a pull factor if we were to signal or enact instant or speedier eligibility for public funds to people claiming asylum or on a visa. We would inevitably and significantly increase the demand for places in the UK, and we need to acknowledge that. The hon. Member for Sheffield Hallam mentioned the sanctuary city of Sheffield, and the hon. Member for Liverpool Riverside (Kim Johnson) did the same. I represent part of Swindon, which is also a sanctuary borough, thanks to the Labour council. I met social care providers this morning who talked about the immense pressure that the increase in migrant families is placing on public services in Swindon, including on social care and children’s services. Inviting many more people to come and live with us is not without consequence.
I am sorry if I missed the hon. Ladies’ references to the pull factor, but I simply do not believe that the offer, or the lack of offer, of support has no effect on the demand for places in the UK. I think people will factor in those considerations when deciding whether to apply for a visa here. If we are offering additional public finances, that would make a more attractive offer. I recognise the hon. Lady’s point about the labour market and the availability of people working in social care, although that is perhaps a topic for another day. The point was also made by the care providers in Swindon I spoke to this morning. They also said that this country could do so much better in supporting and training care workers who were brought up here. Leaving aside the potential dynamic effect of ending the no recourse arrangements, I do not think the hon. Member for Sheffield Hallam sufficiently acknowledges the pressures on the system that are a consequence of high rates of migration. Studies suggest that around 1 million people are likely to get indefinite leave to remain—estimates vary between 750,000 and 1.25 million— which is 1 million people coming down the pipeline, as it were, and likely to have recourse to public funds. Because of how the immigration system has worked in recent years, we are talking about people who are overwhelmingly on low wages and who come with dependants, notwithstanding the genuine contribution that many of them will make. Overall, on a pure analysis of the numbers, they and their families will represent a fiscal loss to the country over the time they are in the UK. Even based on the very optimistic assumptions about lifetime earnings that the OBR uses, the 1 million or so people who are expected to get indefinite leave to remain in the coming years will have a net fiscal lifetime cost to the country of £234 billion. That is what we are looking at with the current system.
I am grateful for that intervention, and I recognise the complexity of the subject we are discussing. The hon. Lady has cited evidence that contradicts mine. I need to look into the study she mentions, because my strong understanding is that, on the basis of the overall immigration we have welcomed in recent years—and, frankly, it is my party that is responsible for it—the net fiscal effect is negative. Of course, there are many migrants who contribute economically, and there are many migrants who contribute even if they are not contributing economically; not everything is counted in pounds and pence. But if we are talking about the fiscal effects, I am confident in saying that, based on the number of people expected to achieve indefinite leave to remain, who the hon. Lady presumably wants to have recourse to public funds earlier, we are looking at a significant increase in the financial burden. I want to acknowledge the point that the hon. Lady and other Members have made: the current system shunts costs around the system. The consequence of people living in poverty might be that the Department for Work and Pensions does not bear the cost, but other parts of the public system do—local authorities most of all. That is not an argument to say, “In that case, let the DWP provide the money,” because overall, we would be spending a lot more, and as I said, inviting more people to come if we did that. However, I acknowledge that it is not as if these costs are not borne at all; some of them are borne elsewhere. I want to end by making a very obvious point. Our welfare system remains one based on contribution in principle and, to a certain degree, in practice, in so far as the national insurance system still exists. In the public mind, there is rightly an expectation that, for the sake of fairness and trust in the system, we should maintain an arrangement whereby welfare is funded by and is for the benefit of citizens of this country. There are, of course, many exceptions to that—other people make contributions, and other people are eligible for support—but that is the basis on which our system depends. My strong view is that the proposal by the hon. Member for Sheffield Hallam, echoed by the hon. Member for Aberdeen North (Kirsty Blackman)—and I think the Liberal Democrat spokesperson, the hon. Member for Frome and East Somerset (Anna Sabine), made a similar point—effectively to scrap the no recourse to public funds arrangement would terminally undermine, weaken and eventually destroy the basis of our welfare system, which is that people pay in and receive. To conclude, I look forward to the child poverty strategy. If we are serious about reducing child poverty, including for those children living in migrant families who are here now, we need to reduce the flow of low-wage families into the system in the first place, whether from abroad or through our own failure to support families in this country. That means extending the qualification period for ILR, which my party has suggested, and it is good that the Government are now considering following suit. We should obviously be helping families with their finances through meaningful and effective reform of the welfare system. We should be supporting the community infrastructure that gives support to families and young people, and we should be creating well-paid jobs through an economic policy that stimulates growth—not taxing jobs out of existence, as the Government are sadly doing. Those are the best ways to support children in poverty.
My constituents in Tenbury Wells are seeking funding for a flood defence scheme. They will have listened very closely to the Chancellor’s remarks today to hear her mention flood defence capital spending, yet it was not mentioned in her speech. Can she confirm that the capital that will be allocated in the spending review period to flood defences will be as high in real terms as it was in the previous Parliament?
The UK has a real opportunity to lead the world in the production of sustainable aviation fuels, and this Bill aims to provide the investment certainty needed to scale up domestic SAF production and achieve just that. My constituency is located a stone’s throw from London Luton airport. It is a rapidly expanding regional airport, and that expansion will bring with it huge economic benefits, including jobs for thousands of my constituents and better connections for business and leisure. Indeed, airport expansion will help to bring millions of people to the Universal UK theme park—which I have to mention every time I stand up—and play a key role in driving local economic growth. But just as it is important to support the growth of airports such as Luton, it is important that expansion happens as sustainably as possible to ensure that we get as many of the benefits, and as few of the harms, as possible. This is the subject of a current Environmental Audit Committee inquiry, which I was pleased to secure, investigating how the Government can deliver airport expansion while meeting their legally binding climate targets. Some, such as the Climate Change Committee, say that it is not possible, and the Government need to square that circle. With around 7% of greenhouse gases derived from aviation in the UK, we should not underestimate the challenge, but it is clear to me that sustainable aviation fuels are an important piece of the jigsaw. In my constituency of Mid Bedfordshire, Cranfield University and local industry are already working at the cutting edge of developing new technologies in this area. I have heard from them and other experts about the potential of British-made sustainable aviation fuels. I have even learned about second-generation SAF—not something that I thought I would get into this time last year—which turns the waste we all put in our black bins every week into the fuel that powers us to adventures abroad. That is a remarkable thing, and I am glad to have learned about it since coming into the House. If we get sustainable aviation fuels right, we can create and support thousands of highly skilled jobs in places such as Cranfield. Doing more to stimulate the development of sustainable aviation fuels is an obvious route to economic growth, so will the Minister reflect on our global market position, explain how the mechanism compares with other approaches, and give an assurance that the measures in the Bill will be enough to avoid the UK aviation industry needing to import SAF from abroad? It would be a huge missed opportunity to later find that this mechanism and related policies have not been ambitious enough, leaving foreign countries to benefit from domestic mandates. One thing that strikes me immediately as worthy of more thought—the Minister may wish to comment—is black bin waste. Taking waste that was heading to landfill and instead using it to power us into the sky would seem to be a simple way forward, although whether there is enough of it is another matter. I declare my interest as a Central Bedfordshire councillor, but will the Minister consider the merits of including, in this Bill or elsewhere, a requirement for the Secretary of State to provide local authorities with guidance on how they can take advantage of this opportunity to help in the national effort to scale up production? Unless it is financially prohibitive for them to do so, would it not be sensible and pragmatic to let them use our household waste in this way, rather than let it head to landfill or local incinerators? Finally, I have a few questions for the Minister on the costs of aviation travel. As we all know, times are tight for many of our constituents. UK air passenger duty is the world’s highest tax levied on airline passengers, and following the autumn Budget, the OBR forecasts that it will increase 9% a year on average to a whopping £6.5 billion in 2029-30. On top of that, it is estimated that the impact of the Bill through the levy and administration costs will raise the cost of a ticket to travel. I know Ministers say that it is a modest increase, but that is why some may prefer the Government to use an alternative funding mechanism, such as the industry’s contribution to the UK emissions trading scheme. I am not saying that the Government should take that approach, but it would be worthwhile for them to explain why they have taken the approach they have. Reflecting on the fact that the costs of the Bill come on top of the increase to air passenger duty in the autumn Budget, will the Minister provide an assurance that the Bill will not clobber our hard-working constituents with yet higher prices when they jet off on their family holiday?
It is a pleasure to serve under your chairmanship, Mrs Hobhouse. I congratulate the hon. Member for Melksham and Devizes (Brian Mathew) on securing the debate. It is very timely, coming as it does one day before the Chancellor’s spending review announcement. It is more than three months since the Prime Minister announced the reduction in aid spending, yet we still await a clear picture of what that means, as my right hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) eloquently set out. I appreciate that there are challenges for the Minister but, like the international development sector and partners, I still have many unanswered questions about what this means for UK development priorities, especially in the context of changes to USAID. Decisions about the levels of US aid are, quite rightly, a matter for the US Government, but we should acknowledge that this is the new reality we are working with. It is therefore incumbent on Ministers to be across the changes and the detail, and to understand what they mean for the sector and our partners. What assessment has the Department made of the impact of the changes to USAID? Understanding where the impact will be is crucial to ensuring that our programmes are as effective as they can be, given the global and domestic context. With that in mind, has the Minister assessed the number of UK aid programmes that are likely to be impacted and which sectors will be most affected? I would also be grateful for an update on her latest discussions with her counterparts in the US, as well as counterparts in other donor countries. Is she aware of any programmes or policy areas that the US is vacating where there might be appropriate opportunities for the UK to take on the mantle and further our own national interest? Global health, as we have heard today, is an area where the UK has made a significant and positive contribution, for example to Gavi and the Global Fund. In 2020, while we hosted the global vaccine summit, it was the Conservative Government who committed £1.65 billion to Gavi. During the last two Global Fund replenishments, we pledged £1 billion in 2022 and £1.46 billion in 2020. These interventions really do matter: Gavi has saved 18.8 million lives and the Global Fund 65 million. Those are not numbers, but real lives, real people and real results. Sadly, we are yet to see a pledge from this Government. Another example of global health in action is the Tackling Deadly Diseases in Africa programme. By working with African partners and the World Health Organisation to help to detect and tackle future epidemics and drug-resistant infections, the programme was integral to stopping Africa’s worst Ebola outbreak in 20 years. It is therefore rather concerning that we read in the press that the programme is at risk. Diseases do not respect borders, and we need to understand the risk of the changes for us at home. What assessment has the Minister made, ahead of the spending review, to inform her about how the global health budget should be managed? On women and girls, the UK also has a good story to tell. In government, the Conservatives launched the women and girls strategy for 2023-30, which affirmed our commitment to the three Es: education, empowering women and girls, and ending violence. We worked with partners such as Education Cannot Wait and the Global Partnership for Education, demonstrating how the public and private sectors can work together to achieve maximum impact. Similarly, sexual and reproductive health and rights programmes are, as we have heard today, essential for saving lives and achieving gender equality, and, crucially, for empowering women. This is an area where the UK has a strong record of delivering. As we are sadly all too aware, conflict has a disproportionate impact on women and girls. Too often, they are locked out of efforts to prevent and resolve conflicts, and to build peace. The women, peace and security agenda we championed in government is about building a more representative and effective approach to tackling conflict and advocating for women’s rights in an ever more challenging world. It matters because empowered and engaged women make societies more prosperous and more secure. The Minister’s colleague, the International Development Minister, recently told the International Development Committee that education and gender are likely to be impacted by the changes to ODA. As a priority, can the Minister therefore help us understand how that will impact on the FCDO’s work in women and girls’ education, SRHR, maternal health and the broader women, peace and security agenda? There are so many other areas I would like to raise in the context of changes to USAID. As ever, I am conscious of time, but it is important that we do not lose sight of, for example, strong institutions and capacity building, and tackling corruption and illicit finance. Without that, we cannot help partner countries to become stronger and better allies—something that is increasingly important in today’s ever more challenging world. De-mining in post-conflict and active conflict zones remains crucial. In that area, funding to the Mines Advisory Group and the HALO Trust—great examples of British NGOs—has helped not to just support the clearance of explosives, but to raise awareness of the danger of mines and, crucially, train and build capacity in countries so that they can help to clear the mines themselves. I would also like to touch on nutrition, which underpins good development. The recent Nutrition for Growth summit in March this year is yet another example of a sector left in limbo where the UK did not make a financial commitment. It has been clear throughout this debate that there are still many unanswered questions and much uncertainty in the sector. I know that I am not alone in having received answers to written questions telling me to wait for the spending review. My latest tally of such answers is 59, and the story is the same almost regardless of the policy area. Similarly, the Shafik review of international development appears to have been left gathering dust on the Foreign Secretary’s desk. There are so many unanswered questions, creating much uncertainty in an ever-changing and complex world of conflict. I have a specific and topical question to press the Minister on regarding ODA spending on Chagos. What funds from ODA will be used as part of the payments and support for Mauritius under Labour’s Chagos surrender deal? Finally, how have the changes to USAID impacted the Minister’s decisions on UK development priorities? Has her Department made a full sector-by-sector, country-by-country impact assessment ahead of tomorrow’s spending review that takes into account the new development landscape we are operating in? As we adjust to the new reality with respect to USAID, it is vital that the UK is alive to the impact on our international development programmes while ensuring effectiveness in our delivery. Like many hon. and right hon. Members, I am sure, I remain patient and will wait until the spending review tomorrow, but let me reassure the Minister and her Department that if I am left with more questions than answers after that, I will keep asking those questions.
In my comments, I was appreciative of the challenges that any Government faces in such circumstances. However, I gently remind the Minister that this is now happening on her Government’s watch and, as she rightly acknowledges, my job as the shadow development Minister is to keep asking those questions. What the sector needs is certainty, and the Government clearly have not learned that.