House of Commons

Wednesday 5th September 2012 Commons Chamber

Wednesday 5 September 2012

The House met at half-past Eleven o’clock

Prayers

Wednesday 5th September 2012 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 5th September 2012 Commons Chamber

The Minister for the Cabinet Office was asked—

[Yvonne Fovargue (Makerfield) (Lab)]

1. What recent discussions he has had with the Deputy Prime Minister on the lobbying White Paper.

[The Minister of State, Cabinet Office (Mr Oliver Letwin)]

The Deputy Prime Minister has recused himself from any involvement with the question of lobbying due to a possible conflict of interest with his wife’s activities, and therefore I have not had any discussions with him whatsoever about this subject.

[Yvonne Fovargue]

Will the Minister explain why the Government have failed to bring forward any proposals for a statutory register of lobbyists? It seems that the public want one, the lobbying industry wants one and the Government promised one.

[Mr Letwin]

Yes, I will explain why we are where we are. The hon. Lady would, I am sure, share my view that it is important when issuing a consultation to pay some attention to the responses received. When we issued the consultation with a set of proposals for a statutory register, an enormous number of responses were received. We are going through them, considering them extremely carefully. The Select Committee on Public Administration also reported on the matter—it was a weighty and serious report—and had a great number of things to say. We are also considering those, and when we have finished that consideration, we will come forward with new proposals.

[Mr James Gray (North Wiltshire) (Con)]

Does my right hon. Friend agree that there is a real risk in that although a request for a register of paid lobbyists is perfectly reasonable, we must not throw the baby out with the bathwater when all sorts of charities, voluntary organisations, trade unions and others who “lobby” perfectly legitimately are not paid lobbyists and should not be included?

[Mr Letwin]

My hon. Friend makes an important observation. One issue that came up in the course of the consultation, which many consultees and indeed the Select Committee commented on, is the question of scope. The Government’s initial proposals did not include any reference to lobbyists that were “in house”—the ones to which my hon. Friend refers—whether they be charities, businesses, social enterprises or whatever. Some respondents suggested that the scope should be wider. This is clearly something that needs to be considered, and my hon. Friend’s point is well taken.

[Jon Trickett (Hemsworth) (Lab)]

Yesterday’s reshuffle saw the entry into the Cabinet of every single Tory MP who had sat on the advisory board of the disgraced Atlantic Bridge lobbying organisation. Examples like this leave the Government open to the accusation that they are dragging their feet on regulating the industry because of inappropriately close relationships with lobbyists. This is damaging to the House and to democracy itself. Following the departure from his Department of the Minister responsible for regulating lobbying, will the Minister immediately bring forward legislation to regulate this matter once and for all?

[Mr Letwin]

I certainly do not want to get into any partisan repartee across the Dispatch Box on a matter that ought to command considerable cross-party agreement and support. I am grateful to the hon. Gentleman for the remarks he has made on the record in the past about supporting the principle of regulating lobbying. I should, however, point out that his party was in government for a very long period during the whole of which issues were raised about this subject and at no time did that Government issue a paper or consult on it, or move towards serious regulation of it. If he feels that this should have been done immediately, the question arises of why it was not done from 1997 onwards. To help him, the answer is, of course, that it is an extremely complicated and difficult subject, which is why the Select Committee and respondents to the consultation had many things to say. I hope that the hon. Gentleman will, on mature reflection, agree that we should consider this in an unpartisan spirit and try to get it right.

[John Howell (Henley) (Con)]

2. How much money was saved as a result of his Department’s cross-Whitehall spending controls in 2012.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

To deal with the enormous budget deficit that the coalition Government inherited from the Labour party opposite, in the days after the general election in May 2010 we introduced tough new spending controls. In the year to March 2012, those controls helped to save the taxpayer no less than £5.5 billion, on top of the £3.75 billion that we saved the year before.

[John Howell]

I congratulate my right hon. Friend on those figures and ask him whether he agrees that this shows just how wasteful spending was under the previous Government.

[Mr Maude]

I am afraid that that is the case. It was open to the Leader of the Opposition, when he sat in my position in the Cabinet Office, to introduce the same kind of controls, but it is very unglamorous hard work; one needs to get into the detail. It is a pity that he did not do it; if he had done, we would not be in quite the fiscal mess that the coalition Government inherited two years ago.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

The Minister has previously made great play of the contracts finder website as an indication of cross-Whitehall spending. Before the summer recess, I tabled a series of questions to all Government Departments about the level of spending on contracts with Atos and Atos Healthcare. It turns out that despite the claim that all the information is on the website, a significant number of contracts with Atos across Whitehall are not on it. Will the Minister review the website to ensure that it is absolutely accurate?

[Mr Maude]

I must start by saying that we inherited a complete lack of transparency about Government contracts. It was impossible for potential suppliers to the Government to find out what contracts were available. We are gradually reaching a stage at which more and more contracts will be made available transparently, but provisions relating to confidentiality are built into many of the contracts with suppliers that we inherited. We will seek to avoid that in future, but I think the hon. Gentleman will find that many of the Atos contracts stem from the time when his own party was in government.

[Mr Marcus Jones (Nuneaton) (Con)]

14. I welcome the savings that my right hon. Friend has already found, but what more can he do to reduce the burden of excess in Whitehall which has existed over the last few years and which was fostered by the Labour party?

[Mr Maude]

The longer we stick at this task, the more possibilities of saving yet more money we will find. It is important to protect spending on the front-line services on which the public depend, and we will continue to do that. I am delighted to welcome my hon. Friend the Member for Norwich North (Miss Smith) to her post: she will give huge support to me in my role of seeking out wasteful spending and driving efficiency through central Government.

[Neil Parish (Tiverton and Honiton) (Con)]

3. What his policy is on the provision of trade union facility time across the civil service.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

Unions can play a positive role in the modern workplace. [Interruption.] On the subject of paying, it is nice to know who is paying that lot on the Labour Benches.

However, the Government believe that taxpayer-funded facility time arrangements in the civil service should reflect good practice across the private and public sectors. That is why I launched a consultation to review facility time, and will ensure that future arrangements are subject to rigorous controls and monitoring.

[Neil Parish]

Can my right hon. Friend tell me what arrangements for the monitoring of union facilities and activities were in place when he entered Government in 2010, and how much they were costing?

[Mr Maude]

The arrangements for the monitoring of facility time were very mixed indeed, and in most cases almost non-existent. It has taken a long time—many months—to tease out of Whitehall the data on how much is being spent and how much facility time there is. We estimate that the cost to the taxpayer of facility time for trade unions in the civil service alone is between £33 million and £36 million a year. That is too much, which is why we are consulting on how it can be significantly reduced and controlled.

[Mr Gerry Sutcliffe (Bradford South) (Lab)]

When measuring the costs, the Minister should take account of not just the cost of the time to the taxpayer, but the benefit of the work done by trade unions throughout the civil service. How will he estimate the cost of what he is doing in terms of benefit?

[Mr Maude]

I am confident that our consultation will tease out the benefits. I absolutely accept that the trade union duty to support union members in employment disputes can have a benefit, and for that reason we are not suggesting that all facility time should be removed; indeed, it would not be lawful for us to do so. However, the amount is excessive. It has been allowed to creep up over time, and it now needs to be reduced and controlled for the future.

[Mr Mark Spencer (Sherwood) (Con)]

4. What recent progress his Department has made on its programme to abolish and reform non-departmental public bodies.

[Andrew Selous (South West Bedfordshire) (Con)]

7. How many non-departmental public bodies his Department has abolished to date.

[The Parliamentary Secretary, Cabinet Office (Miss Chloe Smith)]

This Government have undertaken the biggest programme of quango reforms in a generation to increase accountability, cut duplication and reduce costs. We have already reduced the number of public bodies by about 200, and by 2015 the overall number will be down by a third.

[Mr Spencer]

I welcome my hon. Friend to her new position and wish her well. What help and support have the Opposition given on the quango reform programme?

[Miss Smith]

That is a very appropriate question, because Government spending on quangos doubled under Labour, and by 2015 this Government will save the taxpayer a total of more than £2.6 billion, which is more than £150 per working household. It tells us all we need to know about Labour that it voted against those measures.

[Andrew Selous]

Does my hon. Friend agree that the growth of the quango state under the last Government significantly reduced accountability to the taxpayer, and that many of these organisations had overpaid chief executives and overly smart offices, greatly increasing the cost to the public purse?

[Miss Smith]

I agree. The range of responsibilities handed to those bodies and the amount of taxpayers’ money they received was at an all-time high under the previous Government, and they were clearly irresponsible for doing that. This Government are restoring accountability for public services.

[Lindsay Roy (Glenrothes) (Lab)]

11. On this Government’s quest to have a bonfire of the quangos, will the Minister confirm that the Health and Social Care Act 2012 will create more quangos than the Public Bodies Act 2011 abolished?

[Miss Smith]

The Department of Health is reducing the number of quangos, not increasing them.

[Mr Gregory Campbell (East Londonderry) (DUP)]

On behalf of my party, may I congratulate the hon. Lady on being appointed to her new position?

Every Government and every Parliament have promised to do what her Government have promised to do on non-departmental public bodies. Will she abide by the judgment of the people in two years’ time, close to the end of this Parliament, in respect of how many of these NDPBs have fallen by the wayside?

[Miss Smith]

The hon. Gentleman raises a vital point. More than half the quangos in government will be reformed. There will be no return to the old ways of working. He is right, too, that we need to be accountable in this process, which is why we are instituting triennial reviews and other measures in order to ensure we keep on this path.

[Andrew Stephenson (Pendle) (Con)]

5. What recent assessment he has made of the second round of National Citizen Service pilots.

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

In its first year, the National Citizen Service achieved customer satisfaction ratings of 95% and a benefit-to-cost ratio of 2:1, with approximately three times more young people going through the programme this year. We expect to build on that, and we will be publishing an independent evaluation next year.

[Andrew Stephenson]

I thank the Minister for that answer. Last week I took part in a “Dragon’s Den”-type session for young people to pitch social action projects, which was organised by the Challenge Network and took place at the ACE centre in Nelson in my constituency. Does my hon. Friend share my admiration for organisations such as the Challenge Network, who get young people involved in projects that can make a real difference in their communities?

[Mr Hurd]

Yes, I do. I congratulate the Challenge Network and others who are helping to deliver what is an outstanding programme. I continue to be amazed that so much can be done in just three weeks in building young people’s confidence and skills, and in giving them a chance to make a positive difference in their communities.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

Does the Minister share my concern at the report by the Education Committee which found that, based on the cost per head of the 2011 pilot, it will cost a total of £355 million each year to provide a universal offer for the NCS, and that, even allowing for economies of scale, that cost may well outstrip the entire annual spending by local authorities on youth services, which totalled £350 million in 2009-10?

[Mr Hurd]

I simply encourage the hon. Lady to visit an NCS project. I think she will see that the projects are outstandingly popular with the young people who are taking part, and that although people in the youth sector are understandably frustrated at cuts elsewhere, they are beginning to recognise that the NCS is an enormously positive asset in terms of developing the young people of this country.

[Mrs Mary Glindon (North Tyneside) (Lab)]

6. What estimate he has made of the total reduction in funding to the voluntary sector in 2011-12.

[Helen Goodman (Bishop Auckland) (Lab)]

9. What estimate he has made of the total reduction in funding to the voluntary sector in 2011-12.

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

Data from the Charity Commission suggest that the gross income of registered charities grew in 2011, but we all know that the sector is going through a very difficult period. We are putting in place plans to help it through this very difficult transition period, and to open up new funding opportunities over the medium term.

[Mrs Glindon]

In the north-east, funding reductions are forcing 48% of voluntary sector organisations to close services and 28% to reduce the number of beneficiaries they support. What impact does the Minister think such losses will have on the Government’s plans to increase the role of the voluntary sector in delivering public services?

[Mr Hurd]

I share the hon. Lady’s concern and that is why we have pressed the point, from the Prime Minister down, to local authorities that they should try to avoid making disproportionate cuts to the voluntary sector and why we have put in place funds to help manage the transition. I have to say to her that for the Labour party to keep talking about cuts to the voluntary sector without recognising why those cuts were necessary in the first place, and without recognising that Labour councils are doing some of the heaviest cutting while saying absolutely nothing about the future of the sector, is fooling no one and disappointing many.

[Helen Goodman]

In County Durham, the local authority has had to reduce its grass-cutting service because of the reductions in its grant, so I rang the local Community Service Volunteers, thinking that that might be something it could take on. It said that it could not, because it did not know whether it will have core funding after the new year. Does the Minister not understand that far from creating a big society, he is destroying the society we have?

[Mr Hurd]

We are investing in the infrastructure that supports the voluntary sector, with some £30 million already invested through the transforming local infrastructure fund. Yet again, I draw the hon. Lady’s attention to the fact that that cut to that grant has not come from the centre but from the local authority, which is accountable for that decision.

[Rehman Chishti (Gillingham and Rainham) (Con)]

Will the Minister join me in thanking the 70,000 volunteers who took part in the London Olympics? What steps will be taken to ensure that we build on that volunteering legacy?

[Mr Hurd]

Anyone lucky enough to have gone to the Olympic games or the Paralympics will know just what an important role the volunteers played in making them an enormous success. My hon. Friend is right that we clearly have a big opportunity to build on that, which is why we have committed another £40 million for the social action fund to back exciting new campaigns to inspire volunteers, such as “Join In”, which inspired a quarter of a million people to get involved with their local sports clubs in August.

[Bob Blackman (Harrow East) (Con)]

I congratulate my hon. Friend on bringing forward new proposals to support the voluntary sector, but will he join me in condemning Labour-run councils that are cutting the voluntary sector, decimating services and then blaming the Government?

[Mr Hurd]

My hon. Friend and neighbour from Harrow makes a good point. Locally, we have the contrast between Conservative-run Hillingdon council, which is increasing its investment in the front-line voluntary sector, and Labour-controlled Harrow next door, where that investment is being reduced.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

Ministers’ huge cuts in funding for charities mean that volunteer centres across England are losing, on average, 25% of their income, according to Volunteering England. With so many Olympic and Paralympic volunteers wanting to continue to volunteer after the games are finished, why are Ministers so determined to make it so hard for them to do so?

[Mr Hurd]

We are not. The hon. Gentleman has never let facts get in the way of shameless opposition and he has not disappointed today. We are investing in the infrastructure to support and inspire volunteers, with £30 million for the transforming local infrastructure fund. We are doing our bit from the centre, but the point I would make to local authorities across the country is that they should recognise the value of the volunteers in their community and not cut the investment in the local infrastructure that supports them.

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

8. What plans he has for the (a) ministerial and (b) civil service code of conduct.

[The Minister of State, Cabinet Office (Mr Oliver Letwin)]

The ministerial code and civil service code set out the standards of conduct expected of Ministers and civil servants. They are published for the House and were last published in May 2010.

[Mr McCann]

I am grateful to the Minister for that response, but does he concede that a review of both codes is necessary to ensure that Ministers cannot hide behind civil servants when failures occur and, most importantly, that senior civil servants do not avoid scrutiny by using political independence as a camouflage for frustrating Government policy?

[Mr Letwin]

The hon. Gentleman asks an important question. Clause 1 of the ministerial code makes it abundantly clear that no Minister can hide behind anything as

“Ministers have a duty to Parliament to account, and to be held to account, for the policies, decisions and actions of their departments and agencies”.

My right hon. Friend the Minister for the Cabinet Office and Paymaster General has recently issued the first steps in the civil service reform programme, which seek to enlarge the area of accountability for senior civil servants to include direct accountability both for the quality of their policy advice and for its implementation.

[Fiona Bruce (Congleton) (Con)]

Does the Minister agree that it is for the Prime Minister to decide whether to initiate an investigation of an alleged breach of the ministerial code and that it is for Parliament to hold him to account?

[Mr Letwin]

Yes, I entirely agree with my hon. Friend. Indeed, that system has served us well and is, I believe, accepted by the independent adviser on ministers interests.

[Jenny Chapman (Darlington) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

My responsibilities as Minister for the Cabinet Office are for the public sector efficiency and reform group, civil service issues, industrial relations strategy in the public sector, Government transparency, civil contingencies, cyber-security and civil society. [Interruption.]

[Mr Speaker]

Order. There is far too much noise in the Chamber, which is very discourteous to the Minister and to the Member. I want to hear Jenny Chapman.

[Jenny Chapman]

In Darlington, post offices are seen as vital community hubs. Will the Minister update the House on his discussions with the Department for Business, Innovation and Skills on how better to exploit the community value they offer?

[Mr Maude]

I have had a number of discussions about that with the BIS Minister who has responsibility for post offices, and we are doing what we can to encourage the post office network to be, as much as it can, a front office for a number of Government services. We think that is a valuable function.

[Priti Patel (Witham) (Con)]

T4. The Minister will be aware that Unison has instructed its members to secure as much paid or facility time as possible for union activity, including campaigning. Will he confirm that not a penny of taxpayers’ money will go to subsidise such trade union activity?

[Mr Maude]

There is a distinction between trade union duties, which are to do with genuine representation of employee rights, and trade union activities, which are not. There is no legal obligation to provide paid time off for trade union activities, which is why we are consulting on the reduction or elimination of that.

[Michael Dugher (Barnsley East) (Lab)]

Further to the answer given to my hon. Friend the Member for Darlington (Jenny Chapman), in recent weeks the Minister will have received a number of letters regarding the future of the post office network and the importance of Government services and their expansion. Will he endorse the campaign by the National Federation of SubPostmasters and, as the campaign slogan says, help make it happen?

[Mr Maude]

I have had discussions with the federation of postmasters and we are very alert indeed to the desirability of more business being available, but the federation understands that there is a need for Post Office Ltd to improve its activities and productivity. I know that that is under way.

[James Morris (Halesowen and Rowley Regis) (Con)]

T5. Over the summer, I had the pleasure of hosting a visit by a group of young people as part of the National Citizen Service, organised by the Challenge Network in the black country, which was a fantastic success. Will the Minister outline his plans for the further roll-out of the NCS next year?

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

We are ambitious to expand the NCS because it is such an outstandingly positive opportunity for young people. The aim is to make it available to 90,000 teenagers in 2014.

[Toby Perkins (Chesterfield) (Lab)]

T2. Reshuffles are always a busy time. Does the Cabinet Office have any specific plans to ensure that Cabinet Office staff do not have communication difficulties with the overwhelmingly male, rich and white Cabinet who have just been appointed?

[Mr Maude]

Cabinet Office staff have no difficulties of any kind whatever.

[Stephen Mosley (City of Chester) (Con)]

T6. Last week, I was privileged to see the hard work of the NCS volunteers at the New Scene centre in Chester. However, a number of the young people were from over the border in Wales. While they were delighted to be able to do their NCS activities in England, they were disappointed that they were not able to do them in their own communities. Will the Minister join me in calling for the Welsh Assembly Government to introduce a national citizen service in Wales next year?

[Mr Hurd]

I thank my hon. Friend for getting so actively engaged with the NCS this summer. I am delighted that Northern Ireland teenagers will be involved in the pilots this autumn, and we have extended the offer to the Welsh Assembly. I hope he can help us to get a positive response to that.

[Kate Green (Stretford and Urmston) (Lab)]

T3. Earlier this year, Ministers announced the closure of the Driver and Vehicle Licensing Agency office in my constituency, which was widely used by small local motor traders to get their vehicle licences. Will the Minister confirm that he is having discussions, and urging colleagues in BIS to have discussions, with the motor trade about whether the Post Office might pick up that slack?

[Mr Maude]

The public can already carry out a number of functions and transactions relating to the DVLA through the post office network, and the DVLA has one of the best online applications for renewing car tax, but we are looking, with my right hon. Friend the Secretary of State for Transport, at how it can be further modernised to improve service and save more money.

[Robert Halfon (Harlow) (Con)]

T8. In July 2011 the Department for Work and Pensions introduced a new standard contract that encouraged its suppliers to hire 5% of their work force as apprentices. A year later, more than 2,000 apprenticeships have been created, at no extra cost to the Government. Is the Minister aware that rolling that out across Whitehall will create thousands of new apprenticeships?

[Mr Hurd]

My hon. Friend makes a good and valid point. This Government have a proud record on creating apprenticeships. Our position is not to put a blanket condition on Departments, but to encourage them to take an innovative approach, such as the one he mentions in the Department for Work and Pensions.

The Prime Minister was asked—

[Mr Dennis Skinner (Bolsover) (Lab)]

Q1. If he will list his official engagements for Wednesday 5 September.

[The Prime Minister (Mr David Cameron)]

I am sure that the whole House will wish to join me in paying tribute to the servicemen who have fallen since the House last met: Lieutenant Andrew Chesterman of 3rd Battalion the Rifles, Lance Corporal Matthew Smith of 26 Engineer Regiment and Guardsman Jamie Shadrake of 1st Battalion the Grenadier Guards. We send our deepest condolences to their colleagues, friends and loved ones. Their courageous and selfless service to our country will never be forgotten.

Before listing my engagements, I would like to say on behalf of the Government, and I hope the whole House, a word about the huge success this summer of the Olympic and Paralympic games. I want to send all our congratulations on the superb performance of Britain’s athletes and Paralympians. I want to say a huge thank you to the volunteers who put such a smiling face on the games and a large well done to all the organisers. I think that they made the entire country proud and, as they promised, they have indeed inspired a generation.

This morning I had meetings with ministerial colleagues and others, and in addition to my duties in this House I shall have further such meetings later today.

[Mr Skinner]

Is the Prime Minister aware that his Cabinet reshuffle of his B team has not raised a ripple with the general public? On the other hand, those loud boos that greeted the Chancellor of the Exchequer will haunt the posh boys for ever. Why does The Prime Minister not be a man, do the decent thing and call a general election?

[The Prime Minister]

It is very good to see the hon. Gentleman back in such good form. I am sorry that when I was forming my Government of all the talents I could not find him on my speed dial, but I have done something that new Labour never managed: I have taken a miner and put him in the Cabinet, and he is running the railways. I thought the hon. Gentleman would appreciate that. [Interruption.]

[Mr Speaker]

Order. The House must calm down.

[Nadine Dorries (Mid Bedfordshire) (Con)]

Mr Speaker, you will be aware that the Deputy Prime Minister and the Liberal Democrats reneged on a promise to deliver boundary changes in exchange for a referendum on the alternative vote. If the Deputy Prime Minister goes to the Prime Minister and says that he will deliver boundary changes in exchange for state funding of political parties, what will the Prime Minister’s answer be?

[The Prime Minister]

I am not in favour of extending state funding. I think that it is very important that all political parties work hard to attract members and donations. Frankly, when we get those donations we pay credit to people for funding political parties, which is in the public interest.

[Edward Miliband (Doncaster North) (Lab)]

Let me join the Prime Minister in paying tribute to Lieutenant Andrew Chesterman of 3rd Battalion the Rifles, Lance Corporal Matthew Smith of 26 Engineer Regiment and Guardsman Jamie Shadrake of 1st Battalion the Grenadier Guards. They all died serving our country. Their sacrifice will never be forgotten, and our thoughts are with their families and friends.

I also want to join the Prime Minister in paying tribute to everyone involved in the Olympic and Paralympic games—our athletes, our fantastic volunteers and indeed the whole country, which united in support of team GB. It showed our country at its best, it brought Britain together and we should all be proud of the achievement.

After two and a half years in government, the Prime Minister returned from his summer break and told the nation that he now realised it was time to “cut through the dither”. Who did he have in mind?

[The Prime Minister]

The right hon. Gentleman has had all summer to think of a question. Is that really the best he can do?

Let me explain to the right hon. Gentleman what this reshuffle is all about. It is not that there are two economic Departments in our country, the Treasury and Business; I want every single Department to be about the economy. I want the Transport Department building roads; I want the Communities Department building houses; I want the Culture Department rolling out broadband; and I want the Agriculture Department backing British food. This is a Government who mean business, and we have got the team to deliver it.

[Edward Miliband]

The Prime Minister mentions the reshuffle; it is good, of course, to see the Chancellor still in his place. I have to say to the Prime Minister that he has come up with an ingenious solution to the problem of his part-time Chancellor: he has appointed another one—the former Justice Secretary, the right hon. and learned Member for Rushcliffe (Mr Clarke). It is a job share; we will see how they get on.

I do not know whether the Prime Minister remembers, but a year ago he published his national infrastructure plan alongside the autumn statement. He said at the time of that plan that it was an

“all-out mission to unblock the system”.

Can he tell us, one year on, how many of the roadbuilding projects announced in that plan have actually started?

[The Prime Minister]

First, I am glad that the right hon. Gentleman mentioned the issue of Chancellors, because I have got my first choice as Chancellor, while he has got his third choice as shadow Chancellor. Apparently, he still has to bring in the coffee every morning—that is how assertive and butch the Leader of the Opposition really is.

The right hon. Gentleman asks about infrastructure. If we look at what is planned by this Government, we see that between 2010 and 2015 we will be investing £250 billion in infrastructure. That compares with just £113 billion between 2005 and 2010. That shows that he has absolutely not got a clue.

[Edward Miliband]

The difference between the shadow Chancellor and the Chancellor is that the shadow Chancellor was right about the economy and the Chancellor was wrong. I have to say that the Paralympic crowd spoke for Britain.

However, it is another Prime Minister’s questions, we are back and, characteristically, the Prime Minister does not answer my question. The answer is that none of the roadbuilding programmes announced in his grand infrastructure plan has started.

Let us look at another grand claim the Prime Minister made. In March, he published his housing strategy. He said:

“our housing strategy is beginning to get Britain building again.”

Before he starts talking up his next announcement about housing, let us look at the effect of the last one. Can he tell us how many houses have started to be built since his announcement?

[The Prime Minister]

Housing starts are up 30% since 2009, which was the lowest rate of house building since the 1920s. That is what the right hon. Gentleman’s Government left. He praised his shadow Chancellor to the gunnels, but let us remember that it was the shadow Chancellor who landed us in this mess. Who was the City Minister when the City went bust? The shadow Chancellor. Who was the man who gave us the biggest budget deficit in the developed world? The shadow Chancellor. That is what that team has delivered and that is why the British people will never trust them again.

[Edward Miliband]

I think that sometimes the right hon. Gentleman forgets that he has been Prime Minister for two and a half years. He has got to defend his record, and he cannot defend his record. Again, he did not answer my question. I asked him about what had happened to housing starts since he made his announcement. The reality is that housing starts have fallen since then. They are 24% lower than they were a year ago and lower than they were at the time of the last Labour Government. Another grand claim has not materialised.

Now, let us talk about planning. In March, after 18 months of consultation, the Prime Minister hailed his flagship planning policy and said that it was the biggest revolution in 60 years. But on Sunday he said that he was “frustrated” by the system and the

“hoops we have to jump through”

and that he wanted to change it again. How is he so incompetent that he brings in a flagship planning Bill, calls it a revolution, and then six months later says that it is not fit for purpose?

[The Prime Minister]

The national planning statement that we inherited from Labour was over 1,000 pages; it is now down to just 52 pages. We have radically simplified the planning system—something that the right hon. Gentleman should be praising rather than attacking. He might want to notice that today the World Economic Forum has come out and said that for the first time in a decade, instead of Britain going down the world competitiveness ratings, we are back in the top 10 and rising. Let me read what it said:

“The United Kingdom…continues to make up lost ground in the rankings this year”—

lost ground that happened under the last Labour Government. There is a reason for that—it is because this Government are cutting regulation, cutting corporate tax, taking people out of tax, getting our businesses moving right across our country, investing in the regional growth fund, and delivering more apprenticeships than any previous Government. That is what we are delivering; what has he done over the summer? Where are the policies on welfare? Nothing. Where are the policies on education? Nothing. Where is the great plan for our economy? His only answer to a debt crisis is to spend more, borrow more, and put up the debt.

[Edward Miliband]

Back to the bunker after that one, I am afraid. I think the crimson tide is back as well.

Over the past two and a half years we have seen announcements on infrastructure—failed; announcements on housing—failed; announcements on planning—failed. What is the reason for this economic failure? The reason is that the Prime Minister’s fundamental economic approach is wrong. After the summer we now know that in his whole two and a half years as Prime Minister the British economy has not grown at all. So why does he not admit it? The real problem is this: plan A has spectacularly failed.

[The Prime Minister]

Let me tell the right hon. Gentleman what is actually happening in our economy, which is that we are seeing the private sector growing and expanding. There are 900,000 more people employed in the private sector than there were two years ago. We are now a net exporter of cars and motor vehicles for the first time since the 1970s. We are seeing the fastest rate of business creation that we have seen for decades. That is what is happening. Our economy is rebalancing. There is growth in the private sector. Our exports to China are up 72%, to India up 94%, and to Russia up over 100%. That is what is happening. It is a hard road, it is a difficult road, but we will stick to that road because we will deliver for the British economy.

[Edward Miliband]

We are in the longest double-dip recession since the second world war. How out of touch does this Prime Minister sound? [Interruption.] I have to say to the Tory Members of Parliament that they can go to their constituents and start trying to blame everyone else, but they have been in government for two and a half years. It has happened on their watch.

We saw a reshuffle yesterday. The Prime Minister brought back the right hon. Member for Yeovil (Mr Laws), who had been sacked; he promoted the Culture Secretary, who should have been sacked; and he left in place the part-time Chancellor, who the whole country knows should be sacked. It is the same old faces and the same old policies—a no-change reshuffle. If the Prime Minister really wants to cut through the dither, there is no place like home.

[The Prime Minister]

The big difference in British politics is that I do not want to move my Chancellor; the right hon. Gentleman cannot move his shadow Chancellor. The fact is that in spite of all the economic difficulty this is a strong and united Government, and in spite of all the opportunity this is a weak and divided Opposition. [Interruption.]

[Mr Speaker]

Order.

[Hon. Members]

More!

[Mr Speaker]

There is going to be more, and it is going to be from a knight—Sir Malcolm Bruce.

[Sir Malcolm Bruce (Gordon) (LD)]

Thank you, Mr Speaker. I wonder whether the Prime Minister has seen today that PricewaterhouseCoopers has produced a report saying that Aberdeen needs to recruit 120,000 skilled people in the next 10 years if we are to deliver our capacity in the global energy economy. Will the Government take steps to ensure that an energy academy and the necessary support infrastructure for training are put in place so that we can deliver growth for the United Kingdom?

[The Prime Minister]

My hon. Friend raises a very important point, which is that the growth of the economy around Aberdeen, obviously linked to North sea oil, has been extremely successful. I want to see that continue to expand and I will listen very carefully to what he says and look at what the British Government can do to help provide that extra capacity, which I have seen for myself.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

Q2. Will the Prime Minister confirm that we learned over the summer that the UK borrowed £9.3 billion more in the first four months of this year than it did in the corresponding period last year?

[The Prime Minister]

We have cut the budget deficit by a quarter in two years but, obviously, it is immensely challenging to get the deficit down. I note that Labour’s answer to getting the deficit down is to borrow more—to borrow an extra £200 billion. The one way you cannot get borrowing down is to put borrowing up.

[Nicola Blackwood (Oxford West and Abingdon) (Con)]

Q3. My constituents were delighted when BMW announced the investment of £250 million to increase Mini production and called its Oxford plant the heart and home of this great British success story. Does the Prime Minister agree that this kind of inward investment is vital to kick-start the economy and that we must do more to prioritise policies to make the UK more attractive to investors?

[The Prime Minister]

My hon. Friend and I have neighbouring constituencies and many constituents who work at BMW at the old Cowley works. It is very good news that BMW is investing another £250 million in that plant on top of the £500 million announced last year. That is safeguarding over 5,000 jobs in the Oxford, Swindon and Hams Hall plants. It is part of a huge recovery story for the British motor manufacturing industry. We are now net exporters. That has not happened since the 1970s and it is a huge credit to Jaguar Land Rover, Nissan, Toyota, BMW—to all those companies that are investing in and choosing Britain. They are not choosing Britain because of the weather; they are choosing Britain because we have cut corporation tax, because we are investing in apprenticeships, because we are investing in the infrastructure that they need, and because they know that this is a country open to business.

[Alison McGovern (Wirral South) (Lab)]

Poor Wirral families face the indignity of food banks, and Save the Children is launching its first ever public campaign for British children. What is the Prime Minister doing to help?

[The Prime Minister]

What we are doing is making sure that we target help on the poorest families in our country, which is what we have done through the tax credit system. At the same time, we should praise all the voluntary and big society efforts to help the poorest families in our country.

[Mel Stride (Central Devon) (Con)]

Q4. Will my right hon. Friend join me in paying tribute to the 23 million people in our country who work with such commitment in the private sector—the sector that generates the wealth that this country so desperately needs? Will he also welcome, as I do, the fact that under this Government we now have more people employed in the private sector than at any time in our history?

[The Prime Minister]

The point my hon. Friend makes is very important. If you look at the figures and include all of the financial sector, you will see that there are more people employed in the private sector today in Britain than at any time in our history. [Interruption.] Oh, the shadow Chancellor says that that is because we are in recession. It is because companies are choosing to employ people and the private sector is getting larger, which is good news. Employment is up 201,000 this quarter; unemployment is down 46,000 this quarter; the claimant count has fallen; the rate of unemployment is down; youth unemployment is down—I would have thought that the whole House would welcome those figures.

[Helen Jones (Warrington North) (Lab)]

Q5. Last Sunday the Prime Minister told us that there should be no more excuses for failure. Given that his policies have produced the longest double-dip recession since the war, with output down, borrowing up and a collapse in consumer confidence, is his failure to apologise because he does not take his own advice, or because he considers that a record of astounding success?

[The Prime Minister]

This comes from an hon. Lady who served in a Government who, after 13 years, delivered us the longest and deepest recession since the war and who gave us the biggest budget deficit of virtually any country in the developed world. Of course, it takes time to get yourself out of a hole as deep as the one that was dug by the shadow Chancellor and the leader of the Opposition.

[Gavin Williamson (South Staffordshire) (Con)]

Q6. Over the summer, Jaguar Land Rover announced the creation of 1,100 additional jobs at its Castle Bromwich plant. That is in addition to the 750 jobs that it is creating in my constituency of South Staffordshire. Does my right hon. Friend agree that there is a stark contrast between the rhetoric of the last Labour Government about reviving the automotive industry, and the actions and delivery of this Government?

[The Prime Minister]

My hon. Friend is absolutely right. In the past two years, Jaguar Land Rover has hired an extra 8,000 new workers. That is a massive success story for the west midlands and for a great British brand. It is also, let us say so, a big success story of massive inward investment from the Indian parent company. We should praise all those things and recognise that we have to do even more to make Britain a really business-friendly country, with low rates of regulation, low rates of tax and lots of support for apprenticeships and infrastructure. That is what we are delivering, and we will continue to do so.

[Stephen Timms (East Ham) (Lab)]

Q7. Hundreds of young people from outside Europe chose London Metropolitan university, confident in British higher education. The Prime Minister needs to tackle visa fraud, but will he lift the threat to deport students who have paid their fees and complied fully with all the rules? Why is he so damaging the standing of British universities around the world?

[The Prime Minister]

I know that the right hon. Gentleman speaks with considerable experience and wants to speak up on behalf of his constituency. Having looked at this case and at the action that the Border Agency has taken, it seems to me that there were some real abuses. I want Britain to be open to students. Let us be clear: anyone who can speak English and who has a university place is able to come here and study at our universities, but the Minister for Immigration has rightly been very hard in closing down bogus colleges and in ensuring that action is taken when good universities, like this one, are not meeting the rules. That must be right if we are to control immigration.

[Richard Harrington (Watford) (Con)]

Is my right hon. Friend the Prime Minister aware that in Watford in the last quarter of 2012, for which the numbers have just come out, 327 new companies were incorporated? That is a record and is way beyond anything in history. I think he will agree that that shows that the Government’s policy of encouraging private enterprise is succeeding.

[The Prime Minister]

My hon. Friend makes an important point. As I understand it, 2011 saw the fastest rate of new business creation of any year in decades. That is what our economy requires. It takes time and patience, because we need a massive rebalancing away from the public sector and towards the private sector, and we need other industries, not just finance and retail, to succeed. We want to see business regeneration right across our country. That rebalancing takes time and is difficult, but it is the only long-term way out of the economic difficulties that we were left by the Labour party.

[Paul Blomfield (Sheffield Central) (Lab)]

Q8. The Prime Minister is right to celebrate the most extraordinary Paralympics, which we are seeing at the moment, and the exceptional achievements of Team GB within those games. What, then, does he say to Baroness Grey-Thompson and the other Paralympians who warned this week that his decision to cut disability living allowance will prevent disabled people from participating in sport and threaten the legacy of the London games?

[The Prime Minister]

The message that I would give to everyone in ParalympicsGB—which is, of course, a separate team from Team GB—is a huge congratulations on their massive success at the games. It has been truly inspiring to see on television or in person, which I have had the privilege of doing, the absolutely packed stadiums for the Paralympics. That is not something that everyone expected, but it says a lot about our country and our people, and is great for the Paralympics.

To answer the hon. Gentleman’s question directly, we are not cutting the money that is going into supporting disability. We are reforming the system by replacing disability living allowance with the personal independence payment. That is all about recognising people’s needs. It has been worked up very carefully with the disability lobby and I think that it will be an improvement on the current system.

[Mark Garnier (Wyre Forest) (Con)]

Q9. The Prime Minister is well aware of the lack of capacity at Britain’s airports. In seeking to resolve that problem, will he consider the opportunity presented by regional airports, such as those in Birmingham, which could help to rebalance the economy?

[The Prime Minister]

My hon. Friend makes a very good point about regional airports. Let me be very frank about this: these very large infrastructure projects are extremely difficult for individual Governments to take on and deliver. What we need to do is build a process that will hopefully have cross-party support, so that we can look carefully at the issue and deliver changes that will address the problems of capacity that we will have in future years and the issue of the UK’s hub status. I hope to make an announcement about that in the coming days, but it is important that we work across party lines, because this will not happen unless parties sign up to a process that can deliver.

[Mrs Anne McGuire (Stirling) (Lab)]

I just wonder whether I can cut through the waffle that the Prime Minister gave us in answer to the question about disability living allowance. The reality is that 600,000 disabled people will lose an extra cost benefit. Instead of just giving warm words to disabled people in this country, why does he not take aside his immovable Secretary of State for Work and Pensions and say to him that it is time we thought again on this one?

[The Prime Minister]

The move from disability living allowance to personal independence payments has been an exercise of huge consultation with the disability lobbies to try to ensure that we get this right. The fact is, there are hundreds of thousands of people on DLA who have never had a recheck since they started to take on that benefit, and many others—I know this as a parent who filled out the form myself—who have to fill out reams of answers to questions without the proper medical check that would actually get them the benefit quicker. We are moving from an old system that is out of date to a new system that will actually help disabled people.

[Chris Heaton-Harris (Daventry) (Con)]

Q10. Selective dorsal rhizotomy is the name of an operation that allows children with spastic cerebral palsy, like my constituent Holly Davies, to leave their wheelchair behind and walk independently. It has been carried out successfully thousands of times in the United States but is available only privately in the UK as the National Institute for Health and Clinical Excellence refuses to allow the operation on the NHS. Will the Prime Minister look at the situation and help me, and the families across the country who are currently raising money for their children to have the operation, to get NICE to change its mind?

[The Prime Minister]

I will certainly look closely at that. I quite understand, as a parent of a very disabled child who had cerebral palsy, that if there was anything that a parent could do to get their child out of the wheelchair, they would want that to happen. I have looked at this case, and NICE actually says that the operation is a treatment option for some children and young people, but it cautions against the potentially serious complications, because it is an irreversible operation with risks involved. However, I will look at the matter very carefully and see whether there is anything more that NICE should consider.

[Mr David Anderson (Blaydon) (Lab)]

Q11. Whenever the Prime Minister is faced with industrial dispute in this country, he always advises the trade unions to go for reconciliation and arbitration. In the interests of fairness, will he speak to his new Health Secretary and ask him to involve himself in the dispute at Northumbria Healthcare NHS Trust, to ask its board to do what the union is asking for and refer the dispute to the NHS Staff Council for resolution?

[The Prime Minister]

The new Health Secretary will have been listening carefully to that, and I am sure he will be able to discuss the matter with the hon. Gentleman.

[Mr Alan Reid (Argyll and Bute) (LD)]

It is very important that motorists have the right to renew their car tax at the post office. Not everybody has internet access. The Driver and Vehicle Licensing Agency contract is up for renewal soon. Will the Prime Minister please ensure that the contract stays with the Post Office?

[The Prime Minister]

My hon. Friend makes an important point, particularly as he represents a very far-flung rural constituency with people living across a number of different islands. I am sure the Business Secretary will have been listening carefully to what he says, although the Government can make a limited amount of interference in such contracts.

[Gavin Shuker (Luton South) (Lab/Co-op)]

Q12. Does the Prime Minister have full confidence in his police and crime commissioner in Hampshire?

[The Prime Minister]

What I would say about the police and crime commissioners is that we have not yet had the elections. We are going to have elections in November, and this is a very good opportunity to broadcast from this House what an important set of elections those are. I want to see a new form of accountability coming through in our police forces, and this is an excellent reform. I am sure that many people want to turn out and vote, hopefully for their local Conservative candidate.

[Andrew Percy (Brigg and Goole) (Con)]

Over the summer, a number of communities across Brigg and Google, including Swinefleet and Crowle, suffered flooding, in part because our drainage dykes are not cleared out as drainage boards fear prosecution under conservation of habitats legislation. Will the Prime Minister meet his new Environment Secretary and take away that threat of prosecution, so that drainage dykes that were built and dug to protect property can do their job?

[The Prime Minister]

As someone who represents a constituency that has frequently been subject to very bad flooding, I know how many frustrations there can be in local communities when things that need to be done do not get done quickly enough. Sometimes that is the fault of different agencies, sometimes that of landowners, sometimes that of local authorities. All sorts of issues have to be crunched through, but I am sure that the Environment Secretary will have listened closely to what my hon. Friend said.

[John McDonnell (Hayes and Harlington) (Lab)]

Will the Prime Minister confirm, with no ifs or buts, that there will be no third runway at Heathrow airport while he leads his party?

[The Prime Minister]

Let me say clearly that, while I believe that we need to establish a form of review that will bring parties together and make a decision about airport capacity, I will not break my manifesto pledge.

[Mr John Baron (Basildon and Billericay) (Con)]

A letter from and meeting with the Secretary of State for Defence has confirmed that the 2nd Battalion the Royal Regiment of Fusiliers is the only battalion that should not have been cut on military grounds. What did for 2RF was the additional criterion that regimental losses be capped at one battalion, thus saving more poorly recruited Scottish battalions ahead of a Scottish referendum. Will the Prime Minister kindly meet me and other MPs from across the House to discuss the issue?

[The Prime Minister]

I am happy to arrange a meeting between my hon. Friend, the Defence Secretary and other interested Members. It is right for the Army to change in its structure—not in its overall size; with 82,000 regular soldiers and 30,000 territorials, the Army’s overall size will not change. It was and is difficult to do that in a way that respects regimental traditions, cap badges and issues that I know are very dear to a number of hon. Members. However, it is important that we do that across the United Kingdom. That is what the Government set out to do, but I am happy to arrange that meeting.

Post Offices (Clifton, Bristol)

Wednesday 5th September 2012 Commons Chamber

Stephen Williams (Bristol West) (LD)

- Hansard - - Excerpts

The petition is from Bristol West constituents and concerns a post office in my constituency, one of the many that were closed between 2004 and 2008 under the previous Government—the Alma Vale road post office in Clifton, which is still trading as the Clifton Mini Market. The owner of the shop, Mr Satnam Singh, has collected the support of approximately 400 customers who want him to reopen the post office on a voluntary basis.

The Petition states:

The Petition of residents of Bristol West constituency,

Declares that the Petitioners support the proposed re-opening of the Clifton Mini Market Post Office.

The Petitioners therefore request that the House of Commons urges the Department for Business, Innovation and Skills to make provision for post offices to be operated on a voluntary basis so that communities such as ours may gain an invaluable service.

And the Petitioners, as in duty bound, will ever pray.

[P001115]

Point of Order

Wednesday 5th September 2012 Commons Chamber

12:31

[Paul Flynn (Newport West) (Lab)]

On a point of order, Mr Speaker. May I raise, with some embarrassment, something that I believe is a genuine point of order? It concerns recording the names and paying tribute to those who have fallen in Afghanistan. You may have noticed, Mr Speaker, that 13 pages of the Notices of Motions paper list the names of those who sacrificed their lives in Afghanistan. Under the recent rules of the House, it is impossible to read out that list in the House. It would now take a long time—about 30 minutes—to record, with decent pauses between the names, the entire list of 425 brave soldiers who have given their lives. Could we consider, on at least one occasion of the year, paying our tribute in that way so that we can see, by hearing each name, the true cost of a war that has become a mission impossible?

[Mr Speaker]

The hon. Gentleman has raised a serious point that warrants serious consideration. I hope he will understand that, rather than give a knee-jerk response now, I say to him that I have heard and that I will respond to him in writing.

Pre-Paid Meters (Level of Debt)

Wednesday 5th September 2012 Commons Chamber

Motion for leave to bring in a Bill (Standing Order No. 23)

12:32

[John Robertson (Glasgow North West) (Lab)]

I beg to move,

That leave be given to bring in a Bill to require the Secretary of State to raise the level of debt below which pre-paid meter customers may change their energy supplier; and for connected purposes.

I raised this issue in Parliament before through an oral question to the Secretary of State for Energy and Climate Change on 26 January 2012 at column 401 of Hansard, and again in a written question on 1 May 2012 at column 1506W. On the first occasion, the right hon. Gentleman said that he would ask Ofgem to look at the matter in detail, and on the latter, he said that it was to be dealt with by Ofgem. In the interests of hundreds of thousands of energy customers, I am presenting the Bill today to get some actual movement.

Through raising the level of debt at which pre-paid meter customers may change their energy supplier from £200 to £350, around 200,000 customers could escape crippling energy tariffs. It is a tiny change, but it would make a huge difference. I have mentioned time and again how the cartel-like big six have too much power. By trapping disadvantaged customers into extortionate tariffs, they are proving once again that they need to be shown what it means to be fair and responsible.

The profits of the big six energy companies have gone up almost a third since 2008, and payouts to shareholders increased across the board an incredible sixfold since 1999 in the case of Centrica, which owns British Gas. This is the time for it, and others, to give something back.

If each of those 200,000 customers were to save a maximum of £138 a year, it would cost energy companies a combined £27.5 million. That sounds like a lot until we realise that last year, British Gas alone made 12 times that amount in profit. Furthermore, the money saved by those 200,000 people would be spent on paying back debts to energy companies, so it is not that bad. I have spoken with Ofgem about this matter. It agrees with me in principle, although as usual it moves at snail’s pace. I would like to see it move quicker on this simple solution to the debt of hundreds of thousands of people. Let us work together to get a fair deal for prepayment customers.

In January 2010, Ofgem changed its policy so that customers with a debt of £200 or less were able to switch energy supplier as long as the new supplier was willing to take on that debt, which in most instances was the case. More people were able to take advantage of greater savings to be made by switching supplier, which meant that they could pay off their arrears more easily, cutting short a spiral of mounting debt. The £200 debt level worked then, but we could and should do more now.

More than 1.5 million electricity and gas customers are currently in debt, and almost 1 million of those can switch supplier to get a better deal on their energy tariff. The Bill would add 200,000 people to that figure and ensure a fairer system. Importantly, those 200,000 people are among the most disadvantaged in our society, and chose a prepayment meter as a way of responsibly managing their weekly budget. About a quarter of prepayment meter customers are thought to be fuel poor, and they are disproportionately represented in the social housing rented sector. People are three times more likely to be in debt if their income is in the lowest quintile, and it is evident that the 200,000 people I have mentioned are among those struggling to pay rising food and housing costs, and, of course, energy bills.

According to Which?, 84% of people are worried about their energy bills. Consumers spend one week a year worrying about their finances, and people with less debt are often happier. What do our outdated regulations do? They add extra worry to people who are already concerned about job security and a double-dip recession. There are examples of people fiddling their meters to try and reduce their energy bills, and the number of people doing that has risen 30% since 2007. I do not say that that is right—it is not and there is a price to be paid—but I understand why they are doing it.

I am even more concerned about people who reduce their energy usage in order to save money to pay off their debt. The number of pensioners dying from cold has nearly doubled in five years. Last winter, Save the Children found that half of all families planned to turn the heating off for longer to keep their bills down, leading to problems such as children in cold homes being twice as likely to suffer from respiratory problems. I would not be surprised if some people are cutting down their energy use in order to pay off their debt, which is completely unacceptable. We can tackle the problem by giving 200,000 people the freedom to make their debt more manageable by switching to a cheaper tariff or company.

Some people are very badly affected by their debt, and it is sad that it is so easy for them to get into such a position. For example, they may not have been identified as vulnerable by energy companies, and been placed on a prepayment meter after racking up hundreds of pounds of debt while struggling to pay astronomical energy bills on a credit meter. Energy companies need to take responsibility for such confusions and mistakes, and allow people to switch suppliers to help them pay off their debts.

For my more business-friendly opponents and colleagues, I will also outline the benefits of this proposal to the energy companies themselves. As it stands, £478 million is owed to energy companies, and by making it easier for a large proportion of customers to pay that back, energy companies can recoup their losses. uSwitch estimates that pre-paid meter customers could save £138 a year just by switching, so a £350 debt could be paid off in just over two years without them making any sacrifices. Both customers and energy companies would be better off; it would be a win-win situation.

Those are arguments for increasing the debt level, but why should we increase it from £200 to £350? First, the £100 limit was increased to £200 in 2010 to reflect higher energy bills and debt levels, but times have changed. Energy bills have increased by 140% in eight years and by 20% in the last two years. They have risen seven times faster than household income and continue to rise. SSE announced a price hike of 9% on 22 August, despite a 7.7% rise in its pre-tax profits over the past year. I am sure there are more price rises to follow and that history will repeat itself: when one company raises its prices, the others are never far behind. The average amount of debt is now around £350. That is the average and not the maximum. In the past two years, severe cuts have led to a double-dip recession, making it even harder for those involved. Ofgem agrees that the level is currently too low, but we need to speed up the process.

Secondly, £200 is not what it used to be. Its value has decreased by more than 10% since the level was set. It would not buy an iPhone or a BlackBerry or any of the company phones that the energy company executives walk around with. It would not buy a return ticket to EDF’s global headquarters in Paris, E.ON’s global headquarters in Düsseldorf or Scottish Power’s global headquarters in Bilbao, and yet for energy customers in debt who are unable to switch their tariff, paying the money back can be demanding and tiring. If we can agree on that, we will have the chance to make a small change to an outdated regulation that will make a huge difference to hundreds of thousands of people. Those are the people we need to help most, because they are vulnerable to debt and in fuel poverty.

I have taken the lead with help from my supporters and colleagues. All who work on energy issues have made such efforts at some point or another. This should be a lesson to Ofgem. Its job is to look at these issues and ensure customers have a fair deal. As I said, I began asking this question back in January. If Ofgem had sorted the problem out at that time, I would not be standing here today. I could have stopped at that point and left the matter with Ofgem, but the sad fact is that I did not feel I could leave Ofgem to get on with dealing with it quickly. I am therefore introducing the Bill to ensure that the debt level is changed before the winter, before other people die because of their energy costs.

Question put and agreed to.

Ordered,

That John Robertson, Mr Tim Yeo, Albert Owen, Laura Sandys, Dr Alan Whitehead, David Simpson, Mr Mike Weir, Jim Sheridan, Mr Alan Reid, Cathy Jamieson, Ian Lavery and Sir Robert Smith present the Bill.

John Robertson accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 18 January 2013, and to be printed (Bill 65).

[Chris Bryant (Rhondda) (Lab)]

On a point of order, Mr Speaker—you do not have to smile.

In 1624, as I am sure you are aware, the House decided that no Member could resign their seat. In 1680, we decided that we would invent the legal fiction that a Member appointed to an office of profit under the Crown is deemed to have resigned their seat. At the beginning of August this year, Mrs Louise Mensch— I make no criticism of her whatever—believed she had resigned her seat, but was not appointed to an office of profit under the Crown for a further three and a half weeks. Consequently, she described herself as a “resigned MP”, but was none the less a Member of Parliament, because a Member has not resigned their seat until the Chancellor appoints them to the office.

I raise this matter as a point of order because there is an important matter of precedent here. I am not aware of any time in the past when there has been such a delay, other than in 1842 when the Government refused for party political purposes to appoint a Member so as not to allow a by-election.

[The Minister of State, Department for Transport (Mr Simon Burns)]

And 1963.

[Chris Bryant]

Will you, Mr Speaker, therefore reinforce to the Chancellor that it is important to appoint a Member the moment they seek to resign their seat through such an appointment?

[Mr Speaker]

I think it is a matter for further consideration and, on the occasions that this issue has been raised, if not in quite the same terms, I have suggested to Members concerned about it—I recall the hon. Member for Walsall North (Mr Winnick) expressing his discontent with the status quo—that it could be considered by the Procedure Committee. That is one possibility, but it certainly warrants further discussion. I note what the Minister of State, Department for Transport, has said with reference to 1963, and I feel sure that he is right.

[Chris Bryant]

And why am I wrong?

[Mr Speaker]

I did not say that the hon. Gentleman was wrong—he should not look for an argument!

Opposition Day

Wednesday 5th September 2012 Commons Chamber

[5th Allotted Day]

Rail Fares

Wednesday 5th September 2012 Commons Chamber

12:46

[Maria Eagle (Garston and Halewood) (Lab)]

I beg to move,

That this House believes that the rising cost of rail travel is adding to the financial pressures facing many households; and calls on the Government to restore the one per cent above inflation cap on annual fare rises for 2013 and 2014, and to ban train operators from increasing fares beyond that strict limit.

I begin by congratulating the right hon. Member for Derbyshire Dales (Mr McLoughlin) on his appointment as Secretary of State. He returns to a Department he left some 20 years ago—time flies—after serving for three years as the Minister with responsibility for aviation and shipping. Only three years thereafter—I hope not as a result of his experience—he took a 17-year vow of silence in the Government and Opposition Whips Offices, from which he emerges today, probably blinking into the light. I think I speak for the whole House when I say that we are all very keen to hear what he has to say. He is the third Secretary of State for Transport I have faced since taking up my role in opposition. I hope for his sake he lasts a little longer than his predecessors and I wish him well in the role.

I also welcome his new all-male team—of course, that is a matter for the Prime Minister, not the Ministers he appointed—including the Minister of State, Department for Transport, the right hon. Member for Chelmsford (Mr Burns), and the Under-Secretary of State for Transport, the hon. Member for Wimbledon (Stephen Hammond). Another Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), of course provides the continuity in the Department—something that he probably never thought he would do.

We are debating an Opposition motion, but there need be no disagreement in the House today. I hope that all right hon. and hon. Members, including Ministers, will feel able to support the motion in the Lobby later this afternoon. It is a straightforward motion with a simple proposition—that the rising cost of rail travel is now adding to the financial pressures facing many households. That is a fact, and I would hope that we will see agreement at least on that. It is something that we are all hearing from our constituents. I also hope that we can agree on a second basic proposition—that the level by which rail fares increase should not simply be left to the private train companies to determine. It is why we have the system of regulated and unregulated fares, with those tickets on which most people rely, including day returns and season tickets, having their annual increase capped.

There has always been cross-party agreement that there is a role for Government in the setting of fare levels and it is right that we retain the ability to protect our constituents from a profit-driven free-for-all on fare rises. The reality, however, is that the so-called cap on annual fare rises, even for regulated fares, is not a cap at all. So when the Chancellor stands up, as he does, and says that fares will not rise by more than 1% above inflation—or whatever percentage it might be—he cannot actually deliver that commitment at ticket offices across the country, because the cap is an average and train companies have the flexibility, as they like to call it, to increase fares by up to 5% above the so-called cap.

In January, just two months after the Chancellor had promised a 1% above-inflation cap on fare rises, what did commuters find when they went to buy their tickets? They found fare rises not of 1% above inflation but of up to 11% above inflation, because the train companies had exercised their flexibility to add up to another 5% on to some fares. That is what our constituents across the country face again in the coming new year—fare rises of up to 11%. We are kidding ourselves, therefore, if we think that what we are debating is whether the cap should be RPI plus 1 or RPI plus 3, because the train companies can game it to their advantage. That is why our motion proposes that if we are to have a cap on regulated fare rises—we believe that there should be one, and I think the Government do too—it should be a real cap.

[Mark Lancaster (Milton Keynes North) (Con)]

Given the hon. Lady’s concern about the impact of fare rises on families, will she join me in congratulating FirstGroup on its successful tender for the west coast rail franchise, given that it is committed to reducing by 15% the cost of a standard anytime return journey? Is this not a demonstration of an effective tender process by this Government?

[Maria Eagle]

Many questions have arisen from the announcement in the recess about the west coast main line. The hon. Gentleman is right to highlight that the winning bidder—we must remember that legal action is ongoing, so we are restricted in what we can say—has made that commitment, but issues have been raised over the deliverability and reality of the assumptions behind the winning bid. Those issues have been raised not only by some of the losing bidders but by other experts in the industry.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

Given what my hon. Friend has said, does she understand my concern and that of many of my constituents about what might happen to the east coast main line franchise when it comes up for reconsideration? Does she agree that there is a strong case at least for considering keeping the east coast main line in the public sector, so that there is not this pressure on requiring payback in profits and payback for the Government, which was clearly one of the issues in the west coast franchise?

[Maria Eagle]

I agree that there is a strong case for having a public sector comparator, at least when looking at franchising. That is how the current system operates.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Will my hon. Friend take it from me, as a Yorkshire Member, that these are extremely important issues? I am pleased that we have a Yorkshire MP as the new Transport Secretary—that is some consolation—but the east coast and west coast lines are vital to economic regeneration in Yorkshire and the north west. If we do not get it right, we will starve UK businesses in the regions.

[Maria Eagle]

My hon. Friend makes a strong point, even if his definition of Yorkshire is larger than everybody else’s. As somebody who was born in Bridlington, however, I understand that Yorkshire can be larger than one might think from looking at a map.

[Mrs Anne Main (St Albans) (Con)]

Does the hon. Lady not share my concern that under the previous Government, First Capital Connect, which runs the Bedford to St Pancras line, was obliged, because of its supported status, to claw back from the public? Imposing a cap now would put it in breach of its franchise. There were such obligations, entered into by the previous Government, on many of the franchises.

[Maria Eagle]

The hon. Lady makes a strong point. I agree that varying the fare cap on the basis of specific local investment promises in the rail network, which is what lies behind that issue, is not how we should set rail fares. Let us be clear, however: the Government are proposing a 3% above-inflation fare rise for the whole country, regardless of whether any additional investment is planned locally. Today’s motion, if supported across the House, would impose a clear national cap of 1% above inflation, so I hope that she will consider joining us in the Lobby to support it.

[Caroline Lucas (Brighton, Pavilion) (Green)]

I very much support Labour’s motion, although it is a bit timid. Given that privatisation has left us with a costly, fragmented and dysfunctional railway, and given that increasing evidence shows that reuniting railways under public ownership could save us up to £1 billion a year, would the hon. Lady not agree to go further and bring all the railways back into public ownership?

[Maria Eagle]

At this stage, that would go well beyond the motion before the House, but I hear what the hon. Lady says. Given that she is now no longer the leader of the Green party, however, I wonder whether it is Green party policy—no doubt we will find out in due course.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

The motion calls for an increase of RPI plus 1 for fares. I am sure that the hon. Lady knows that the Scottish National party is the only governing party in these islands that has not raised regulated rail fares. Would she be so kind as to congratulate the SNP Government, who are practising what the Labour party preaches?

[Maria Eagle]

I am disappointed by that intervention.

One always has to balance rises with the issue of affordability on the basis of the public finances, but there ought to be agreement around the House that inflation plus 1 is a realistic way forward in this Parliament.

[Several hon. Members]

rose—

[Maria Eagle]

No, I have taken several interventions and I want to make progress; otherwise I will take up the entire debate with my opening speech, which is not what Members want.

If train companies were banned from increasing fares any more than the strict limit set by the Government, we could then have a political debate about what is the affordable level for that cap, rightly taking into account the state of the public finances, but that decision would at least be more transparent and enforced. My noble Friend Lord Adonis, when he was Transport Secretary, took such a step and banned train companies from increasing regulated fares beyond the cap set by the Government. He has been very clear about this in oral and written evidence to the Transport Committee. [Interruption.] The right hon. Gentleman for Ch, Ch—

[The Minister of State, Department for Transport (Mr Simon Burns)]

Chelmsford.

[Maria Eagle]

I knew it began with a “Ch”—that might be a way to remember it in the future. The right hon. Gentleman has not taken too long to get back into the habit of heckling from the Front Bench—perhaps he never got out of it in his role at the Department of Health.

My noble Friend Lord Adonis has made it clear in oral and written evidence to the Transport Committee, and on many other occasions, that he fully intended the ban on train companies flexing the fare cap to continue into subsequent years. That would be perfectly possible. I have said on many occasions that the previous Government should have taken action earlier, but the fact is that when times got tough they acted, but when times got tougher still this Government chose to give back to the train companies the right to fiddle the fare cap.

[Dr Julian Huppert (Cambridge) (LD)]

Will the hon. Lady give way?

[Maria Eagle]

No.

What is the consequence? It is that the Government and the House do not have the ability to enforce the cap on fare rises they think they have approved. I therefore hope that we can all agree today that the cap should be precisely that—a cap, a maximum allowable increase.

Our motion also calls on the Government again to reverse their decision to increase the cap from RPI plus 1 to RPI plus 3 for 2013-14. This should not be a contentious proposal, and I hope that Members on both sides of the House will feel able to support it. I know that it is slightly devalued today, but Government Members might like to look back at the commitment they made in the coalition agreement:

“We are committed to fair pricing for rail travel”.

It simply is not credible to square that pledge with the decision taken to increase the annual cap on fares from RPI plus 1 to RPI plus 3.

Let us be clear who is benefiting from these excessive fare rises: the private train companies. I urge the new Secretary of State to ask his civil servants for a copy of a very good report—on his Department’s spending settlement and its progress in implementing it—recently published by the National Audit Office. It warns that the Department for Transport has failed to demonstrate that higher fares translate into payments back to taxpayers:

“There is a risk that the benefit of the resulting increase in passenger revenues will not be passed on to taxpayers fully, but will also result in increased train operating company profits.”

So there we have it. We know who benefits from fare rises: the private train companies.

[Mark Reckless (Rochester and Strood) (Con)]

Will the hon. Lady give way?

[Maria Eagle]

I am seeking to make some progress. If there is time, I will give way a little later.

I know that some hon. Members may think, “All well and good: these private companies should be able to make these very large profits for running our rail services.” However, I wonder whether Government Members have been keeping track of who has actually run our rail services since privatisation. For example, the Chiltern and CrossCountry franchises are run by subsidiaries of Deutsche Bahn, the German state railway. Southeastern, London Midland, TransPennine and Southern are all run in partnership with subsidiaries of SNCF, the French state railway, while Greater Anglia and Northern rail services are run by a subsidiary of Ned Rail, the Dutch state railway. Let us be clear: the ability of so-called private train companies to hike fares beyond the cap does not just mean additional profit, as the National Audit Office has warned; it means additional dividends from those profits going back to the state railways of France, Germany and the Netherlands. The consequence is that fares on their domestic rail networks are, on average, a third lower than those on ours.

[Mr John Leech (Manchester, Withington) (LD)]

Will the hon. Lady give way?

[Maria Eagle]

I will give way again in due course, but not at present.

I know that Government Members—those who are not serial rebels, and the Secretary of State knows who they are—may still want to ensure that they are in line with their Chancellor’s position on this issue. Let me therefore remind the House what the Chancellor himself said on the level of fare rises in last year’s autumn statement, when he performed one of his many post-Budget U-turns and bowed to pressure, not just from this side of the House, but from his own MPs, as well as rail passengers up and down the country. He said:

“RPI plus 3% is too much. The Government will fund a reduction in the increase to RPI plus 1%. This will apply across national rail regulated fares, across the London tube and on London buses. It will help the millions of people who use our trains.”—[Official Report, 29 November 2011; Vol. 536, c. 810.]

The real question today is: what has changed? Why is a 3% above inflation increase acceptable this year, when it was, in the Chancellor’s words, “too much” last year?

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

Is not the timeliness of today’s debate emphasised by the analysis of fares in the south-east conducted by the Campaign for Better Transport? Its chief executive, Stephen Joseph, pointed out just last month that commuters in the south-east routinely spend up to 15% of their salary on getting to work in London and that unless there is a change in fare policy by the Government, the cost of journeys to work is likely to rise by some £1,000 when fares next go up?

[Maria Eagle]

My hon. Friend makes an important point. We are all now hearing from constituents who are paying out significant parts of their salary in the mere effort to get to and from work. There comes a point when, with other pressures, it is not acceptable for fares to rise at the level that the Government are contemplating.

[Mr Leech]

If the hon. Lady is so concerned about the profits and extra money going into the pockets of foreign rail companies, why does the motion not suggest no increase above inflation?

[Maria Eagle]

The hon. Gentleman is right that there is a choice to be made about where to pitch the figure for RPI plus or minus whatever it is. Today’s motion is based on our current policy as it is—something I think the Government could agree with—which retains credibility in terms of deficit reduction, but which would also bring significant relief—[Laughter.] I do not know why Liberal Democrat Members are laughing. Despite their alleged policy to cut rail fares, they have voted repeatedly in this Parliament for Budgets, autumn statements and comprehensive spending review measures that increase rail fares by RPI plus 3%, so we are not going to take any lessons from them about how to implement policy on rail fares.

[Dr Huppert]

Will the hon. Lady give way on that point?

[Maria Eagle]

No, I will not.

Why is a 3% above inflation increase acceptable this year, when it was, in the Chancellor’s words, “too much” last year?

[Mark Reckless]

The hon. Lady asks why an RPI plus 3% increase might be acceptable, but this Government have not increased any rail fares yet by RPI plus 3%. The only RPI plus 3% increase happened on the Southeastern franchise under the last Labour Government, because we were used as guinea pigs.

[Maria Eagle]

The hon. Gentleman is simply wrong about that. RPI plus 3% was cut last year to RPI plus 1%, but the year before it was RPI plus 3%, so what he says is simply inaccurate.

If anything, pressures on household budgets have increased in the past year. Families are finding it even harder to make ends meet, get through the month and pay all the bills. We are in a double-dip recession made in Downing street. More than 1 million young people remain out of work. Energy, food and fuel prices are all up, adding to the pressures facing our constituents. The rate of inflation—the RPI figure that will be used to calculate January’s fare rises—went up to 3.2% in July. With flex, the formula for January’s fare rises, as it stands, is 3.2% plus 3% plus 5%, which means fare rises of up to 11.2%. We should get rid of flex, but we should also—as the Chancellor said less than a year ago—set the cap at 1% above inflation.

I know that the Secretary of State has been appointed to change some of the policies pursued by his predecessor—at least that is what the newspapers say. However, I hope that on this issue he will agree with the right hon. Member for Putney (Justine Greening), who told the Financial Times last month:

“I am keen to see what we can do to keep fares down to something affordable. I will be looking at whether there is a way of doing this in the autumn.”

She added that

“she did not know if the Treasury would make funds available to do this,”

but said:

“If you don’t ask, you don’t get, so I’ll make sure to ask.”

If the Secretary of State has not already done so, I hope that he will be asking the Chancellor to agree to the lower cap on fares, because as his predecessor rightly said, “If you don’t ask, you don’t get.”

[Rehman Chishti (Gillingham and Rainham) (Con)]

Will the shadow Secretary of State clarify whether she accepts that her Government were wrong to impose RPI plus 3% on Southeastern, when the rest of the country had RPI plus 1%? That meant that from the Medway towns to London there was an increase of over 33%. Does she accept that that was wrong?

[Maria Eagle]

I am not sure that the hon. Gentleman listened to what I said earlier, but I have already said that I did not think it was right to tie such increases into specific improvements on specific lines, which is what happened in that case, and I have said that before. Perhaps if he listens a little more carefully, he will not have to intervene. I said that I did not think that was right, but the current Government—

[Dr Huppert]

Will the hon. Lady give way?

[Maria Eagle]

I am in the middle of answering the hon. Member for Gillingham and Rainham (Rehman Chishti).

The current Government are proposing an across-the-board increase of RPI plus 3% on everyone, whether or not there is any improvement in investment or any increase in service. At a time like this, when people’s incomes are being squeezed badly, it is not easy for them to cope with that. We should not continue with those levels of increases.

[Mark Reckless]

rose—

[Dr Huppert]

rose—

[Maria Eagle]

I will give way to the hon. Member for Cambridge (Dr Huppert), because he is clearly very keen.

[Dr Huppert]

I thank the shadow Secretary of State for finally giving way—it has taken some effort. While she is in the mood for apologising for errors made under the last Government, will she apologise for the fact that rail fares went up in cash terms by 66% in that time? That had a huge impact on people across the entire country and made fares completely unaffordable for many people.

[Maria Eagle]

The hon. Gentleman, who purports to be the transport spokesman for the Liberal Democrats, even though the Liberal Democrats have a Transport Minister in the Government—the Under-Secretary of State for Transport, the hon. Member for Lewes—is going round the country saying that his party is in favour of cutting fares, when he and his hon. and right hon. Friends are voting for Government measures that increase them. If he starts to apologise for some of that, I am sure we can sit down and talk about mutual apologies that may or may not be possible.

[Dr Huppert]

rose—

[Maria Eagle]

I will not give way to the hon. Gentleman again.

As the Secretary of State’s predecessor rightly said, “If you don’t ask, you don’t get.” That is the first thing that he can do in his first Cabinet meeting—well, not his first, but his first in this role. [Interruption.] Oh yes, the Chief Whip attended, but this time he will be able to vote, if there are any votes—there are occasionally votes at Cabinet, although perhaps not in this one.

We now know that many Government Members agree with us on this issue, because they have been busy telling their local newspapers that the fare rises are too high. The hon. Member—soon to be the right hon. Member—for Sevenoaks (Michael Fallon), who is now the Minister of State at the Department for Business, Innovation and Skills and who is, we are told, even now parked in a tank on the lawn of the Business Secretary, has gone so far as to present a petition to the House on the issue. He writes on his website:

“At a time of rising energy bills, and high inflation more generally, many of my constituents are having to make painful savings in their household budgets. Southeastern need to understand this and reduce the size of the rail fare increase”.

Our motion today would not only prevent train companies from imposing the eye-watering fare rises that the Business Minister rightly opposes; it would also cap his constituents’ fare rises at 1% above inflation.

The hon. Member for Harlow (Robert Halfon) has told his local newspaper:

“Harlow people are already struggling to make ends meet against a backdrop of rising petrol prices and wage freezes…They cannot be expected to pay massive rises in rail fares on top.”

The hon. Member for Chatham and Aylesford (Tracey Crouch) told her local paper:

“At a time when household budgets are stretched, the Government and Southeastern have a responsibility to ensure the cost of rail travel remains affordable. I will continue to make representations on behalf of my constituents”.

Good for her! Her neighbour, the hon. Member for Rochester and Strood (Mark Reckless), has said:

“What I have found with prices going up this fast is that many of my constituents have to get up at 5 am or 6 am to take a coach to London because they cannot afford to take the train whereas others have been priced out completely because they are spending almost all their take-home pay on a season ticket. I just think that is counter-productive. I think it is a question of fairness to people who are working hard and just doing their best.”

I agree with all those hon. Members’ representations.

I should also like to quote one or two Liberal Democrats. It will not be a great shock to the House to learn that many Lib Dem MPs have been sending out press releases to their local papers opposing their own Government—we all know that they do that. The hon. Member for Leeds North West (Greg Mulholland), who is not in his place, has said:

“I am very concerned at the proposed fare rises…At a time when the cost of living remains a big issue it’s not acceptable to ask rail users to pick up extra costs”.

The hon. Member for Manchester, Withington (Mr Leech) has actually claimed credit for last year’s U-turn, saying:

“I hope George Osborne and the Treasury will cut the train commuter some slack in the upcoming budget...Last year, Nick Clegg and Danny Alexander negotiated a RPI+1% fare rise for 2012, much lower than planned by some Conservatives. I hope they will do at least as much this budget.”

That is not very collegiate, but it is rather typical. I must not leave out the hon. Member for Cambridge, because he gets upset if I do. I can reassure the House that he has also spoken out, in his rather confusing role as co-chair of the Lib Dem transport committee. He has assured his local paper:

“I wrote to the Secretary of State for Transport earlier this summer to remind her of Liberal Democrat policy, and highlight our opposition to the RPI+3% rate.”

Putting out a press release is one thing—and it can be useful—but I hope that Members will follow their words up with action this afternoon and vote for this very straightforward motion, which proposes that the cap on annual fare rises should go back to the 1% above inflation cap that existed before the last election—which even the Chancellor conceded was right last year when he performed a U-turn—and that we should strictly enforce that cap, it being the will of the House, and not allow private train companies to add up to another 5% on to some fares. The result would be clear. Instead of 11.2% being the highest possible fare increase in January, no fare would rise by more than 1% above inflation. That would benefit our constituents considerably.

If we do not act, passengers are likely to face three years of double-digit fare rises on some routes, and many ticket prices will have risen by a third during this Parliament. We have reached a point at which increasing numbers of households are paying more on their season ticket just to get to work than on their mortgage or rent payments. For too long, Governments have let the train companies get away with treating passengers in a way that would not be permitted in other industries.

[Sir Tony Baldry (Banbury) (Con)]

Will the hon. Lady give way?

[Maria Eagle]

I am just coming to the end of my remarks; I think I have spoken for an appropriate length of time.

Today, we in this House have a chance to say, on behalf of our constituents, that enough is enough. I urge the House to put aside party differences and vote for the motion. It is something that we all agree on. Let us deliver for our constituents the guarantee that their rail fares will not rise by more than a strict annual cap of 1% above inflation.

13:15

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

Before I address the motion, I would just like to tell the House what a great honour and privilege it is to return to the Dispatch Box in a proper speaking role after some 18 years, although I have to say to the hon. Member for Garston and Halewood (Maria Eagle) that I had not expected to be making my first speech as Transport Secretary quite so soon. When the Opposition Chief Whip informed me on Monday evening that there was to be a transport debate today, I thought that this would be either an opportunity or a great problem. I shall not decide which until I have sat down. I thank the hon. Lady for her warm welcome. I shall certainly consider some of the points that she raised in her speech, but I might need to take a little more time to do that, rather than responding to them all immediately this afternoon.

[Chris Bryant (Rhondda) (Lab)]

Will the Secretary of State give way?

[Mr McLoughlin]

I am going to regret this!

[Chris Bryant]

I, too, congratulate the right hon. Gentleman on his new post. As he knows, I have always thought of him as the General von Klinkerhoffen of the Government—but only in that he is much nicer than his party allegiance. May I add one thing to the list of things he should worry about? It is that we often think of commuters as wealthy people going from the commuter districts outside London to their jobs in banks, yet many in my constituency are people who are on the minimum wage. For them, the £5.10 or £5.20 a day that it would cost them to go to work can sometimes be prohibitive. Will he work closely with the Department for Work and Pensions to ensure that such people have a real opportunity to work?

[Mr McLoughlin]

I thank the hon. Gentleman for his intervention. I well accept that a lot of people who commute are on very low wages, and that their transport costs account for a very large part of their income. We do need to bear that in mind. The hon. Gentleman is, however, supporting a motion today that would remove the flexibility of the rail companies to adjust rail fares, which is something that the Welsh Assembly—which his own party runs—is not prepared to do.

[Sir Tony Baldry]

May I too congratulate my right hon. Friend and welcome him to his new post? He was a much-respected Chief Whip, and I am sure that he will perform this task very well. Was he not surprised that the hon. Member for Garston and Halewood (Maria Eagle) managed to get through her whole speech without making a single reference to Sir Roy McNulty’s report? It was as though his review had never taken place. An important part of the equation is surely the cost of the railway system, and Sir Roy’s independent report found that the system that we inherited from the last Government was so inefficient and expensive that we would have to reduce its costs by 40% to run a service comparable to those in France, Germany and Holland that the hon. Lady seemed to be disparaging.

[Mr McLoughlin]

I am grateful to my hon. Friend. I intend to come to that point later in my speech, as he can well imagine.

It is a great privilege to serve as a Secretary of State in this Government, and it is a task that I am incredibly proud to perform. I should like to take this opportunity to pay tribute to the diligence and skill of my predecessor, my right hon. Friend the Member for Putney (Justine Greening). She gave the go-ahead for the high-speed rail link—a new national rail network that will be crucial for keeping Britain moving and vital for growing our economy.

As a regular rail user myself, I know how concerned people are about rail fares. That is a fact that I fully understand and take seriously, but to do justice to this debate, it is vital to grasp the wider challenges that the Government face if we are to make our railways more efficient, more effective and more affordable. From day one in office, our priority has been to tackle the fiscal deficit that we inherited, and to put in place measures to rebalance our economy, get people back to work and boost growth.

The railways have, and will continue to have, a crucial role to play in that process. Not only do they provide the arteries through which the lifeblood of commerce flows, connecting key cities and markets, and linking communities with jobs but they receive a significant amount of funding from the state—more than £3 billion a year. It was absolutely clear when the coalition came to power in 2010 that the level of taxpayer and fare payer support for the railways had soared under the last Government, yet passengers had seen little reward for that investment. In short, the railways were providing poor value for money. We did not inherit just a budget deficit; we also inherited an infrastructure deficit—one that, left unaddressed, would mean a long-term drag on our economy. This infrastructure deficit was particularly acute on the railways.

[Mark Lazarowicz]

The Secretary of State mentioned that he was a regular rail user—I presume on the west coast main line, with which he will be familiar in any event. He said that the money invested by the last Labour Government did not lead to any obvious benefits for passengers. How does he think the investment in the west coast main line was paid for?

[Mr McLoughlin]

I am talking about the overall structure. My train service is East Midlands Trains, not the west coast main line. I look forward to gaining more knowledge of many more railway lines in due course.

[Ian Lucas (Wrexham) (Lab)]

Will the right hon. Gentleman give way?

[Mr McLoughlin]

Briefly.

[Ian Lucas]

I congratulate the right hon. Gentleman on his move to the Department for Transport. Does he believe that his rail journey improved or got worse between 1997 and 2012?

[Mr McLoughlin]

I shall come on to some of the things we are going to do to improve the railway line that I use, which were announced before I became Secretary of State. I am very pleased about them, one of which is electrification. The last Government had a particularly poor record on that. There was a change in the franchise owners during the period of the last Government and certain changes were made to the service on that line.

Soaring demand meant that our ageing rail network was struggling to cope. There are now many more people travelling on the railways than at any time since 1929, but on a much smaller system. What does that mean? It means more overcrowding, more standing on trains, and rail consumers demanding a better service. We had to find a way to invest in the railway to support the economic recovery and to deliver the quality of service that passengers have the right to expect. That was the reality we faced, and we are meeting it head on by investing in the biggest rail modernisation programme since the Victorian era, while at the same time reforming the railways and reducing costs.

[Maria Eagle]

Does the right hon. Gentleman accept that during this Parliament and this spending review period, his Government have cut investment in the rail industry? Yes, they have announced a lot of investment for the next Parliament, in control period 5, which will go ahead some time in the future, but in this Parliament investment and infrastructure have been cut.

[Mr McLoughlin]

I was just coming on to say that this July, we announced £16 billion of public support for the existing rail network between 2014 and 2019—I expect 2014 to be during this particular Parliament—which will support over £9 billion of enhancements, meaning more services, more seats and more capacity, especially for commuters to our largest cities. The tap cannot simply be turned on as far as the rail industry is concerned. Passengers will also benefit from the completion of the northern hub in Manchester, £240 million of investment in capacity and connection improvements on the east coast main line, and a further £300 million for high-value, small-scale schemes in other parts of the country.

We are delivering a rolling programme of rail electrification on the Great Western main line to Swansea, on the valley lines into Cardiff and on the trans-Pennine route connecting Liverpool, Manchester, Leeds and York. We are creating a new “electric spine” for freight and passenger services stretching from the south coast to the east and west midlands and south Yorkshire.

[Dr Huppert]

I congratulate the Secretary of State on his new post. How confident is he that during this Parliament this Government will be able to electrify more of the railways than the nine miles that were managed in three previous Parliaments?

[Mr McLoughlin]

The hon. Gentleman must not underestimate the achievements of the last Government. He said that they electrified nine miles, but he is wrong; they electrified 13 miles, and I shall come to that a little later in my speech. I shall also come on to announce the electrification that we intend to carry out.

[Mrs Main]

I offer many congratulations to my right hon. Friend on his new and challenging post. Does he share my amazement that Labour Members ignore the fact that Thameslink 2000, which serves my constituency, was kept on the buffers for seven years while they dithered, thereby denying the infrastructure improvements of extended platforms and longer trains, which would have made a huge difference to commuters yet have gone ahead only recently?

[Mr McLoughlin]

My hon. Friend is a tremendous advocate for the many commuters in her constituency who rely on this service. I hope they have already seen some improvements and will see further improvements as time goes on.

Electrification will not only deliver new fleets of cleaner and more environmentally friendly trains but will reduce the long-term costs of running the railways. The hon. Member for Cambridge (Dr Huppert) was just a little ahead in the timing of his question; the next part of my speech will put the record straight. I always try to be accurate. While in 13 years the previous Government electrified just 10 miles of railway—I got the figure wrong, too!—between Crewe and Kidsgrove, which is an important part of the railway network but not too widespread, we have set out plans for over 850 miles of electrification and investment of over £1 billion. It does not stop there, as we have approved a £4.5 billion contract to build a new generation of inter-city trains at a purpose-built factory in County Durham, creating 730 skilled jobs and a further 200 during construction. We are procuring around 1,200 new railway carriages for the Thameslink line and, with Transport for London, we are working on the procurement of new trains for Crossrail.

There is a lot more to do, but let me be clear. We are able to fund this massive programme to build a railway fit for the 21st century only because we have taken tough but correct decisions to cut spending elsewhere, redirecting our resources to boost growth and to get our economy moving. Of course, when it comes to resources, when we invest in our rail network, fare revenues are crucial in helping to fund the massive upgrade programme we are delivering. In fact, the previous Government set out plans to increase the share of rail funding paid by passengers. The alternative for us in 2010 would have been to slash investment. This would have been the wrong answer for the long-term economic future of this country and, indeed, for rail users themselves.

[Julie Hilling (Bolton West) (Lab)]

I join others in welcoming the right hon. Gentleman to his post. He talks about the passenger paying, but I could have a week in Benidorm with £80 spending money for the cost of my return travel between Wigan and Euston. One of the right hon. Gentleman’s predecessors, the right hon. Member for Runnymede and Weybridge (Mr Hammond), said he thought that the railways were already a rich man’s toy. Does the Secretary of State agree with that? If not, how is he going to enable ordinary people to use the railways—or should they just go to Benidorm instead?

[Mr McLoughlin]

It sounds as if the hon. Lady knows more about Benidorm than I do. I think there are a number of anomalies in ticket fares. I see them on the train service I use, in that it can cost £170 to use one train, but a train 20 minutes later is a lot cheaper. We need seriously to try to address a number of these problems and to look at how the fares and fare structures used by the rail industry are implemented. I do not accept that everything is fine and fair. In certain areas, consumers have strong cases to make; we should look at them, and I will do so.

[Iain Stewart (Milton Keynes South) (Con)]

Will my right hon. Friend give way?

[Mr McLoughlin]

Yes, I give way to a member of the Transport Select Committee.

[Iain Stewart]

I, too, congratulate my right hon. Friend. He makes an important point about reviewing the whole ticketing strategy. His predecessor announced a consultation on reviewing ticketing, and one proposal that will directly benefit my constituents is a plan to introduce a discounted ticket for passengers who travel frequently but not often enough to warrant a season ticket. There are proposals like this that will cut the cost of using the railways for many of our constituents.

[Mr McLoughlin]

I look forward to working closely with my hon. Friend and to discussing that issue with him.

[Tracey Crouch (Chatham and Aylesford) (Con)]

I am sure that I shall like my right hon. Friend better in his new role than in his last.

The shadow Secretary of State was kind enough to quote accurately comments that I made to my local newspaper reflecting my constituents’ concern about rail fare increases. I said that I would continue to make representations on the matter. Rather than succumbing to the political opportunism displayed by the Opposition, who imposed RPI plus 3% uniquely on Southeastern commuters, will my right hon. Friend meet me, and fellow Kent Members, to engage in a substantive conversation about rail fares and services for our constituents?

[Mr McLoughlin]

I should be delighted to meet my hon. Friend and the colleagues whom she wishes to bring to see me. As I have said, a huge number of people rely on commuting, particularly in areas such as Kent, and that is very expensive for them. I shall be more than happy to arrange a meeting in the not-too-distant future.

[Mr Sheerman]

Will the Secretary of State give way?

[Mr McLoughlin]

I am slightly conscious of the time.

[Mr Sheerman]

May I just apologise quickly?

[Mr McLoughlin]

There is a first time for everything. In fact, I think the hon. Gentleman has already apologised, but perhaps he now wants to say something else.

[Mr Sheerman]

I wanted to apologise for suggesting earlier that the Secretary of State was a Yorkshireman, but may I also make a serious point? People in my constituency of Huddersfield, and in west Yorkshire generally, are finding it increasingly difficult to afford the fares for journeys to this city, where much of their business lies.

[Mr McLoughlin]

I am sorry. I missed the point that the hon. Gentleman was making.

[Mr Sheerman]

Business people in Yorkshire have to come here to do business, but the rate at which the fares are increasing is making it very difficult for them to afford to do so.

[Mr McLoughlin]

I think I have already acknowledged that several times in my speech, but I do want to look into it, although the amount that we are investing in the railways should also be borne in mind. We need to address people’s concerns, but there is no easy answer. If we had inherited the economic scenario that the last Government inherited, many of the changes and difficult decisions that we are having to make in trying to rebalance the economy would not have been necessary. What the hon. Gentleman has said comes ill from a member of the party that spent all the money, when the present Government are trying to restore the economy to its previous state and balance the books.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

Will the Secretary of State give way?

[Mr McLoughlin]

I must make some progress, but I will give way very briefly.

[Mr Brown]

I congratulate the Secretary of State on his appointment. Some passengers undoubtedly enjoy the benefits of a railcard, but what does he think about train operating companies that are seeking to tighten the restrictions, thereby preventing people from travelling early in the day or late in the afternoon?

[Mr McLoughlin]

We are considering that whole question in our fares and ticketing review. When there are announcements to be made, we will make them in the House, and we will be answerable for them in the House if they are our responsibility. However, I think that the situation in Scotland has quite a bit to do with the Scottish Government.

[Jim McGovern (Dundee West) (Lab)]

I welcome the Secretary of State to his new position. He said that he would try to iron out some of the anomalies, and I hope that he will deal with this one. If I want to travel from my constituency in Dundee to Glasgow, it is cheaper for me to buy a ticket from Dundee to Perth and another from Perth to Glasgow than to buy one from Dundee to Glasgow, and I do not need to get off the train at any point.

[Mr McLoughlin]

I do not think that we have changed the position in the last few years, and I do not know what the last Government did in 13 years. Again, I think that the issue raised by the hon. Gentleman has more to do with the Scottish Government than with us, but we will look at it nevertheless.

As previous Governments have shown, simply spending more on the railways does not necessarily bring value for money. For far too long the railways have relied on ever-increasing public subsidy and ever-rising rail fares. Enough is enough. If we are to invest in rail, we must ensure that we are getting value for money. That echoes the point made earlier by my hon. Friend the Member for Banbury (Sir Tony Baldry).

We have set out a comprehensive programme of rail reform to tackle costs and waste. That principle was at the heart of the Command Paper that my predecessor published last March, in which we explained how we wanted the industry to tackle the £3.5 billion annual efficiency gap identified by Sir Roy McNulty in his study of value for money on the railways.

[Caroline Lucas]

Will the Secretary of State give way?

[Mr McLoughlin]

I should like to make a bit of progress first.

The best way of securing long-term value for money is to ensure that the rail industry plays its part in delivering lower costs and sustainable railways. That will require all those who are responsible for track and trains to work more closely together. It will require a more responsible approach to pay and modern ways of working among all who are employed in the industry, from the platform to the boardroom. It will require longer franchises, providing greater flexibility, longer contracts and a sharper focus on cost, and it will require smart technology to reduce the cost of selling tickets. We are challenging the industry to deliver efficiencies that will put our railways on a par with the best in the world, and we will pursue the delivery of those savings with the Rail Delivery Group, train operators and others. Let me address the main point made in the motion by saying that our relentless focus on efficiency will help us to put an end to above-inflation increases at the earliest opportunity.

[Caroline Lucas]

I congratulate the Secretary of State on his new post. I wonder what he would say to one of my constituents who told me a few days ago that he had had to give up his job in London because he could no longer afford the rail fare. How is the Government’s policy of encouraging people to look further afield for jobs consistent with pricing them off the railways that could enable them to do so?

[Mr McLoughlin]

More people are using the railways now than at any time since 1929, on a lesser network. However, the hon. Lady is right to express concern. I too am concerned about people who are having to spend such a large proportion of their income on transport. I hope that we shall be able to look at that, and that in due course we shall see improvements in some areas.

[Mrs Main]

Will my right hon. Friend give way?

[Mr McLoughlin]

For the last time.

[Mrs Main]

One thing that has not been mentioned so far is the cost of parking. Many people feel that the cost of their rail journeys has been rising in a reasonable fashion, in the sense that the increases are predictable, but the cost of car parking at railway stations has leapt, and the time for off-peak parking has been pushed back to as late as four or five o’clock. The fact that the cost of parking at stations has not been addressed constitutes a flaw in the debate.

[Mr McLoughlin]

I am told that that is a matter for the rail companies, but I understand the concern about car parking, which, I believe, can be extremely expensive in certain areas.

The hon. Member for Garston and Halewood has asked specifically for an opportunity to address the cap on regulated fares, and the way in which train operators use what are known as flex fares, which the motion describes as “that strict limit”. As I said earlier, I do not believe that the current fares structure—which we inherited—is perfect, and that is why we are conducting a fares and ticketing review. The key issue today is the “flex” policy, which was introduced by the last Labour Government. The cap on regulated fares is implemented by train operators as an average across a “basket” of different fares. That flexibility allows some fares to be increased by up to 5% more than the average, provided that other price increases are kept below the average. It means that operators can manage demand more effectively and efficiently, which should achieve better value for money for fare payers and taxpayers overall. It also allows operators to keep fares in a logical structure and to address anomalies over time.

Let me stress again that when operators increase some fares by the maximum permitted, other fares must increase by much less or even be held flat to comply with the regulated average. As I have said, the system was introduced by the last Government.

[Heidi Alexander (Lewisham East) (Lab)]

Will the Secretary of State give way?

[Mr McLoughlin]

I will, for the last time.

[Heidi Alexander]

I congratulate the Secretary of State on his new post. One of the anomalies to which he has referred is the fact that fares in my constituency in south-east London are not fully integrated with the Transport for London price structure, and people pay more for a journey on the rail network than they would pay for a comparable journey on the TfL network. What are his views on that issue, and how does he plan to resolve it?

[Mr McLoughlin]

I look forward to reading the letter that I shall no doubt receive from the hon. Lady, and I will give a considered response then, as I will have had an opportunity to examine the background of these matters.

[Alison McGovern (Wirral South) (Lab)]

I welcome the new Secretary of State to his position. When he is familiarising himself with his new brief, may I ask him to take a look at the Wrexham to Bidston line? I raised that project with his predecessor on a number of occasions, and I think he will find it a fascinating subject.

[Mr McLoughlin]

Members will have plenty of opportunities to question me over the coming months, and after the hon. Lady has no doubt written to me about this line, I will perhaps have a little more to say about it—and I refer her to the very good line between Derby and Matlock.

We are building a modern railway network in Britain —one that plays its full part in connecting our communities, supporting our economy and safeguarding our environment. We are delivering this crucial work against the backdrop of an inherited debt and the most testing economic times for a generation. But investment by investment, upgrade by upgrade, project by project, we are making real and lasting progress. As we do, at the forefront of our thinking and the centre of our plans are the people and businesses that use, depend on and fund this country’s railways.

I am acutely aware of the concerns that passengers have about fares. That is why we are committed to ending above-inflation increases as soon as we can—once savings are achieved and the wider fiscal situation improves. It is also why we continue to keep the regulated caps under review. Every choice we make and every decision we take is about giving passengers the best railways and getting passengers the best deal. That is what the Government intend to do, and we are undertaking that task.

13:39

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

First, may I apologise in advance if I am unable to return to the Chamber in time for the beginning of the concluding speeches to this debate? I have an urgent meeting at 3 o’clock in the Scotland Office that I am committed to attend, but I hope to be able to return in time.

I am grateful for this opportunity to contribute to the debate, and I shall focus on fares on the cross-border services between London and Scotland. One of the final parts of the west coast main line into Glasgow passes through Lanarkshire and runs through my constituency. I use that rail service reasonably frequently—although perhaps not as frequently as I should—and many of my constituents also use it and other rail services, or work for the companies that currently operate them.

My Front-Bench colleague discussed some of the concerns about this summer’s west coast main line franchise announcement. I share those concerns. There are important unanswered questions about the process and the award, and there is a strong case for the issues to be fully examined. While there may not be an immediate negative consequence, there has been confusion on the east coast and similar confusion could arise on the west coast, which would not be good for the people working on the railways or for passengers on the west coast main line. Some of the commitments that have been made appear to be difficult to deliver, and some of the bid’s underlying assumptions require, at the very least, further consideration. I appreciate that the Secretary of State and some of his ministerial team are new to their posts, but I hope that they will bear these important points in mind.

[Gloria De Piero (Ashfield) (Lab)]

Regional railways are very important for former mining towns such as the one I represent. Many of my constituents travel into Nottingham for work. It would be terrible, and very short-sighted, if fares were allowed to rise to such a level that people thought it simply was not worth being in work and that it would be better if they were on the dole.

[Tom Greatrex]

My hon. Friend makes a crucial point. I am sure the situation she describes arises in many constituencies where people travel into a larger town or city for work. The cost of that travel can make the difference between the work being worth doing or not. From other parts of the Government we hear talk about encouraging people into work and trying to find ways of getting people into employment in what are very difficult economic circumstances. If rail fares rise too high, we will fail to achieve that important objective. Although the issue of local fares is a devolved matter and many of the journeys my constituents make are local, many of them also use the west coast main line, and some of their journeys may cross the border, where fares are not a matter for the Edinburgh Government.

Another important topic is the restrictions on the use of railcards. Some of the headline commitments in the franchise bids are about reducing or keeping controls on fares. Ambiguity arises, however, when questions are asked about restrictions on the use of railcards, such as the times when they are valid.

[Jenny Chapman (Darlington) (Lab)]

I represent Darlington, which is the birthplace of the railways, and, as has been said, people are starting to find that fares are prohibitively high. Clarity on off-peak and peak-time fares is becoming a real issue. It is often unclear when a ticket is valid and what the price of the journey will be. That is a huge concern to my constituents.

[Tom Greatrex]

My hon. Friend makes an important point. The times at which peak and off-peak fares are available can vary greatly between different parts of the country, which can cause immense confusion.

My hon. Friend the Member for Dundee West (Jim McGovern) made the point that people sometimes find that buying separate tickets for different legs of their journey works out cheaper than buying a single ticket. All such issues add complications, which does not help to achieve our objective of encouraging people to use the railways as much as possible.

If the complications become so great that people choose to travel not by rail but by a different mode of transport, that could also make some of the Government’s other commitments and policies harder to achieve. I say that as someone who travels on the west coast main line between Scotland and London. Many of the people who get on the same train as me—especially business travellers on a Monday morning—have in the past frequently travelled to London by plane. They make the point that the investment in the west coast main line over recent years means that now, if they catch the right train, they can complete their journey almost as quickly as they could by air, when they take into account the time taken in travelling to and waiting at airports at both ends of the journey. That has had a huge impact on the use of the train service. The investment has, therefore, been very welcome. Now, however, some of the peak-time fares are becoming more expensive than air fares and, especially as businesses are under increasing financial pressure at present, many business travellers are switching back to air.

The Secretary of State will find that another important part of his portfolio is aviation capacity. As this recent investment has made rail travel more attractive and almost as fast as air travel, it does not make sense that cost increases could now lead to people reverting to air travel. This is also an important issue because these cost increases are having an impact on businesses that are under increasing financial pressure because of the general difficult economic circumstances.

[Katy Clark (North Ayrshire and Arran) (Lab)]

On the question of complex rail fares, does my hon. Friend agree that the Government’s policy of closing ticket offices and reducing their opening hours makes it even more difficult for people? Frankly, the machines that are available at railway stations make it practically impossible to know what is the cheapest fare.

[Tom Greatrex]

My hon. Friend makes another important point, which I hope that the Secretary of State will consider as he reads himself into his brief. My experience of getting from airports to stations, particularly when getting a train from Gatwick into London, is that the ticket machines are quite hard to navigate. It is difficult to find the cheaper ticket, which involves travelling on the non-Gatwick Express service. That is just one example that shows that how the ticket machines are set up seems to drive people towards the more expensive fares. I am not sure how that is regulated, but it might be worth considering in the round along with all the other issues.

[Alison McGovern]

Does my hon. Friend agree that that must be considered as part of the Government’s review? The infrequent business user’s train use is limited by such high complexity levels.

[Tom Greatrex]

I agree wholeheartedly with my hon. Friend. I was heartened to hear the Secretary of State’s comments about considering those issues as part of the review and it is very important that it covers all aspects of the matter. The problem is not just the ticket price but access to the tickets and the issues pointed out by my hon. Friend.

We quite rightly hear a lot about the pressure many people are under and about how their incomes are being squeezed. If rail fares become prohibitive at such a time, either for people trying to get to work or for business users, that will mean that people use forms of transport that do more damage to the environment and that restrict aviation capacity. It is very important that the Government carefully consider the levels at which fares can be increased, because although I do not disagree with the Secretary of State about the need for investment—everybody accepts the need for continued investment in our rail services—if the burden is placed too heavily on passengers during this time of economic difficulty, people will be driven away from using the railways. Nobody wants to see that.

I sincerely hope that the Government will consider this straightforward and fairly simple motion. It is about trying to help people at this particularly difficult time and trying to avoid other policy objectives not being met because the fares are too expensive. I know that the Secretary of State’s predecessor said last summer that she was talking to the Chancellor and trying to find a way to limit fares further. It became clear over a relatively short time that some of the Chancellor’s other decisions in the last Budget were not viable or sensible and it would do the Government a lot of good if they reconsidered the decision on fares, which is in danger of having a severe adverse impact on many people across the UK.

13:53

[Mr Brian Binley (Northampton South) (Con)]

It is a pleasure to follow the hon. Member for Rutherglen and Hamilton West (Tom Greatrex), who delivered a sensible speech and made some very sensible points. I had sympathy with many of them. While we are in a congratulatory mood, I also congratulate the Secretary of State. He is held in very high regard and with great affection in the House and people will be delighted to see him emerge from the Whips Office into slightly greater glory in the months to come. I hope that he might be kind enough to pass on my good wishes to his Minister of State, my right hon. Friend the Member for Chelmsford (Mr Burns), who is no longer in his place. They make a good team. I am not sure who will look after whom, but we will see as the months unfold. Finally, will the Secretary of State pass on my good wishes to his predecessor, who was especially kind to Northampton? As he will know, she helped to provide the money for a much-needed new station and we remain deeply appreciative.

The debate is a missed opportunity. I understand and have some sympathy with the need for more regulated rail fares. I understand the need to see such regulation as an attempt to put a brake on the sizeable increase in rail fares that started during the Opposition’s period in government and, sadly, continues under this Government, but the truth is that trying to ban train operators from increasing fares beyond a certain point is an unnecessary diversion. The real issue is why the rail industry has not done more to get to grips with cost. Under the previous Government and so far under this Government, it seems to have been accepted that the taxpayer or consumer should finance the rail sector when no attempt has been made to increase efficiency and production and to lower costs. Every business in this country has had to deal with such challenges over the past five years, many of them to great effect, yet the rail industry seems not to be a part of that process.

We have one of the most expensive rail systems in Europe. Why is the rail sector the only privatised sector not to have made progress with cost reduction since its inception as a privatised operation?

[Alison McGovern]

The hon. Gentleman said that we have one of the most expensive rail systems in Europe. Is he talking about the cost per journey? We have much more frequent and dense services than other countries in Europe, but did he take that into account?

[Mr Binley]

I thank the hon. Lady for that question. I am referring to the McNulty report, which her party’s Government put into effect. McNulty made it quite clear that the British rail sector was 28% more expensive than like-for-like rail sectors throughout Europe. If our costs are that high, I hope that the hon. Lady will be as concerned as I am. The alternative is to keep pulling money out of the pockets of the taxpayer or consumer and I want a more productive and efficient rail industry—[Interruption.]

[Katy Clark]

I was not sure whether the hon. Gentleman sat down because he had finished speaking or because he was letting me intervene, and I am grateful that it was the latter. He is making the point that that comparison is like for like, but surely the key point is that Britain has a very different railway system that is based on the private sector, whereas the cheaper train operating systems to which he is comparing it are predominantly in the public sector.

[Mr Binley]

I thank the hon. Lady for that point. She served with great distinction on the Crossrail Bill—two and a quarter years of toil and effort—and she is clearly knowledgeable on rail matters, as I know from that time. My point is that the comparisons are not mine, but McNulty’s. The report was instigated by her Government. If one does not believe what McNulty said, that is a different matter, but it is the most authoritative report we have had on this subject. Rather than bickering about an area on which I am not overly clear, I am willing to accept McNulty as an authoritative response on this issue. The previous Government did too, so we do not need to get too involved in that sort of thing. I want to ask, therefore, why the previous Government—

[Katy Clark]

Will the hon. Gentleman give way again?

[Mr Binley]

Just for you.

[Katy Clark]

I am extremely grateful to the hon. Gentleman, who is a good friend. We have sat on many Committees together. My point is that the comparison is not like for like because the train system in Europe is predominantly public sector. That is why it is cheaper.

[Mr Binley]

Some of the comparisons are with companies that are much more privatised, which is perhaps not the impression that the hon. Lady is trying to give, but that is not the point. The point is that I see McNulty as authoritative and so did her own Government. Therefore, we need not to argue about the review, but to use it to the benefit of our consumers and constituents. We need to put pressure on the rail sector to become more efficient and more productive, and to cut costs. It should not be only the taxpayer and the consumer who have to dip their hand in their pocket.

Let us move on, because I want to ask why the Government have not done more to respond positively to the conclusions of the McNulty review, although I was pleased to hear what the Secretary of State said, which intimated that he would be responding to that review, because Labour in government did not. The Labour Government were pleased to tuck it away in a corner of the office of the Secretary of State for Transport and forget it. That was a missed opportunity, which is rather sad.

The Opposition devised an industry structure that created many of the inefficiencies and costs to which McNulty referred. Let me remind Opposition Members that the spirit of the Railways Act 1993 envisaged a far more flexible franchising arrangement, as well as a less complicated intra-industry interface. Under the original arrangements, fares regulation involved a cap below inflation, not above it. If we want to squeeze inefficiency out of a sector, we should not give it price increases above the rate of inflation. That is crazy.

In office, Labour created an additional, unnecessary bureaucracy in the industry and made empty gestures towards a proper strategy. Today’s motion does the same—Labour is continuing in the same vein, which I find rather sad, because I have great respect for the hon. Member for Garston and Halewood (Maria Eagle), the Opposition spokesman. She has a great deal to offer in this area, and some of her remarks suggest that she is willing to make that contribution. I see some connection between those on the two Front Benches, to the benefit of our consumers, and I welcome her comments.

The question is, who should pay for our railways and what can we do to handle the costs? The Government policy that, progressively, passengers should pay a larger share of the cost and taxpayers less, is understandable. I do not want a subsidised, nationalised railway in another form. That is not what I seek, so I understand that view, but I want a Government who ensure that the industry’s unit costs should decline year by year over time. Cost increases below the rate of inflation will do more to impact on that than simply saying again, “You can have more than our consumers and our constituents have year by year in their pay packets.” That will result in costs rising inexorably and people being driven off the railways. None of us wants that.

The McNulty review demonstrated beyond doubt that our railway system is one of the most expensive around and that the competitiveness of the railways as against other transport modes is weak. A recent survey in The Daily Telegraph found that travelling by rail on some routes can cost more than catching a flight. That is cloud cuckoo land. According to the research, it was more expensive to take a train on 50% of popular routes than to fly, including travelling from London to Scotland. That does not make sense.

It has been a thrust of Government policy to encourage more people to use railways. I welcome that, as do many of my constituents, yet the laws of economics dictate that an increase in relative prices will depress demand. That is not a difficult formula to grasp, work out and understand, but the impact on those who use the railways to get to work is particularly bad and particularly expensive.

The situation facing my commuters in Northampton is especially enlightening and in line with many of the comments made during this welcome debate. Northampton is set to expand by more than 56,000 houses by 2026. We shall see whether that happens, because we all know that the construction industry is depressed, but that was the target of the previous Government and it remains, to all intents and purposes, the target of this Government. It really means that we are trying to get out of the south-east and London people who work in that area but cannot afford housing in it, yet what are we doing? The price of an annual season ticket from Northampton to London is £4,756 without the new increase, which will rise to £5,628 for those who need to use the underground. Add an annual season ticket for parking of £815 and we reach more than £6,000. For somebody on £30,000 with a disposable income of £24,000, that is 25% of their disposable income. It just does not make sense.

If we want to move people who work in London and the south-east to areas with less-high-cost housing, we must understand that we need a more competitive rail industry with lower pricing, not higher pricing above the rate of inflation. That is the point that I really want to make.

The regeneration and growth strategies in places such as Northampton risk being derailed, if I might use that term, unless we get this sorted. I make a plea. The Secretary of State understands that point well and knows that commuters from Northampton have already been forced to pay out a quarter of their disposable income, but that price is going up. I know that he understands the problem, which is not only about Northampton. It is about Brighton, Nottingham and other areas that are suffering from the same difficulties.

My constituents have a right to ask what the rail industry is doing to get to grips with its cost base. There are efficiencies that the industry could and should make to bring unit costs down. Staffing levels are unnecessarily high, ticketing and retail arrangements impose operational costs and inefficient deployment of staff, and industrial relations remain problematic and expensive for franchise operators. Therefore, why is the industry not doing more to grasp the challenges of McNulty and why are we not pressurising it to do exactly that? The message from the debate, and from Opposition Front Benchers and Ministers, should be that we have an inefficient rail industry, proved beyond doubt, whose costs have forced up rail prices to the point where they are becoming exclusive to people who can afford to pay and deter many who find it difficult to pay. That is not what we want from our national rail industry.

The industry, the previous Government and this Government have found it too easy to pass on ever more costs to consumers. Neither taxpayers nor hard-pressed rail users should be prepared to tolerate that, and nor should we, but what is needed is not regulation, but a proper focus on efficiency so that the industry takes responsibility for its costs, which every other sector in this country has had to do over the past five years.

I will make one final point. Rail costs are an integral part of business costs because—this point has been made and is relevant—London is the hub of British business, no matter how much we might want to change that, and businesses must travel again and again to London in any given period to sustain and hopefully grow their business. Growth is clearly the only game in town, as we learnt yesterday, and I pray that the Government take on board some of the criticisms that have been made about their growth policies over the past two and a half years. The truth is that unless other Departments see a role in this respect, we will not get the growth we need because costs will keep rising, and the railway costs are an important part of that formula. I know that the Secretary of State understands that and I look forward to him having a massive impact in that regard.

14:10

[Alison McGovern (Wirral South) (Lab)]

It is a pleasure to contribute to what has been an informative debate so far. As a precursor to the few brief points I wish to make, I feel that I should make an admission: I come from a long line of railway people, beginning with my great grandfather and including me, as I have previously worked in the rail industry. I make this confession—that my great grandfather, grandfather and father all worked in the rail industry—not to own up to some kind of strange rail geekery, but rather to explain that I understand some of the practicalities of our rail system and know that changes that seem obvious from the outside can actually be quite complicated and difficult to deliver.

Not least among those considerations is the important fact that the UK rail system was the first in the world. We invented railways, and the impact of that is still with us. The system that we have was designed many years ago, and that brings with it some of the costs. We cannot easily make a like-for-like comparison between our system and those of France or Germany; I am afraid that the UK rail system is just different. We must of course look at ways of reducing costs, but it is not all that straightforward.

[Mr Binley]

Surely the hon. Lady is not rejecting what McNulty said. Surely she accepts the report, authorised by her Front Benchers, which makes a massive contribution to the debate. I hope she does.

[Alison McGovern]

I rarely reject out of hand anybody’s contribution to a debate on so important a subject as the rail industry. I merely make these points as a precursor to what I am about to say. I always feel that we should be cautious in what we say, because I have seen at first hand the complexity of some of the problems we face in running efficiently the kind of extensive rail system we have in Britain.

I want to speak about two things: first, the question of the average fare rise across the fares basket and the restrictions on rises; and secondly, some of the other ticketing issues that rail industry consumers face and what the Government’s ticketing review could consider in order to assist consumers. On the question of the average fare rise versus the cost to travellers of individual fare rises, I have a problem with the Government’s apparent position. The Secretary of State spoke at length only a moment ago about the importance of allowing train companies to raise fares in a way that allows them to maximise yield, but the problem is that that potentially allows significant unfairness. Those whose travel is absolutely necessary for their employment face potentially significant rises, whereas those who have a choice about how they travel are less likely to face those rises. To use an economist’s term, those with an inelastic demand curve—I apologise for my use of jargon, but it may be helpful—are stuck paying ever higher season ticket prices, while those who make up the elastic part of demand can pick and choose, so train companies maximise those yields on what tend to be leisure fares, for journeys that people can choose whether to make. That is the point that many Members across the House are making in different ways.

The problem with allowing average fare rises is that people who cannot choose whether or not to travel by train because they have no practical alternative can be faced with steep rises. The flexibility to do that cannot be allowed. In my view it is not fair. Of course, that is a decision that the Government must make based on the facts. Back in 2009 the then Transport Secretary took a decision, and I support it, because it was about ensuring not only that the train companies were able to do the business they had been contracted to do, but that there was a level of fairness for the travelling passenger.

The Government must think hard about this matter. If consumers who have no practical alternative to travelling by rail are faced with steep fare rises year after year, they will think that it is a significant unfairness to them. Members on both sides of the House have made that point. We need to be clear that this is about different groups of passengers and train companies effectively negotiating their way through to maximise benefits, in some cases for them rather than passengers.

In Merseyside we have quite a specific situation. Travel around the Mersey travel network tends to be more reasonable. However, one of the things we are desperately trying to do is increase job opportunities for people in Merseyside who are perhaps a little further afield. Earlier I cheekily mentioned to the Secretary of State my campaign to improve the Wrexham to Bidston line. It is all about helping people to travel from places in the Wirral and the rest of Merseyside across our city region and further afield, to Manchester or north Wales, to find work wherever it may be.

That is the Government’s stated policy, and they tell us they believe in it. However, with rail fares continuing to increase—my hon. Friend the Member for Rhondda (Chris Bryant) made this point eloquently—those on the lowest incomes will not have an option. They will be unable to take a decision to make what is currently a 90-minute journey from Bebington, Birkenhead, other parts of the Wirral, Southport or the wider Merseyside area to Manchester and other cities, because once they have made that further journey it will be just too expensive. That runs absolutely counter to everything we are trying to achieve to drive up the economic performance of our northern cities. The Government must think carefully about whether their approach to rail fares is not actually against the drive of what they are trying to do across Government.

Secondly, we need to think carefully, perhaps as part of the Government’s ticketing review, about how to ensure that the sale of train tickets and rail travel in general works for the customers, who pay significant amounts. I am particularly interested in how the current set-up harms people working for businesses and organisations who do not use the railways frequently enough to be considered regular or daily users, or even commuters, but do use them frequently enough for there to be a significant impact on their business.

The Government need to pay attention to a couple of aspects. The first is what a peak time is. When I was growing up, it seemed as if we always knew what the peak times were and that they stayed the same year after year. That may be the effect of the rose-tinted glasses of hindsight; perhaps things were different in reality. However, now peak times seem to change all the time.

If a person is travelling on different parts of the network, things can get difficult. For example, if their business, like many businesses in Liverpool and the Merseyside city region area, requires them to go to London one week and Leeds the next, it will be difficult for that person to find out whether the peak times are the same everywhere. The member of staff at Eastham station in my constituency may or may not have in their head the relevant peak times for the ticket.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

Having grown up in Liverpool, I know the hon. Lady’s rail line, Wrexham to Bidston, very well; I had family in the area. However, surely people in today’s world just check online—on nationalrail.co.uk or other sites, which will tell them the pricing of tickets for when they want to travel, including for off-peak, super-advance and similar tickets. I am not sure why there is such a complication.

[Alison McGovern]

I am sure that the hon. Lady is extremely competent at double-checking peak times and the validity of her tickets when she travels, even if she is in a part of the country that she does not know. However, businesses have told me that they find the situation difficult.

The national rail inquiries website is good, but I am not always sure that it is that clear. The better solution would be to print the peak times on the ticket. Surely, in this day and age, we can set up a digital printer that can print the peak times on restricted tickets. People would then not need to make sure that the 3G was working on their phones so that they could look the information up. If it was on the ticket, that would really help people.

[Jenny Chapman]

I completely agree with my hon. Friend. I emphasise that not only digitally incompetent people make the mistake. I am on the east coast main line every week, and there is virtually never a journey when somebody in my carriage does not have to pay an excess surcharge because they have made a mistake to do with the peak, off-peak and super off-peak times.

[Alison McGovern]

“Super off-peak”—there’s an expression. What does it mean? I am a regular train user—a train geek, some have said—but I am not clear when a super off-peak ticket would allow me to travel to Darlington or anywhere else.

We need a more common-sense solution. Although Members of Parliament might have smartphones in their pockets and be able to look things up as they go, a huge number of travellers—particularly older ones, who might be seeking the cheapest possible ticket for understandable reasons—would not be so confident, or would be less likely to go online and look the information up easily.

We need the information to be really clear, not least because there are some strange anomalies in the peak and off-peak scenario, especially in respect of my constituency, which is close to the Welsh border. Services going into Wales have a different peak and off-peak arrangement.

Some years ago, there was a great hurrah when we got a reduction in the number of types of tickets. Now there are supposed to be just four types of train tickets, including advance, off-peak and flexible, so that people can be clear. Personally, I do not think that that works. We need another look. We should either reduce the number of types of tickets or increase the ways in which people can be made aware of the validity conditions of their tickets. The complexity is increased because there are so many vendors of tickets—so many different organisations sell train tickets that the ways in which train ticket validity can be communicated are extremely diverse.

[Mr Mark Spencer (Sherwood) (Con)]

The hon. Lady is making some valid and constructive points about the rail industry. However, the motion that we are debating focuses specifically on the costs to the taxpayer and commuters. Will she get round to talking about the motion rather than about her constructive suggestions for the Department for Transport?

[Alison McGovern]

The costs that passengers face depend on how easily they are able to purchase the most cost-effective ticket for them. Earlier, the Secretary of State said that the whole idea of allowing train companies flexibility was so that they could offer passengers many more lower-price tickets. My point is that lots of people end up paying more because they are confused about the system and have poor access to the information. As my hon. Friend the Member for Darlington (Jenny Chapman) mentioned, all those things imply a cost. If a person has the wrong ticket and is surcharged on the train, that is a greater cost to them. I do not agree with the hon. Gentleman’s assertion that my comments about the types of tickets are irrelevant, because such issues imply a cost. That is why they matter to people.

[Mr Spencer]

Can the hon. Lady estimate the cost saving that printing the peak times on tickets would make to the taxpayer?

[Alison McGovern]

I am good, Mr Speaker, but not that good. I am afraid that I do not have my calculator with me, but I am sure that the issue is worth looking at.

I return to my final thoughts about what needs to be considered in the ticketing review. There is the issue of split ticketing, which has already been mentioned. Those who travel regularly on the railway have a significant advantage over those who do not because they can work out how to split their tickets and save money. If people do that and it is within the rules, good luck to them. However, the situation is confusing. I believe that we should aspire to get more people on to the railways. If tickets are so expensive that people split their tickets to try to make savings, that should be a lesson that we are pricing people away and that the complexity in the rules disadvantages people who do not travel regularly.

To conclude, we need to think about how we can simplify the system. We need to go much further in thinking about the benefits that could be achieved for the travelling public if we thought about the rail system as a whole network. My hon. Friend the Member for Lewisham East (Heidi Alexander) made an extremely valid point about the difficulties of having a Transport for London network right next to a non-TfL part of the network. We need to think about all these things from the perspective of the travelling public rather than that of a complex industry. The rail system will always be complex, but we should make sure that the public-facing part of it is as simple and straightforward as possible.

By and large, we are at risk of curtailing the prospects of employment and economic growth if we do not take seriously the need to make rail fares much more affordable.

14:30

[Dr Julian Huppert (Cambridge) (LD)]

I welcome the new Secretary of State for Transport to his role. I also pay tribute to the work of the former Secretary of State, the right hon. Member for Putney (Justine Greening), and wish her the best of luck in her new, very important role in heading up the Department for International Development. It was a great pleasure to work with her to try to achieve many of the things to which we both aspire. I hope that that work can continue with the new Secretary of State and the other new Transport Ministers, whom I welcome to their roles, and the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), who, I am delighted to say, is still in his role, holding the Department together in so many ways.

One of the issues on which we will have to work together is rail fares, which are quite simply too high. Under the previous Labour Government we saw year-on-year rail fare rises, and we now have one of the most expensive railways in the world. In their 13 years, rail fares went up by an astonishing 66% in cash terms—well above inflation—and in some years there were even greater increases. In 2007, for example, they allowed Stagecoach South West to increase fares by a massive 20%. Fares are too high already, but even now Labour and the Conservatives continue to argue for above-inflation rail fare increases. Although it was good to hear the new Secretary of State say that he aims to end the era of above-inflation increases soon, I hope that it will be very soon.

I will not support the motion because I do not agree with Labour Members that fares should be allowed to go up by more than inflation, which is what their motion says. It calls for a 1% above inflation rail fare cap, whereas Liberal Democrats believe that rail fares are too high already and should be reduced in real terms—that is, capped at less than inflation. We have argued that consistently and will continue to do so. It is time to end the era of above-inflation fare increases for ever.

The last-but-one Transport Secretary—I believe that 24 living people have had that job—instituted a policy of RPI plus 3%, which is well above inflation. Thanks to pressure from Liberal Democrats and others, and arguments won by the former Secretary of State, we managed to reduce that, and fares rose by only 1% above inflation—the average of the Conservative and Lib Dem proposals, and exactly what Labour advocated and advocates today—rather than by 3%. I congratulated the former Secretary of State on successfully winning that argument with the Chancellor last year. I have continued to work with her and other Ministers to try to press it. It was kind of the shadow Secretary of State to read out my words, confirming that I continued to press the former Secretary of State and will keep going with the new Secretary of State. I was delighted when the former Secretary of State announced in August:

“I am keen to see what we can do to keep fares down to something affordable. I will be looking at whether there is a way of doing this in the autumn.”

I am sure that the new Secretary of State, with all his vast experience in the ways of operating within Government and the Whips Office, will prove equally adept at obtaining the funds that are needed so desperately to ensure that price rises are reduced, and I look forward to working with him to achieve that.

We need to look at why fares are so high and how we can reduce the costs of the railways. Why do commuters in Britain suffer some of the most expensive tickets in Europe on some of its most crowded services? We have already heard some comments about this. I pay tribute to the interesting suggestions of the hon. Member for Wirral South (Alison McGovern), particularly on printing more information on tickets. That is an excellent idea and I hope that the Department for Transport will listen to it and take it seriously.

At the fundamental level, the main problem is chronic underinvestment in our railways. Government after Government have invested far too little in our most important transport network. Infrastructure spending has not kept up with demand. That has forced the railways into a downward spiral. An overcrowded, inefficient and unreliable service becomes far more expensive to run. The Office of Rail Regulation estimates that UK railways are up to 40% less efficient than their European counterparts, despite the cost of tickets. This cycle forces up fares and reduces the level of investment available, making for more expensive railways and a less good service.

[Katy Clark]

I agree with the hon. Gentleman, in his capacity as Liberal Democrat spokesperson, that historically there is a massive problem with underinvestment on Britain’s railways, but does he accept that the fragmentation of Britain’s railways and the role of the private companies compounds the problem greatly?

[Dr Huppert]

I thank the hon. Lady for her comments. She has been fairly consistent on this issue, which is not true of all those in her party. I was interested to note that the shadow Secretary of State carefully avoided making commitments on how the railway system is operated. At the time of privatisation, I was concerned about some aspects. For example, if I want to travel from Cambridge to London, I do not care if it is cheaper to go to Liverpool because I am trying to go to London. It may be cheaper—or wonderful—to go to Liverpool, but it is not the trip I wish to make. Having said that, renationalising now would create a huge amount of complexity in trying to move to that new world. I am not persuaded that it would be the right thing to do, but I would be happy to discuss it further with the hon. Lady.

[Caroline Lucas]

rose—

[Dr Huppert]

I will take one last intervention on this point and then make progress.

[Caroline Lucas]

The hon. Gentleman suggests that it would be too difficult to bring the railways back into public ownership. If it were done on a case-by-case basis as the franchises came up, as with the west coast main line right now, there would not be any extra cost to the public purse; in fact, there would be a reduction in cost.

[Dr Huppert]

I thank the hon. Lady for her comments. I congratulate her on her new-found freedom and hope that she will enjoy not having the responsibilities of party leader, with the flexibilities that that brings. I suspect that she will continue to be very influential on future leaders of her party. I am happy to talk to her in more detail about how such an approach would work, but I do not think that it is as trivial as she suggests. We must avoid doing something that seems very good on the face of it but does not deliver an improved rail system. For example, passenger usage numbers went up quite significantly at the point of privatisation. I would not want to do anything that jeopardised the growth in the number of rail passengers, and I am sure that she would not want to do so either.

So what can we do to bring down rail costs? We need a more modern and more efficient system. That is why I was so pleased that despite the huge public deficit and the ongoing problems in the eurozone, this year over £9 billion of investment was announced for our railways in the next five-year period. The Liberal Democrats and I were delighted to endorse that. The coalition has committed to electrifying over 800 miles of railways across the country, as well as to making a huge range of other improvements that will make a huge difference to passengers and to business. I was interested that last year’s autumn statement announced £1.4 billion of investment in our railways because, crucially, that provides £400 million more for railways than for roads. I cannot remember the last time any Government took the correct decision to prioritise expenditure on railways over roads.

As well as investing in lower fares for the future, we have to invest in lower fares now, as the excellent Campaign for Better Transport has pointed out. Over the next year, wages are set to rise by 2%, but fares could go up by as much as 3% above inflation—over 6%. Coalition means that one does not always get everything that one would most like to happen. I was pleased that last year the Government moved to RPI plus 1%, which is exactly in between our position and that of our coalition partners, but I cannot support the Conservative proposals for a rise of 3% above inflation for next year, nor the proposal in the Labour motion for above-inflation rises indefinitely. Liberal Democrats want a rate of RPI minus 1%, with fares coming down in real terms from now on. A lot of that would come from the 30% efficiency savings identified by the McNulty review. A previous Secretary of State announced that that money would be split between investment and money going back to the Treasury. We think that more of it should be used to bring rail fares down now and give the money back to people who pay. We would go further to simplify the fare structure and make it much more transparent, and make rail companies put forward the cheapest fares possible and pay refunds when services are below par. The Government are making some progress on that, but we will continue to push for more.

I am delighted that the Government have taken the difficult decision to invest in railways for the future. That is not an easy thing to do when times are tight; it would have been far better to invest more during the boom years. However, if we punish commuters and other travellers now, it could put people off railways altogether, especially those who are just starting work and those who are hardest hit by the ongoing squeeze. That would send out a terrible message about the affordability of public transport, drive down passenger numbers, and put our network on an unsustainable path. As the Campaign for Better Transport says, we cannot allow our railways to become a rich man’s toy. We need to find an agreement again over rail fares that will last for the rest of this Parliament. I strongly urge the Secretary of State to take up this cause strongly, as his predecessor did.

I hope that the Government will continue to look at the long-term strategic projects that are happening. To restore our railways to their Victorian zenith, we need a Victorian level of investment, and a vision to match. That is why I am delighted that the coalition is not only spending more on the railways than any of its predecessors since the Victorian era but committing to projects such as HS2. I am delighted that that is finally happening, but I am disappointed that, for decades, so many opportunities have been missed for greater improvements like that. Our lack of high-speed rail epitomises what has gone wrong in our railways in recent years, why fares are now so high, and why we face such capacity constraints. For years we watched European neighbours and Asian partners develop and build a comprehensive high-speed railway network. They have extended capacity, supported rail freight, released space on roads and reduced congestion. Despite calls over many years from Liberal Democrats, including my hon. Friend the Under-Secretary, British Governments felt that the cost of doing so was too high. Why invest the money when there is nothing to be gained in the here and now? Transport investments take time to deliver.

Those Governments, over many decades, were wrong. We have waited so long that we absolutely have to go ahead with it now. The west coast main line will have already reached capacity before the new high-speed line can be finished, and the costs now have to be borne in a downturn rather than during the growth years, when money was more plentiful.

It is right that we are putting our railways on a sustainable footing. They need investment and they need it for the long term. The burden cannot be taken by fare payers. Constant, year-on-year fare rises are utterly unsustainable; they will ultimately force people off the railways and bring down revenues. Governments have found it much easier to just patch up old lines and force passengers to deal with the same old problems and pass on the cost of an inefficient system. That was a terrible waste of the boom years.

I am delighted that by the end of this Parliament, Liberal Democrats in government will have made some of the tough decisions to make sure that we will have the efficient and sustainable railway network we deserve, but it has to be affordable to people. I hope that over the coming months we can reach an agreement with our coalition colleagues to prevent an RPI plus 3% rate; otherwise, a long-term investment could be utterly undone as we drive people from our railways irrevocably.

14:41

[John McDonnell (Hayes and Harlington) (Lab)]

The new Secretary of State is not in his place, but I welcome him to his new position. He said that it is somewhat daunting for him to have on his first day a debate about rail fares. All I can say is: wait until we get on to aviation. I look forward to introducing him to some of my friends: Bob Crow at the National Union of Rail, Maritime and Transport Workers, Mick Whelan at ASLEF and Manuel Cortes at the Transport Salaried Staffs Association. On a serious point, I am sure that the trade unions will show a willingness to meet the new Secretary of State on a regular basis and to work together to improve the system. If hon. Members look at many of the submissions received by the Transport Committee in recent years, particularly from the RMT, ASLEF and TSSA, they will see that many of the issues raised and many of the ideas proposed, particularly on ticketing, have been reflected in contributions by Members from all parties to debates, particularly those centring on fares.

The agenda needs to be worked on jointly with the Government. The focus is on fares as the major problem that passengers bear the brunt of. I believe that the role of the House is to protect our constituents—the travelling public—against many of the companies that are profiteering at their expense. The hon. Member for Northampton South (Mr Binley) gave an example of price increases in his constituency, where people are paying anything up to £6,000 or £7,000 a year to commute, and of how that is becoming an impediment to them maintaining work. That is happening right across the country, so I welcome the Government’s ticketing review and refer them to the evidence that the RMT has already provided to successive Transport Committee reviews of ticketing, in which we have emphasised the problems of the complexities of pricing.

On the performance of the companies with regard to their franchises and fares, it is unacceptable that, when a company reneges on its franchise commitments and then seeks to walk away from it, it is then allowed to bid for other franchises around the country. Any company that reneges on its existing franchise should be banned from being able to bid for another and profiteer at the expense of passengers.

[Katy Clark]

Does my hon. Friend agree that this is yet another example in the transport sector of the private sector getting into difficulties and the public taxpayer picking up the purse?

[John McDonnell]

Time and again, when rail franchises have collapsed, they have been brought under public ownership and control. We saw that with the First Capital Connect franchise in the south-east. When that service was in public ownership, it was one of the most efficient and cost-effective services. Unfortunately, the previous Government—this Government pursued this as well—put it out to the private sector again.

The Secretary of State referred in his opening remarks to the investment in electrification and high-speed rail. I wholeheartedly welcome that investment, but I have concerns about the High Speed 2 route. I am particularly concerned about how it has been consulted on. The two-stage approach and the development of the line—the two stages being those that link London to the midlands and to the north—were consulted on separately from the publication of the route to Heathrow, which will affect my constituency. Nevertheless, I welcome the concept of investment in high-speed rail for the future.

Great play has been made in this debate of the issue of reform and its impact on costs and fares. I think that all the rail unions will be willing to meet to discuss the reform of the current system of franchising and of the operation of the railways. I met Roy McNulty on a regular basis. He is a nice old buffer and I do not in any way disparage his commitment or the genuineness of his approach to the review of the railway network, but I have to say that, even under the previous Government, the terms of reference of the McNulty review were specifically limited and that his horizons were, therefore, limited. My hon. Friend the Member for Wirral South (Alison McGovern) has made the point that the comparisons with Europe were hardly straightforward. The comparison was between a franchising system and systems that were largely in the public sector, publicly owned and publicly managed. He was not allowed to look at what public ownership and public control could mean in this country compared with elsewhere. As I have said, the only time that such ownership has occurred here in recent years is when private sector franchises have collapsed and the public sector has taken them over and managed them efficiently and effectively.

The problem with the McNulty review—this has been touched on—is that he envisages, at the most recent estimate, a cut of 20,000 jobs. That will have consequences for services, and many of our constituents have expressed concerns about that.

[Mr Leech]

The unions mentioned the figure of 20,000 job losses to our Transport Committee, but that figure was rejected by others in the industry, who said that the actual numbers were far lower.

[John McDonnell]

The range cited is anything between 5,000 and 20,000. Even if the figure is 5,000, a significant number of jobs will go. In those areas where the general proposals have been translated into concrete ones at the local level, passengers and communities have expressed consternation. For example, the west midlands is trying to translate some of the reductions in staffing into the service itself and faces 80 ticket office closures. That will result in a reduction of staff in the station, so there are concerns about losing the service and about security on platforms and at stations. As a result, a new campaign was launched in August and 40 main stations across the country were picketed by community groups and unions. The campaign was joined by the TUC, the Campaign for Better Transport, Climate Rush and a number of other groups. I issue a warning—perhaps I will send the Secretary of State a note about this—that the campaign was also joined by the women’s institute. Any Minister who takes on the 210,000 members of the women’s institute does so at his or her peril.

This point has been touched on by the hon. Member for Brighton, Pavilion (Caroline Lucas), but there needs to be a discussion about why the fares have increased and why the travelling public have been burdened by those increases over the years. We need to have a debate—I hope that this will happen under the new Secretary of State—about how we should organise our railways. We cannot ignore the understanding and appreciation that now exists of the impact of privatisation. I would welcome a more open debate in which people took a more agnostic approach to privatisation, rather than an ideologically committed one, as has been the case in the past.

I refer Members to the “Rebuilding Rail” report, which came out a couple of months ago. It looked at the value-for-money arguments of the existing franchising mechanism and compared the public subsidy that was put into British Rail with the current subsidy. That independent report found that public subsidy had doubled under the franchising system from £2.4 billion to more than £5.4 billion. From 2005-06 to 2009-10, the average subsidy going into the privatised system was £1.2 billion a year. The total subsidy under privatisation is now nearly £12 billion.

When we have had this argument in the past, a number of Members from all parts of the House have argued that the private companies that operate the franchises are paying a premium and putting money back into the system. I pay tribute to the detailed work of John Stittle, the senior lecturer in accounting at the university of Essex, in the “Rebuilding Rail” report. He looked at how the money has, in effect, been laundered through Network Rail. We have increased the public subsidies to Network Rail, resulting in a reduction in the track operational costs for private companies, which has enabled them to pay the premiums. Under privatisation, there has been a straightforward subsidy from the taxpayer to the private companies to run the system, the passengers have been hit by high fares, and the premiums that the companies pay back to the state, which they extol the virtues of, have actually been paid for by subsidies laundered through Network Rail. That is why we need a re-examination of the whole structure. I hope that we will now have that open debate.

The “Rebuilding Rail” report shows—this is partly reflected by McNulty—that the high costs that are resulting in high fares are a result of the complex structure of the franchising system. It highlights other issues such as the higher interest payments that were paid to keep Network Rail’s debts off the Government balance sheet; the debt write-offs that have occurred under privatisation; and the costs arising from the fragmentation of the system between numerous organisations and subcontractors, which my hon. Friend the Member for North Ayrshire and Arran (Katy Clark) pointed out. The profit margins of the complex tiers of contractors and subcontractors are forcing rail fares up, because of their high costs. The level of the dividend payments to private investors is unacceptable to the travelling public when fares are increasing. As I said, there is an average subsidy of £1.2 billion a year and more than £11 billion of public funds have been paid out so far.

I hope that we will have some new thinking. I hope that we will again look at public ownership as an option. The hon. Member for Brighton, Pavilion demonstrated, although it was dismissed by the Liberal spokesperson, that independent examination of the matter has shown that public ownership could be reintroduced in the railway system at virtually zero cost. As the franchises end, they can be brought back into public ownership, as has happened with two franchises, at no additional cost. Even if the Government are not willing to go as far as the full renationalisation of the railway system, as I would wish, it is open to them to keep at least one franchise in the public sector to be the benchmark against which other franchises are judged. That would enable the system to be evaluated properly and for pressure to be placed on the private sector element of the system.

I hope that with a new Secretary of State and a new Transport team, we can have a constructive dialogue. However, I cannot see a constructive dialogue coming from passengers if they are hit in successive years by fare increases. Although I will vote for the Opposition motion, my view is not just that fares should be frozen or capped, but that the travelling public deserve a cut in fares. Many passengers feel that they are being fleeced, both through increased fares and because they have to pay through their taxes for increased public subsidies while a number of the private companies make unacceptable levels of profit.

Two weeks ago, when the franchising issue broke, Branson, the head of Virgin, expressed his concerns about losing the franchise. One article repeated the quotation from his finance director when the privatisation of the railways first happened: that it was their opportunity literally to print money. That is what many of the private companies have done as a result of the franchising system. I believe that that is obscene, as will many passengers when they face further price increases in their fares. As the hon. Member for Northampton South said, that puts people’s ability to maintain their employment in jeopardy.

I welcome the new Secretary of State. I support the motion and hope that we can go further at a later date. I hope that with the new rail team, we can have a wider debate that is unfettered by the ideological commitment to privatisation that there has been in the past.

14:56

[Mr Mark Spencer (Sherwood) (Con)]

I am grateful for this opportunity to speak. Like many colleagues, I wish the Secretary of State well, although he is not in his seat at the moment. It was great to see him back at the Dispatch Box. In taking interventions from Opposition Members, he was generous, flexible and accommodating—characteristics that he did not always demonstrate in his previous role.

This debate is simple for me. Although the railways are a complicated issue, the fundamental question is, who will pick up the tab of improving our railways? I am pretty disappointed by this debate because it is almost blatantly politically opportunistic. This is such a serious issue and it affects so many of our consumers and constituents that we should have more grace than to bat it about in this way and try to score cheap political points.

The answer to who will pick up the tab is, ultimately, the taxpayer. If we all agree that the railways need improvement and investment, and that the cash has to come from somewhere, ultimately the taxpayer has to pay the bill. The question is how to strike the balance between the ordinary taxpayer and the individual taxpayer who makes use of the service and rides on the trains. I put it to the House that someone working in the former coalfields of Sherwood, where rail services are pretty sparse, who earns less than £20,000 a year should not be put under pressure to pay taxes to give a banker who lives in Surrey a subsidised ride into the City. That is a difficult problem to solve, but we have to get the balance right between the ordinary taxpayer and the commuter. I am not sure that we have got the balance right today.

Standing at the Dispatch Box today, the Secretary of State inherits a situation that I do not envy: he comes to his role in the middle of a global financial crunch; he inherits a railway system that has faced enormous under-investment from a series of Governments; he faces the global price of energy going through the roof; and he has inherited a deficit from the previous Government that is difficult to solve.

[Caroline Lucas]

The hon. Gentleman talks about the importance of getting the right balance. Does he think the right balance has been struck given that, since rail privatisation, there has been a 7% drop in the cost of motoring and a 17% rise in rail fares?

[Mr Spencer]

I do not know what sort of car the hon. Lady drives, but I certainly have not seen a 7% drop in the cost of my motoring. I do not think we have got the balance right at the moment, but we have heard a series of speeches by Opposition Members about how nationalisation could improve the railways. I wonder whether people’s memories are so short that they forget how poor British Rail was. The Government who privatised the railways did not do it because British Rail was so fantastic.

[John McDonnell]

It is important in these debates that Members of all parties cut through the myths. May I refer the hon. Gentleman to a report by a think-tank called Catalyst, which analysed the subsidy given to British Rail in comparison with those in the rest of Europe and found it to have been the most efficient rail service in Europe? It also analysed the differences between the subsidies under nationalisation and those provided now, and again found British Rail to have been more effective and efficient. I will send him a copy.

[Mr Spencer]

I would be very grateful to the hon. Gentleman. I accept that this is a complicated issue, but when British Rail ran the railways it was not a panacea or a fantastic system. There were enormous delays for commuters, and the railway carriages were cramped. The service provided to commuters was shocking.

We could argue that there has not been enough progress, which I accept to a certain extent. Like the Secretary of State, I travel on the midland main line. It seems simple to say that capacity on that line could be improved just by making the trains a little longer, but the situation is much more complicated than that. The trains are already too long for people who want to get out of certain carriages at Loughborough station, so they have to move down the train to get off. Enormous investment is required in the midland main line, which is one of the most under-invested railway lines in the country, and I am delighted that the Government are putting in the cash to improve it by moving electrification further up towards the midlands and Yorkshire. It has been a long time coming.

I return to my constituents in Sherwood, who are not blessed with wonderful railway connections. If a resident of the town of Ollerton is employed in the city of Nottingham, their only option is to use buses or get in the car and drive. Public transport provision in my constituency is shockingly poor, and with the exception of the town of Hucknall, railway provision is pretty much non-existent. A taxpayer in Ollerton has to get in their car, for which they have paid road tax, and fund their journey by paying for petrol and the tax on it. They drive to the city of Nottingham and pay the workplace parking levy introduced by the Labour-controlled city council to earn their wage to pay taxes to support a banker in Surrey by cheapening his journey into the City of London. To someone working in Sherwood and earning twenty thousand quid, that does not seem acceptable. We sometimes need a bit of a reality check. I have heard a lot of complaints from colleagues in the south-east. I understand that they feel under pressure because of the increases in the cost of their rail tickets, but there is not a great deal of sympathy from hard-pressed, hard-working people in the coalfields of Nottinghamshire who are on low wages.

How will we solve the problem? Frankly, I am not sure that I have all the answers, but I would be delighted to work with the Secretary of State and the transport team to try to solve it. I believe that the answer is for the price of railway tickets to creep up, so that people can adapt and adjust, and for us to find ways of being more efficient. My hon. Friend the Member for Northampton South (Mr Binley) talked about efficiency savings, which will be the key to solving the problem. We must not only make use of taxpayers’ money for investment but find ways of spending it in the most efficient way possible. It is not tolerable or acceptable to my hard-working, tax-paying constituents that they have to keep dipping their hand in their pocket only for that money to be wasted rather than spent in the most efficient possible manner. If efficiencies are made, they will be able to benefit when they make use of the trains if they have the opportunity to come to London or to commute across Nottinghamshire. They cannot keep paying indefinitely without efficiency savings.

Probably the most shocking statistic that I have heard today is the comparison between the cost of flying and using rail. It is now cheaper to fly from Edinburgh to London than it is to go on the train. It seems bonkers that we find ourselves in that position, but it demonstrates how efficient the private sector can be in providing air journeys.

[Caroline Lucas]

The hon. Gentleman’s point is utterly specious. That situation has nothing to do with the effectiveness of a privatised airline and everything to do with the fact that airline fuel is subsidised whereas other fuel is not. If we subsidise domestic flights, it is not surprising that railways will be more expensive. Will he follow through on the logic of his argument and say that the Government will consider getting rid of the subsidy on domestic flight fuel?

[Mr Spencer]

I certainly think that we should examine how railways fund their fuel and energy supplies, and we are considering electrifying lines so that they are more efficient. I know that the hon. Lady is talking about aviation fuel, but I make the point that some rail lines, such as the midland main line, run on diesel rather than electricity. I am sure that the carbon footprint of those journeys will be of interest to her, and I wholly accept that we should continue to examine the matter.

I cannot reiterate enough the importance of getting the balance right between the commuter paying and the taxpayer paying. It is easy to forget that hard-working people doing fairly low-paid jobs are under equal pressure and also have to pay for transport to work. It is wrong to suggest that we can simply reduce rail fares.

I was aghast at some of the comments of my Liberal colleague the hon. Member for Cambridge (Dr Huppert), who is no longer in his place. He said that cutting the price of some rail tickets was Liberal Democrat policy. I hope that when the Minister responds, he will assure us, as a Liberal Democrat member of the Government, that the Liberal Democrat policy and the Government’s policy are fairly closely aligned. In the land of buttercups, rainbows and daffodils where my colleague seems to live, things do not seem to balance out as I understand them in the real world.

I look forward to the Minister’s response and hope that as the Secretary of State settles into his role he will consider the whole country, not just the commuters. They are obviously under pressure as they have to pay for their tickets, but he should also consider the hard-working taxpayers.They do not have a lot of spare cash and cannot keep dipping into their pockets for it.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. To accommodate everyone, I am going to introduce a six-minute limit.

15:08

[Caroline Lucas (Brighton, Pavilion) (Green)]

People in my constituency have simply had enough of the rising cost of public transport, and the latest above-inflation rail fare increase is just about the last straw. Worried Brighton residents repeatedly tell me that they are already suffering from below-average earnings and simply cannot afford the proposed increases. As I mentioned earlier, one man told me how he had to give in his notice at his job in London because he simply cannot afford to get there. Now he is unemployed because he could not afford his rail fare.

Much has been said today about the impact of spiralling ticket prices on cash-strapped commuters, who are rightly furious that trains continue to be overcrowded and unreliable as well as overpriced; that public transport options are not fully integrated; that smart ticketing is not the norm; that trains are still too hot in the summer and too cold in the winter; and that the toilets do not work, or are simply non-existent on some train services from Brighton. That is a serious equalities issue. I have been contacted by many Brighton residents who want to be able to use the train but have health problems or are elderly. The fact that there are not toilets on the trains means that they can no longer use them. As a daily commuter between London and Brighton, I know only too well how accurate many of those complaints are. When we urgently need rail to play a role in reducing greenhouse gas emissions across the transport sector and contributing to improved air quality, the system should be better.

Fares should be managed as part of an overall strategy of making public transport more integrated, more comprehensive and more affordable, helping people to leave their cars at home and providing an attractive alternative to flying for longer journeys within the UK. Yet, since privatisation, the cost of train travel has risen by 17% in real terms compared with a 7% drop in the cost of motoring. Those higher fares mean that that gap will now widen. Moreover, the rail fare increases announced a few weeks ago represent an unacceptable tax on rail commuters, given that the percentage increase above the 1% written into the franchise agreements flows directly to the Treasury.

I welcome today’s motion as a step in the right direction, but I support the suggestion of the hon. Member for Cambridge (Dr Huppert) that fares should not be allowed to rise at all—if anything, they should come down. I regret that there is no Liberal Democrat amendment on the Order Paper to that end. However, we need to go much further. The controversy over the west coast main line franchise shows that what people want most is some kind of stability on the railways. They are not impressed by one unaccountable company snatching control from another with promises that they may never deliver. Nor are people happy that the cost to the public purse of running the railways has risen by a factor of between 2 and 3 times since privatisation.

The hon. Member for Hayes and Harlington (John McDonnell) has already mentioned the report “Rebuilding Rail”, which I warmly commend to the House. It makes cogent arguments explaining why, under privatisation, there are much higher costs to the public. As the hon. Gentleman said, they include higher interest payments to keep Network Rail’s debts off the Government balance sheet; costs arising as a result of the fragmentation of the rail system into many organisations; profit margins of complex tiers of contractors and subcontractors; and dividends to private investors.

[Mr Binley]

Will the hon. Lady give way?

[Caroline Lucas]

I will not, simply because of time.

The only way to sort out the mess and waste, the rising fares and overcrowding is to take back control of the railways. I am not afraid to call that nationalisation.

It is time to make public transport a public service again, and to nail the myth that buying back assets that have been sold off would be too expensive. A step-by-step approach would allow the railway’s assets to be reacquired for the public at minimal cost and with substantial ongoing savings over time.

[Mr Binley]

On the basis that the hon. Lady will get an extra minute, will she give way?

[Caroline Lucas]

I have just remembered that, so I am delighted to let the hon. Gentleman speak.

[Mr Binley]

I am most grateful. Is the hon. Lady really saying that she wants to return to a nationalised British Rail? Is she also saying that privatisation is bad and that all the other privatised sectors have not cut costs? Or is the rail sector the only one that has not? How does she explain that?

[Caroline Lucas]

I refer the hon. Gentleman to Deutsche Bahn, SNCF and several railways in Europe that run perfectly good public sector railways with much lower fares than ours. I am not necessarily saying that we should go back to British Rail; I am saying that we should learn from that experience. We might in future have much greater democratic control, with passengers involved in the decision making. Far more of running the railways might be delegated to regional level. We do not have to go back to something—we can go forward to something and learn from the best of what is happening in many European countries and in the rest of the world.

The proposal that “Rebuilding Rail” and others are considering is a more or less cost-free process, whereby when the franchises expire or companies fail to meet the criteria, they could be acquired on a case-by-case basis. New rolling stock could be directly procured, making the process far cheaper than the current leasing arrangements, and fair price regulation could be introduced to bring down the cost of leasing existing rolling stock from its private sector owners.

We also need to bring Network Rail’s debt back on to the Government’s balance sheet. I appreciate that the Government will blanche at the very thought, but doing that would reflect the reality of the situation and result in much lower interest payments.

According to calculations from “Rebuilding Rail”, reuniting the railways under public ownership could save more than £1 billion a year of taxpayers’ money. To put that figure in context, the money that we would have saved if rail had not been privatised could have been used to cut fares by up to 18%. The matter needs to be properly examined, and I am deeply upset that the Conservative ideological position means that the proposal is dismissed simply because it contains the words “nationalisation” or “public ownership.”

[Mr Marcus Jones (Nuneaton) (Con)]

I think I am following the hon. Lady’s logic. However, if the perfect answer for the general public is to renationalise the railway, why is there such a large petition about the west coast main line, which supports the continuation of a private company’s running that route?

[Caroline Lucas]

I imagine that that is because there was no properly public option on the ballot paper, as there was with the east coast main line, which was taken back into public ownership. Plenty of polls show massive support for bringing the railway back into public ownership. A majority of people want that. I suggest that the hon. Gentleman consider that.

In Europe, passenger rail services are much cheaper and services are better, and between 80% and 100% of train services are run by publicly owned companies. Those two facts are not unconnected. Despite what some opponents claim, there is no EU requirement for the railways to be privatised. Other European countries have accommodated EU legislation, while largely or entirely retaining public ownership of their railways, by ensuring that there is separation between the body that is responsible for passenger train operations and the subsidiary company that is responsible for capacity allocation and access charges.

The Government should know that there is a problem, since the McNulty review, commissioned by Labour but delivered to the coalition, clearly highlighted excessive costs in the UK rail industry. That report also showed that privatisation’s promise of innovation simply has not materialised. Both McNulty and the Transport Committee noted that, in fact, innovation has been actively discouraged by the disjointed and complex nature of the privatised railways.

Genuine, at-risk private investment, as opposed to private capital expenditure that is underwritten by the Government, makes an insignificant contribution to the railways, representing about 1% of investment. That is substantially less than the additional costs that arise from a privatised structure. Nor has efficiency improved in the hands of the private sector—despite often being cited as another major benefit of selling off public services. In fact, there has been an increased number of administrators and managers, as well as duplication of functions in different private companies, and staff who have to be employed to ensure that everyone talks to one another and knows what is going on. It has been estimated that the cost of those back-room staff has increased by 56% since privatisation, measured per train kilometre—money that would have been better spent keeping rail fares affordable and investing in real improvements.

Britain was once world famous for its trail-blazing and hugely successful railway, but today, privatisation is failing passengers, the economy and the environment. Unless it returns to public ownership, Britain will struggle on with a disjointed, complex and often dysfunctional railway system that regularly makes commuting a miserable experience and puts us to shame internationally.

15:17

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

I am in a difficult position because I support the sentiment, but oppose the motive behind the motion. The motive is opportunism of the worst kind.

I support the sentiment because I am very concerned about hard-pressed rail commuters in Sittingbourne and Sheppey, and I want them to be helped. My hon. Friend the Member for Sherwood (Mr Spencer) compared his constituents and commuters in the south-east. I should point out to him that only a small percentage are bankers travelling to the City of London. The vast majority of my constituents are no better off than his.

Let me read out part of a letter—one of many—that I have received. It states:

“Dear Mr Henderson,

Once again I find myself writing to you on the subject of rail fares. As you will have seen in the press, the Government announced that rail fares will rise in January by an average of 6.2%. By my calculations, this will bring the cost of a non-High Speed, train only season ticket from Sittingbourne to Victoria to £3,954.88. My wife and I both commute from Sittingbourne to Victoria to work in Westminster and the increase will mean the cost of getting to work will take 22% of our combined take home pay—the increase will hit my wife particularly hard as it will represent 30% of her monthly income. The rises come at a time when many people, including us, are experiencing frozen pay or pay cuts.

Theresa Villiers said on the BBC yesterday that the increased fares will ‘make life better’ for rail users by paying for improvements.”

[Henry Smith (Crawley) (Con)]

The point about investment in rail is important. I commute into London most days, and I welcome the £26 million investment going into Three Bridges station, and the £53 million investment that will go to upgrade track capacity at Gatwick station.

[Gordon Henderson]

My hon. Friend is right about investment, but commuters on Southeastern railways have heard the same tired old tune, year in, year out, and frankly they have stopped believing it, if they ever did. We may have the Javelin service into St Pancras, but that is hardly high speed as it spends most of the journey on the tortuous route through Strood and Gravesend.

The letter continues:

“High speed also means higher cost, due to the supplement charged to travel beyond Gravesend. The service into Victoria has deteriorated over the years to the point where most “fast” trains take almost an hour and 10 minutes to travel from Sittingbourne to Victoria”.

Only 30 years ago the journey was 50 minutes, so travel times have gone up rather than down. I suggest that those who support High Speed 2 consider the impact of High Speed 1 on my constituency.

That letter just about sums up the frustration felt by my constituents—frustration that did not happen overnight but has been bubbling up for many years. The motion calls on the Government

“to restore the one per cent above inflation cap on annual fare rises”.

My constituents, however, have had to pay fares linked to the retail prices index plus 3% for many years because that formula was written into the franchise agreement for Southeastern railways, which runs trains in north Kent. That greater fare increase in Kent was to pay for improvements that were allegedly introduced in the area prior to April 2006, although my constituents often wonder what those improvements were. If those improvements were HS1, that would add insult to injury because people find themselves either paying for a superfast service that is not fast and goes to a London station to which few of them want to travel, or paying for a standard train service that takes longer than it did 30 years ago.

[Katy Clark]

Is the hon. Gentleman aware that the invitation to tender for the new intercity west coast franchise allows for increases in rail fares of 8% above inflation in 2013 and 2014, and 6% above inflation for the rest of the franchise? Does he share my concerns that yet again, such increases will not lead to proper investment in the service?

[Gordon Henderson]

I share the hon. Lady’s concern because my constituents have a similar problem. The franchise agreement with Southeastern also set out the level of subsidy that it would receive. That is important because the subsidy started at £139.9 million in year one, reducing to £24.7 million by year seven. In year eight, Southeastern will be expected to pay a premium of £9.3 million to the Department for Transport. It does not take a genius to work out that if the Government expect Southeastern to pay them a premium, rail fares will have to rise to fund it.

Who negotiated that franchise agreement? The Labour Government did. Indeed, their stated policy was to recruit more of the cost of the rail service from those who use it, rather than relying on the general taxpayer to subsidise it. It is, therefore, hypocritical in the extreme for Labour Members to complain now about a system of rail fare pricing that they introduced and supported. I greatly fear that spiralling rail fares will have a detrimental effect on commuters in my constituency, and will directly hit hard-working families who are already struggling. The increases will hit even harder people who have recently lost their jobs, such as those at Thamesteel who will have to commute some distance to find a job.

[Mark Reckless]

Does my hon. Friend agree that this is particularly difficult because Kent has some of the lowest average incomes in the south-east yet some of the highest commuter fares? The hon. Member for Brighton, Pavilion (Caroline Lucas) mentioned costs in her constituency, but the cost of commuting from Chatham, which is only 30 miles away, is about £100. Brighton is almost 50 miles away, yet the cost is almost the same.

[Gordon Henderson]

I agree with my hon. Friend. The cost per mile of rail travel from our part of Kent is one of the highest in the country, and commuters in my constituency have had to put up with that for a number of years. That is the issue I wish to address, and I welcome the Transport Secretary’s offer to meet Kent MPs. Although he is not present in the Chamber, I assure him that at that meeting I will press for help for commuters in my constituency.

As I said at the beginning of my remarks, I am in a difficult position. I support the sentiment of the motion but oppose the motive behind it. For that reason, I will abstain, as I hope will all my fellow Kent MPs.

15:25

[Katy Clark (North Ayrshire and Arran) (Lab)]

It is a pleasure to follow the hon. Member for Sittingbourne and Sheppey (Gordon Henderson). I listened with great interest to what he said, and I assure him that I was in a similarly difficult position on many occasions during the previous Parliament. I was proud of the money that the Labour Government ensured was invested in the railways, but I did not necessarily agree with all the policies on the structure of the railways. The hon. Gentleman described rail fare franchising arrangements, and that area needs to be looked at again. It is, therefore, regrettable that no lessons seem to have been learned especially, as I outlined in my intervention, in the invitation to tender for the west coast line.

The general public are clearly outraged by the Government’s decision to increase the annual cap on rail fares to 3% above inflation in January 2013 and 2014. Many commuters will find that the cost of tickets increases by as much as 11% as a direct consequence of the Government’s decision to give back to private train companies the right to increase the cost of some tickets by an additional 5% on top of the increase set by Ministers. The position is slightly better in Scotland, but there, too, we will see significant increases in rail fares that cannot be afforded at the moment.

A number of hon. Members have made an effective business case for why people simply cannot afford increases in train fares at this time. The hon. Member for Brighton, Pavilion (Caroline Lucas) referred to a constituent who has decided that they can no longer work in London as a result of the fare increases, and many hon. Members will have been visited by constituents for whom the cost of transport, whether train and bus fares or something else, has been a prohibitive factor in seeking employment.

Powerful contributions have been made about the need for a simpler ticketing structure because many who use the railways simply do not understand how the current system operates. Government policy, and the direction of travel of some of those managing the railways, seems to be moving towards a situation in which we will rely on machines rather than on people. We have heard about the job losses that may result from the McNulty review, but our constituents do not want a future railway with stations that have no people to treat them as customers and where they have to use machines to buy tickets, where they do not have the security of knowing that staff are present, and where they have to get on trains that have CCTV equipment rather than personnel to help them. If that is the direction of travel, I hope that the new Secretary of State for Transport will bring some common sense to the agenda and recognise that that is not the kind of railway network we want for the future.

Politics is about choices. It will be interesting to watch the debates within the Government over the coming period not only on railways, but on aviation and roads. The Labour Government made a choice in favour of the railways. We might not have done everything we would have liked to do and we might wish we had done more, but there was a commitment to the railways. There are incredibly strong environmental reasons why we need to make the choice in favour of railways rather than other modes of transport, and why we need policies to ensure that people choose public rather than private transport in as many situations as possible. I therefore believe the Government are going in completely the wrong direction with their policy of rail fare increases.

The National Audit Office report on the impact of fare increases on Government income and private train company profits warned of the risk that the benefits of any resulting increase in passenger revenues will not be passed on to taxpayers, but will result simply in increased train operating company profits. A number of hon. Members described how the model of railway ownership takes money out of the railway system and puts it into the hands of those who profit as a result of ownership—the railway companies. We need to look forward to simplified, cheaper railways, but the Government’s decisions in the past couple of months are taking us in completely the wrong direction.

15:31

[Priti Patel (Witham) (Con)]

I congratulate the new Department for Transport Front-Bench team on their positions. I am delighted that my right hon. Friend the Member for Chelmsford (Mr Burns) is in the team, because he is a constituency neighbour—I think he will recognise some of the points I will make in my short contribution.

All hon. Members have made valid points on the challenges of rail fares, the fare structuring system and, as the hon. Member for North Ayrshire and Arran (Katy Clark) has pointed out, the difficult political choices that have to be made in government. I would like to think that, before the autumn statement, my right hon. Friend the Chancellor will listen to and take on board many of the concerns raised by hon. Members on behalf of hard-pressed commuters and rail users.

The Opposition motion calls for a fare increase of RPI plus 1, but as colleagues from the Kent constituencies have said, the Labour Government’s policy was an increase of RPI plus 3 in the area covered by Southeastern. Government Members should not listen to lectures on fare increases, because we have all had fare increases in the past. My right hon. Friend the Secretary of State for Transport mentioned a fundamental aspect—the basket system by which the figures are calculated. Labour did nothing about the basket system when in power, leaving many commuters paying above-average increases.

Like all hon. Members’ constituents, mine are concerned about above-inflation rail fare hikes, but the increases are harder to stomach when passengers see no improvements in services. Commuters in Witham have had continual increases in rail fares, so they are appalled that they have had no improvement in services. Under the Labour Government, there was no investment in Essex rail infrastructure, while commuters faced horrific delays.

It currently costs £4,700 per year to travel from Witham to London, and almost 4 million passengers a year use stations in my constituency—2.2 million use Witham station alone. We have come to the conclusion that enough is enough. I appreciate that there is a new Front-Bench team, but I ask them to recognise that the east of England, including Essex, has suffered for far too long from the effects of underinvestment and price increases. If nothing else, it is about time that the regional anomaly, which has existed not only for the past few years, but for decades, was rebalanced.

Like all regions, the east of England is growing. Investment in rail is essential to jobs, investment and economic growth. I should like to give a plug to work that has taken place within the eastern region. Essex, Suffolk and Norfolk MPs have pulled together a team to work with our councils and local enterprise partnerships, and, importantly, rail user groups, which are made up of the very people who shell out the money for the huge prices, to develop a rail prospectus for the greater Anglia franchise—I know the Minister is familiar with the document because he supported and made a tremendous contribution to it.

The document is about not only rail fares, but investment. I have taken the opportunity to plug the prospectus, but I should also point out the highly significant economic benefits not just to the region and our commuters, but to the country. I hope that the new Department for Transport team consider the points I and others have made in the debate, and that they think about how we can start rebalancing rail fares and rail investment.

15:36

[Lilian Greenwood (Nottingham South) (Lab)]

I join colleagues on both sides of the House in putting on the record my congratulations to the new Transport Secretary on his appointment. It is fitting that he should have made his debut in this debate. I know he is unable to be in the Chamber at the moment, but I am sure he will look carefully at all the arguments put forward by colleagues.

I listened very carefully to the Transport Secretary’s contribution, and was somewhat disappointed that he said very little about rail fare increases. Perhaps the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), will say more about them, or perhaps the Secretary of State will return to fare increases in the coming days or weeks as he finds his way in his new brief and tell us exactly what he will do to protect passengers, what he thinks about the flex system, and whether he will lobby the Chancellor to keep rail fare rises to RPI plus 1%, as the Opposition propose. The Transport Secretary has an opportunity to push for the reintroduction of a real cap on fare rises, and I very much hope he takes it.

This debate has been about the general and the particular. There is a general crisis in the cost of living. Household budgets are under enormous pressure as living costs climb ever higher. The Opposition have called today for the Government to take a particular action—a further U-turn that would be welcomed by the constituents of all hon. Members in the Chamber. The Government could reverse their decision to allow the dramatic rise in rail fares, which, for many people, have come at the worst possible time.

The Government could resist the growing burden on hard-pressed passengers. The Labour Government put in place a strict cap on rail fare rises of 1% above inflation. It is a cause of great regret, both in the House and more importantly in the country, that the current Government chose to give the rail companies free rein over regulated fares. The removal of the cap, coupled with the restoration of flex, will lead to fare rises of up to 11%. That is a real blow at a time of pay freezes in both the public and the private sectors, higher-than-expected inflation and a contracting economy. The Campaign for Better Transport has warned that the cost of season tickets will go up three times faster than salaries. Without economic growth, the pain will only increase in intensity.

My hon. Friend the Member for Wirral South (Alison McGovern), who is not in her place, clearly explained how many people, particularly commuters, need to travel at particular times and cannot shop around for cheaper fares in the off-peak or super off-peak periods. They must simply pay up and see their disposable income hit. To give just one example, when one of my constituents needs to commute from Nottingham to Leicester to go to work, a season ticket currently costs £1,672 a year. Under the Government’s plans, it is estimated that that figure will rise to £1,937 by 2015, which would represent 7.38% of the average regional salary. Pity the commuter from Leeds to Hull whose season ticket will go up from £3,732 to £4,323, an eye-watering 16.5% of the average regional salary. In the most extreme cases, a season ticket could cost up to 25% of the average salary.

As my hon. Friend the Member for Harrow West (Mr Thomas) noted—and the hon. Member for Northampton South (Mr Binley) agreed—commuters in the south-east are routinely spending 15% or more of their salary simply on getting to work, and many will be priced out of work altogether. The example given by the hon. Member for Brighton, Pavilion (Caroline Lucas) was helpful in that respect.

The issue is not just affecting commuters. As my hon. Friend the Member for Huddersfield (Mr Sheerman) said, this also hurts businesses in his constituency whose staff need to travel to London to sustain and grow future business. Meanwhile infrastructure spending is being scaled back and the Government seem set on using the McNulty report as cover to withdraw staff from stations, despite many passengers relying on them to find the cheapest fares, which—as many hon. Members have pointed out—cannot easily be done using automated ticket machines, never mind the other concerns about unstaffed stations.

The fare rises will also have a particularly serious impact on those on low incomes, including pensioners and young people, who are already feeling the squeeze as the cost of living rises. When I speak to young people in my constituency the cost of transport is one of the key concerns that they raise, and I think the high cost of train travel comes as a real shock to many of those leaving home for the first time to go to university. For pensioners, the fare rises are compounded by cuts to alternative modes of transport. Bus services have been cut back and the withdrawal of support for long-distance coach travel is hitting pensioners hard.

Before the last election, someone said:

“The fares issue will not go away. It will be the biggest inhibitor of train travel in the years to come.”—[Official Report, 25 February 2010; Vol. 506, c. 166WH.]

Those are not my words, but those of the Under-Secretary of State for Transport, the hon. Member for Lewes. In fact, we have heard many warm words on fares. Scores of coalition MPs have been telling their local papers that they opposed the rise in fares, despite voting for them in this House. They will be glad to have the opportunity to set the record straight, and I trust that all those hon. Members will join us in the Lobby today.

[Dr Huppert]

The shadow Secretary of State also suggested on several occasions that we had voted for RPI plus 3%, but I do not recall doing so. Can the hon. Lady point to the dates of the Divisions in which any hon. Member specifically voted for RPI plus 3%?

[Lilian Greenwood]

The hon. Gentleman will find that we have had previous debates on transport and the cost of living when he had an opportunity to vote for our proposals, which would have reduced the increase in fares.

[Dr Huppert]

Will the hon. Lady give way again?

[Lilian Greenwood]

Not at the moment.

We have heard many warm words on fares and coalition Members have been supportive of the Government’s position. We have been promised an end to “inflation busting fares” in a press release from the Department for Transport, and both Liberal Democrats and Conservatives promised “fair pricing for rail travel” in the coalition agreement. For all those fine words, what has been delivered? Fares will rise by 3% above inflation, flex will be reinstated, and there will be overall rises of up to 11%. The hon. Member for Cambridge (Dr Huppert) likes to pretend that that is nothing to do with his party, but it is his Ministers, including the Under-Secretary, who are imposing these measures.

The new franchises also hand operators unprecedented license over the quantity and quality of the services that they run. Ministers must mind the gap between rhetoric and reality. For too many passengers the reality of rail travel is overcrowded carriages, repeated delays and needlessly complicated pricing structures. Instead of tackling the root causes of waste in the railways, the Government are merely handing the cost on to passengers. We are keen to see a more efficient rail industry, but passengers face unaffordable fare rises now. There have been enough empty pledges from this Government. Their words are cheap, but the fares are dear, and the rail companies count the profits. There has to be another way.

Less than a month ago, the former Transport Secretary, now Secretary of State for International Development, said that she wanted to find a means of bringing

“fares down to something affordable.”

This motion offers just such a means. I hope that the new Transport Secretary will be prepared to stand up against vested interests for the public good, and I hope that Members from all parties will support this motion to help ease the burden on rail passengers.

15:45

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

I thank all those who have contributed to this debate, and I recognise the strong feelings that rightly exist about rail fares across the House and in all parties.

Reforming and modernising Britain’s railways is one of the Government’s top priorities. We are already delivering the most ambitious rail investment programme since the Victorian era to boost capacity and improve services. In July, we announced £9.4 billion of network upgrades across England and Wales for the period between 2014 and 2019, and a £4.5 billion contract to supply Britain with its next generation of nearly 600 intercity trains. As we heard earlier, we have committed to 861 miles of electrification—not nine miles, but one in nine miles of the entire network.

New tracks and trains are only one part of our blueprint for a better railway. We are also taking a fresh look at fares and ticketing to reflect the latest technologies and meet the changing needs of passengers. Such a review is long overdue. Many rail users find the current system archaic and impenetrable—we have recently concluded a public consultation inviting views on how we might make it more transparent, more accessible and more flexible.

One of the key drivers of change will be smart ticketing technology. In London, the Oyster smartcard has transformed public transport, providing passengers with a more efficient and convenient alternative to paper tickets, and accelerating the flow of people through busy rail and tube stations. Smart ticketing could pave the way for a new fares system offering discounts for passengers who avoid the busiest services. As well as benefiting individual rail users, it would help us make better and more efficient use of train capacity so the savings realised can be ploughed back into keeping fares affordable.

The Government’s ambition is for all public services to become digital by default. That means helping as many people as possible to switch to digital channels, while continuing to provide support for the small minority who cannot make the switch. Buying a train ticket should be no different. The hon. Member for Rutherglen and Hamilton West (Tom Greatrex) referred to the complexity of tickets and the difficulties people can have with ticket machines. Those two matters are being addressed fairly and squarely by the fares and ticketing review that the Department is undertaking.

The challenge for train companies, therefore, is to make buying a ticket online or from a machine just as easy as from a station ticket office. Purchasing a rail ticket should be a straightforward transaction, not an obstacle course. So as part of our reform programme, I want to ensure that when passengers buy tickets, they can navigate the choices available and find the best ticket for their journey, quickly and clearly. Train companies need to improve their machines so that they sell the full range of tickets and guide passengers through each step of the process. As I said, that is all part of the fares and ticketing review that is now under way.

As I mentioned, we are all concerned about rail fares and we all want an end to above-inflation fare rises, but it is important to put the Opposition’s motion in context. Under them, rail fares increased by 1% below inflation, but that was changed to 1% above inflation in 2004. Under the previous Government, therefore, we had years of above-inflation rises, and it appears from the motion that it would still be Labour’s policy, were it to come to power, to have years of above-inflation rises. We want to end these above-inflation rises, not continue them indefinitely, as the motion suggests doing. It looks a little opportunistic to talk about fares being capped, given that the record of the previous Government was one of continual year-on-year above-inflation increases.

We have heard about the issue of flex, which is the ability not only to increase fares above inflation, but—the Opposition did not mention this—to increase a lot of fares below inflation. The previous Government introduced flex in 2004, and it ran through until 2010, so it was in operation for several years. A 2010 deed of amendment introduced by the then Transport Secretary reads:

“With effect from 00.00 on 1 January 2010 Schedule 5.5 of the Franchise Agreement will be amended as set out in the Appendix to the Deed… From 00.00 on 1 January 2011”,

which is just after the general election, Members may note,

“the amendments to the Franchise Agreement set out in this Deed of Amendment shall be reversed”.

So there was a deliberate policy from the previous Government to end flex only for one year, and over a period that happened to cross the general election.

[Maria Eagle]

My noble Friend Lord Adonis made it clear that it was his policy to put an end to flex full stop and that it remained his intention to do so. The deed to which the Minister referred was a one-year way of dealing with it, but of course we were running into a general election, and there are rules about binding successors. Is he asserting that my noble Friend has been misleading the Transport Committee about his policy intentions?

[Norman Baker]

I am merely reading out the legalistic words that the previous Transport Secretary put in place stating that the policy was to be reversed on 1 January 2011. The facts speak for themselves. I have to ask, however, if the Opposition’s policy is now to end the flex, why the Welsh Assembly Government, run by the Labour party, continue to operate it. I have not heard any words from the Opposition condemning the Welsh Assembly Government. Or is it all right to have flex in Wales, where Labour is in control, but not in England, where we are determining policy for rail matters over here?

I am interested in a point that several Members made about the split of the responsibility for paying for the railways between passengers and taxpayers. The point about where that balance should lie is very important. The Opposition spokesman will know that Labour’s plan was for a 70% passenger and 30% taxpayer split. In 2010, the percentages were 64% passenger and 36% taxpayer, so one assumes that Labour wants to increase the percentage in order to reach its 70% figure. Our policy priority does not include worrying about the split per se, but is about getting efficiencies into the rail network—a point that my hon. Friend the Member for Northampton South (Mr Binley) rightly made. I can assure him that we are taking great steps to improve the efficiency of the rail network, and by and large we have adopted the report from Roy McNulty, which was a helpful contribution to the debate on the rail network, in order to bring down our costs.

Roy McNulty indicated that costs were about 40% above what they should be, and we are determined to make those savings. We have identified savings of £1.2 billion in control period 4—the present control period—and up to £2.9 billion of further savings in control period 5. There are further savings to be made through genuine efficiencies—not cuts—in how the railway is run. One, for example, is the alliance project between Network Rail and South West Trains. I am not quite sure whether the Opposition support that trial, but it is delivering real savings and efficiencies, eliminating duplication, reducing the cost of the railway and providing a better service for the people who use South West Trains. That is an example of how efficiency savings can improve services. I am happy to say that it is now happening on South West Trains.

[Lilian Greenwood]

The Minister has talked about the balance between taxpayers and fare payers. He will know that the National Audit Office said that higher rail fares might simply lead to higher profits for train operating companies. How will he ensure that taxpayers benefit, not the private companies?

[Norman Baker]

It is our intention, once the savings coming through from Network Rail are realised, to end the era of above-inflation rail fare increases introduced by the previous Government. There can be no doubt about our intention to do that.

Let me deal with the issue of ticket offices raised by Opposition Members, including the hon. Member for Hayes and Harlington (John McDonnell), for whom I have much respect when it comes to railway matters, and the hon. Member for Nottingham South (Lilian Greenwood), the shadow Minister. It is worth pointing out that in the last five years of the previous Government, Ministers approved cuts in opening hours at approximately 300 stations. The number since the coalition Government came to power is soon to be 34, so there were far more cuts to ticket office hours under the last Government than there have been under this Government. In fact, the shadow Secretary of State might want to know that ticketing hours have actually increased at a number of stations since this Government came to power. We do not hear much from the Opposition about that either.

I do not want to make my speech simply a matter of rebutting the Opposition’s motion. It is important to get rail fares down as soon as possible and this Government take that very seriously indeed. We are committed to reducing and abolishing above-inflation rises as soon as we can. To answer the point made by my hon. Friend the Member for Sherwood (Mr Spencer), I think both sides of the coalition are committed to buttercups, rainbows and daffodils. Both of us want to end the era of above-inflation increases as soon as we practically can, and the sooner we can make the savings that the Opposition are so reluctant to see—and which, by the way, they have no plan to deliver—we can end that above-inflation record, which I am sorry to say the Labour party introduced when it was in power.

Taxpayers and indeed passengers have been paying over the odds for the railway. The fiscal position demands that the high level of public subsidy for rail in recent years be reduced. As a Government, we have a duty, which we take seriously, to keep rail travel affordable for as many people as possible and to minimise the level of taxpayer support for rail by bringing forward sensible and workable efficiencies. Achieving that will depend on securing the efficiency savings that we have outlined in our rail Command Paper. That is why it is so important that the whole industry works together to a shared agenda to deliver for both passengers and taxpayers.

Opposition Members have referred to the coalition agreement. We stand by the words in the agreement about getting a fair deal for passengers, and we are determined to do so. The present Secretary of State has already indicated, in his first contribution in the House in that role, his concern about rail fares, and his predecessor, the right hon. Member for Putney (Justine Greening), did likewise. Yes, there was pressure last year to ensure that we did not have RPI plus 3%. That pressure was successful and we have committed—once savings are found and the improvement in the wider economic situation permits—to reducing and then abolishing above-inflation rises in average regulated fares.

The hon. Member for Brighton, Kemptown—[Interruption.] I beg your pardon, Mr Deputy Speaker: the hon. Member for Brighton, Pavilion (Caroline Lucas)—I should know that, shouldn’t I?—referred to fares. I do not pretend that some fares are not excessive; some of them definitely discourage people from travelling by train. That is part of the reason why we are having the fares and ticketing review. She referred to trains being overcrowded, but to be fair and put the matter in context, she needs to recognise that one of the reasons why the trains from Brighton are overcrowded—I know them very well—is that Southern has introduced a large number of cheap fares, which local people are taking advantage of. There are now people standing off-peak all the way from Lewes or Brighton to London because fares have been reduced to an attractive level. In fact, we have a selection of fares. There is an issue about peak fares—that is part of the fares and ticketing review—but many off-peak fares are very cheap indeed.

I can assure the hon. Member for Wirral South (Alison McGovern) that split ticketing will be covered in the fares and ticketing review. As for East Coast, which is currently run from the Department for Transport, as it were, through an arm’s length body, action has been taken on that point.

My hon. Friend the Member for Cambridge (Dr Huppert) was right to talk about investment for the future, which I have already mentioned. The hon. Member for Hayes and Harlington referred to complexity; that will be dealt with in the fares and ticketing review. My hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson) talked about the inheritance in Kent. I recognise that there are particular issues in Kent that should be looked at, and I am happy for that to be part of the work of the Department for Transport. We want to see an end to above-inflation fare rises as soon as possible, and I want to assure the House that we in the Department are taking steps to achieve just that.

Question put.

The House proceeded to a Division.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I ask the Serjeant at Arms to investigate the delay in the No Lobby.

15:59

Division 56

Ayes: 231

---

Labour: 217
Scottish National Party: 6
Social Democratic & Labour Party: 3
Democratic Unionist Party: 3
Plaid Cymru: 2
Independent: 1
Alliance: 1
Green Party: 1

Noes: 294

---

Conservative: 248
Liberal Democrat: 46

Housing

Wednesday 5th September 2012 Commons Chamber

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I advise the House that Mr Speaker has selected the amendment in the name of the Prime Minister.

16:15

[Jack Dromey (Birmingham, Erdington) (Lab)]

I beg to move,

That this House notes that England faces a housing crisis; further notes with concern that housing starts, including for affordable housing, are down, and that homelessness and rough sleeping have increased under this Government; further notes that the collapse in house building and contraction in construction are a major cause of the double-dip recession; believes that the Government needs to take urgent action to get the economy and house building going again; and calls on the Government to introduce a tax on bankers’ bonuses to fund the building of 25,000 additional affordable homes, to bring forward infrastructure investment, including for housing, and to cut VAT on home improvements, repairs and maintenance to five per cent for one year to help homeowners and create jobs.

Let me start by welcoming the new Housing Minister, the hon. Member for Hertford and Stortford (Mr Prisk), to his post. It is a really important job, and I am sure he will bring to it much-needed skill and insight, and I sincerely hope he will also bring a new sense of understanding and urgency. My experience from dealing with the hon. Gentleman is that he is a modest man, unlike his predecessor, who gave hubris a bad name.

As the hon. Gentleman is new to his post, it might be helpful if I set out why we are having this debate. Today, the country is gripped by the biggest housing crisis in a generation and the longest double-dip recession since the second world war. Since the spending review, our economy has shrunk by 0.6%. As a result of this Government’s twin failure on economic and housing policy, the reality is that Britain is one of just two G20 countries in a double-dip. The reality is also that this is a recession and a housing crisis made in Downing street—and is it any wonder, as the Chancellor has multiple jobs and yesterday’s Housing Minister multiple identities, and both authored worthless plans on how to bounce back from recession?

The facts are stark: house building is down, homelessness is up, private rents have hit record highs, and we have a mortgage market in which people struggle to get mortgages. The latest Government figures tell us that fewer than 100,000 homes were started in the 12 months to June, which is a 10% decrease on the previous 12 months and amounts to fewer than half the 230,000 new households being formed every year.

[Mark Pawsey (Rugby) (Con)]

Will the hon. Gentleman care to tell us how many new houses were started in 2009?

[Jack Dromey]

As I will make clear later, I am prepared to defend our record at any time, but let me just give a few indications of our record: 2 million new homes, 1 million more mortgage holders, and over half a million new affordable homes. Also, we brought up to standard more than 1.5 million homes that were in need of decent homes investment, putting right the backlog left by the previous Government, and in 2007-08, the year before the bankers’ crash, we achieved the highest start point for new-builds in Britain at any time in the last 30 years, with more than 200,000 homes being built. When the crash came, our response was very different from what happened back in the dark days of the 1980s. Did we stand back and wring our hands? No we did not. We acted to keep people in their homes. Through Kickstart and other programmes, we took action, resulting in 110,000 homes built, 160,000 jobs safeguarded and 3,000 apprenticeships. So I will defend our record at any time.

[Andrew Bridgen (North West Leicestershire) (Con)]

Will the hon. Gentleman give way?

[Jack Dromey]

I want to make a little more progress.

The sad reality of the gulf between supply and demand means that this week and every week, 2,500 fewer homes are built than are needed. The Minister will be aware that although his predecessor said two years ago:

“Building more homes is the gold standard upon which we shall be judged”,

housing starts under his tenure were lower in every quarter since Labour left power. The Minister will also know from his considerable experience in the Department for Business, Innovation and Skills that the collapse in the house building industry has had a catastrophic impact on the construction industry. The Office for National Statistics has confirmed that the total volume of construction output in the second quarter of this year fell by 9.5% from the total in the same quarter of last year. The ONS confirms that that was driven by a fall in work on new private housing of 6.7% and a catastrophic 25% fall in the public housing sector.

Two years ago, we warned the Government that by recklessly raising taxes and cutting spending too far and too fast, they risked putting the economic recovery at risk. We warned them that if they cut the housing budget by 60%, it would be a devastating blow not only to house building and the construction industry but to the wider economy and the millions of families desperately in need of a home at a price they can afford. The Government, having failed to listen to those warnings, cannot now escape their failure or duck their responsibilities for its victims.

Perhaps most devastating is the rise in homelessness and rough sleeping, the very issues that the previous Housing Minister said brought him into politics in the first place. Statutory homelessness has risen for five consecutive quarters, up 14% in the past year alone. I do not know what brought the new Housing Minister into politics, but, with the new homelessness figures out tomorrow, will he tell us whether he expects to see a fall or an increase for the sixth quarter in a row?

Most heartbreaking of all—we see it all over the country—there was a 23% rise in rough sleeping last year. It is a visible, visceral epidemic that harks back to the 1980s, when Tory policies led to cardboard cities under bridges and annual reports of deaths in cold English winters.

It is not just those without a roof over their head who are suffering. The Minister’s predecessor and the Prime Minister have claimed on the Floor of the House that private sector rents are falling, so perhaps the Minister can explain why the very company used by both the Prime Minister and yesterday’s Housing Minister to justify their claims, LSL Property Services, reported only two weeks ago that rents hit a record high over the summer? As a consequence, we have the rise of “generation rent” with 1 million young people predicted to be locked out of home ownership by 2020 as they face a squeeze on their wages, increasingly unaffordable rents and difficulties saving for a deposit, as evidenced by the Joseph Rowntree Foundation.

[Ms Karen Buck (Westminster North) (Lab)]

While my hon. Friend is on the subject of private sector rents, which the Government categorically promised us would fall, not least because of the reductions in housing benefit, does he accept that since the election 93% of the additional housing benefit claimants have been working people? It is therefore working people on low incomes who are being hit by the total failure of the Government to fulfil their promise.

[Jack Dromey]

My hon. Friend is absolutely right, and it is a bitter irony that the public purse, through housing benefit, is picking up the consequences of the failure to build new homes on the one hand and subsidising landlords charging ever higher rents on the other.

There are other serious consequences of the growing housing crisis, from health to welfare. Bad housing harms health and costs the national health service £2.5 billion a year. It holds kids back at school, and the price tag for lost earnings of young people whose GCSE results have been affected by poor housing is £14.8 million. Unaffordable housing drives up the benefit bill. The Government’s supposed affordable rent programme alone will drive up housing benefit by £1.4 billion.

Despite the costs of the housing crisis and the Government’s long record of failure, Ministers continue to claim that they recognise the importance of house building, including to the economy. Since cutting the affordable housing budget by 60%, the Government have announced and reannounced countless schemes and initiatives that promised to get Britain building. May I summarise but some?

In November 2010, the Department for Communities and Local Government launched the new homes bonus, promising action

“to get the country building again”.

In March 2011, the Government launched “The Plan for Growth”. Remember that? It said:

“A successful construction industry is vital for sustainable growth. Building and maintaining homes…are activities that underpin the entire economy…it is critical that industry gets the support it requires to build houses on the scale the UK needs”.

It promised

“radical planning reform”

that would deliver

“the housing the country needs.”

At the time, the Secretary of State for Communities and Local Government welcomed the

“action to get the house building industry building again”.

Two months later, the Government launched Firstbuy, promising

“a much-needed boost to our house building industry, supporting thousands of jobs across the country.”

In November 2011, the Government were at it again, launching the housing strategy. Do Members recall that it was described as the housing revolution? The Prime Minister and the Deputy Prime Minister donned their wellies, hard hats and high-vis jackets for the TV cameras as they promised

“to restart the housing market and get Britain building again”

with schemes, they said, that could create 400,000 jobs. All that with £420 million, but a tenth of what was cut the previous year by the Chancellor.

Not four months later, in March this year, the Prime Minister and the former Minister for Housing hit the airwaves again, launching the NewBuy guarantee and promising a

“boost to the housing market…and thousands of jobs in the construction industry”,

and yes, you have guessed it,

“to get Britain building again.”

So much has been promised—hundreds of thousands of jobs in the construction industry, hundreds of thousands of new homes, hundreds of thousands of new home owners—but what has been delivered? A contracting construction industry and collapsing housing starts, a growing housing crisis, a double-dip recession, and an array of announcements followed by a litany of failure. Can there be any more fundamental an indictment of failure than the fact that, at a time of economic crisis, when the Government have promised over and over again to build Britain out of recession, building starts fall quarter after quarter after quarter, pushing Britain back into double-dip recession?

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

What does my hon. Friend make of the announcement that we are to have yet more planning legislation, increasing uncertainty and almost certainly blighting a possible housing revival?

[Jack Dromey]

I will cover that in greater detail later, but my hon. Friend is absolutely right. The Government blamed the failure to build homes on the planning system and so tore the system up by its roots. We warned them of the consequences: damaging uncertainty, chaos, confusion and hiatus. Sure enough, the figures bear that out. The ink is barely dry on the new national planning policy framework, planted only four and a half months ago, but they want to tear it up once again and say that it needs fundamental reform.

[Bill Esterson (Sefton Central) (Lab)]

While my hon. Friend is on the subject, does he agree that changing the planning system is not the simplest and most straightforward way to revive the housing market, because currently around 330,000 new homes could be built with existing planning consents?

[Jack Dromey]

My hon. Friend is absolutely right. We meet regularly some of the major developers and building companies, and they all say the same thing. They have planning permission for in excess of 300,000 sites, and the figure is rising, but they simply do not feel that they can proceed, not least because of the state of the economy and the mortgage market. Again and again we have had those false dawns from this failed Government, and now once again Ministers will don their wellies and high-vis jackets. More schemes to get Britain building are promised, as if saying it will make it so.

[Andrew Bridgen]

I thank the shadow Minister for giving way eventually. May I draw his attention to the lamentable record on council homes in North West Leicestershire? The previous Labour-controlled district council left an awful legacy when it was finally turfed out of office in 2007: 70% of council homes were below the decent homes standard, one of the very worst records in the country. May I also draw his attention to the fact that it was this Government who found almost £21 million to bring all the council houses in my constituency up to the decent homes standard in the next three years, another example of this Government sorting out Labour’s housing mess?

[Jack Dromey]

Sadly, when we took office in 1997 we were confronted with a Conservative legacy of disrepair and neglect. We invested £19 billion to bring more than 1.5 million homes up to the decent homes standard, and I have seen in my constituency how that transformed the lives of the people in those homes. Some 75% of all tenants concerned had their homes brought up to the decent homes standard. Did the hon. Gentleman’s Government stick to that progress when they took office? No, they did not.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

I have been in this House for nearly 30 years, and the whole time we have been short of affordable housing, under Tory and Labour Governments, but Labour built less council housing than any previous Administration. The hon. Gentleman’s criticism would be more effective if he acknowledged Labour’s failure to put housing at the top of its agenda. The difference is that this Government understand that housing has to be at the top of their agenda.

[Jack Dromey]

A record of 2 million more homes, 1 million more mortgages holders, half a million more affordable homes and 1.6 million homes brought up to the decent homes standard is one that we can rightly be proud of. All I will say now, as I will say later on, is that in the here and now there is a pretty dramatic contrast between what Labour councils and Conservative-led councils are doing in building new council homes, taking advantage of the housing revenue account reforms, reforms that we pioneered.

[Mr Andy Slaughter (Hammersmith) (Lab)]

My hon. Friend talks about building new council homes; we wish we had that luxury. On Monday in Hammersmith, the Conservative council decided to knock down 760 newly refurbished council family homes and sell the land to a private developer, some of whose associates have been arrested in Hong Kong on fraud charges. Is that the localism of which the Government speak? The residents of those homes had voted three times for them not to be demolished—the last time by a majority of four to one.

[Jack Dromey]

My hon. Friend represents with great distinction a constituency with a council that has been a laboratory for some of the most right-wing, ideological Conservative thinking on housing. He is right to challenge that and to say that the rhetoric may be that of localism, but the practice is more like Leninism.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

My hon. Friend is right to focus his devastating attack on the coalition Government’s record on housing starts. When it comes to localism, they have also undermined local authority attempts to improve local housing markets. In Newcastle, 9,000 people are on the council house waiting list and there are 4,000 empty homes. Some 99% of those are in the private sector, yet the Government are making it harder for local authorities to bring empty private sector dwellings into public sector use.

[Jack Dromey]

My hon. Friend speaks with passion about her constituency and the problems she faces. All over the country, it is typical for there to be enterprising Labour local authorities. Would that we had an enterprising central Government who really believed in local government and its capacity to help build Britain out of recession.

I return to where I was. Perhaps I am being unfair on yesterday’s Minister for Housing. It turns out that he took it on himself to build, and with a dedication and passion that many would find hard to understand; he hid it, but he was beavering away, busy building—building up his following on Twitter. I hope that the new Minister for Housing will spend his time dedicating his full attention to the job. I advise him not to be obsessed with sending out press statements, as his predecessor was. If there were a new home for every press release from the last Minister for Housing, there would be no housing crisis. Perhaps he was trying to prove his prophecy, made from opposition:

“it’s easy for a housing minister to catch your eye with a headline, but much harder to deliver more homes.”

For once, he was absolutely right.

The new Minister for Housing is taking on a position of huge responsibility and national importance. Every Member knows the scale of the housing crisis and will have stories from their own constituency. I have never-ending queues of heart-breaking cases—young couples paying a fortune in the private rented sector, often in sub-standard accommodation, desperate to get a mortgage, which, if they could get it, would mean that they would pay less to buy a home. But they cannot get a mortgage.

Those on ever-lengthening council waiting lists are desperate to get decent accommodation. A couple with two young children came to see me; both burst into tears because of the impact that where they were living was having on their children. There are also the local small businesses. In my constituency, a man from the local construction company—a decent man, who had been in business for 25 years—came to me and said, “We just can’t get work any longer.” One in four young people in Castle Vale, an admirable community, is out of work. They are good young people, desperate for an apprenticeship in the building industry, but all their hopes are being dashed. They will find that this is a Government in complete denial as they spin a line that things are getting better; a Government who promised to get Britain building but are in denial about falling housing starts; a Government who promised to unlock the mortgage market but are in denial about the millions locked out of home ownership; a Government who promised that rents would come down but are in denial as they hit record highs; a Government who promised an “affordable housing revolution” but are in denial, with the previous Housing Minister hailing a 68% fall in affordable home starts and a 97% collapse in social housing starts as “rapid and dramatic increases”; a Government who once promised not to

“produce endless policies and initiatives that…lead to inaction”

or to

“repeat these mistakes of the past.”

The time for half measures and half-baked schemes is over. The CBI was absolutely right when it said that we face a national economic emergency. Rising to that challenge starts with the political will to put housing centre stage, both to meet growing need and to get a sluggish economy moving. The Government must put jobs, homes and growth at the heart of everything they do, not least because history tells us that economic recovery requires us to build our way out of recession, whether it was the eventual revival from the long depression of the 1930s or Britain’s post-war recovery when we built homes for our heroes on a massive scale. I know that on this, at least, the Business Secretary, the new Minister’s former departmental colleague, will agree with me, because he has said:

“Recovery requires a big expansion in social and private house building.”

He is in government, so the question is why are they not getting on with it?

The Government need to show the same determination that a Labour Government showed in 2008. When faced with a global crash as a consequence of the bankers crisis, we acted to keep people in their homes, unlike in the 1980s when the Tories presided over the heartbreak of mass repossessions, and we acted to build new homes.

[Justin Tomlinson (North Swindon) (Con)]

When the Labour Government came to the rescue, what measures did they insist were put in place to help first-time buyers with the nationalised banks?

[Jack Dromey]

Our record contrasts very favourably with what happened in the 1980s. We helped first-time buyers. I have been told time and again by building companies and developers that had we not acted in the way that we did, the industry would have fallen flat on its face.

[Mr Nick Raynsford (Greenwich and Woolwich) (Lab)]

Does my hon. Friend recall that in the recession of the early 1990s repossessions rose to very alarming levels and the Government of the time took virtually no action to prevent it? That contrasts with the action taken by the previous Government to halt a rise in repossessions and keep them at a much lower level than the industry was forecasting.

[Jack Dromey]

My right hon. Friend, who has a long and honourable track record on housing, is absolutely right. Tens of thousands of people are in their homes today because we took action when faced with those dire economic circumstances, in dramatic contrast to what happened back in the 1980s.

Unlike this Government, during the recession Labour rightly increased investment in housing to provide the homes that people need and to secure construction jobs. As well as providing funding to build 112,000 affordable homes, we created and maintained 160,000 jobs and 3,000 apprenticeships for young people. Yesterday’s Housing Minister will be familiar with those homes because, extraordinarily, the Government have tried to claim credit for them. However, as the National Audit Office has confirmed, of the 170,000 affordable homes in the next five years that he used to talk about, 70,000 were commissioned and paid for by a Labour Government. Labour is showing the same determination now as it did then, because we intend to put housing at centre stage of our economic recovery plan.

We understand just how important investment in house building is as a means of economic revival. We know that for every £1 of public money spent on house building, studies have shown that the economy benefits by up to £3.50. Money spent on building affordable homes is money saved as unemployed building workers are put back to work, young apprentices are taken on, and less money goes out on housing benefit. We know that in transmission time it is the quickest way to get a sluggish economy moving. Investment is the key.

The Government were absolutely wrong to cut £4 billion from the affordable housing budget in 2010, and no amount of press releases or half-cocked initiatives will fix that. That is why Labour has proposed bringing forward infrastructure investment, including for housing, and why we have called on the Government to use £2 billion from a repeat of the bankers’ bonus tax to fund tens of thousands of affordable homes, not least because public investment can lever in investment from elsewhere.

The National Housing Federation has said that public investment of £1 billion, matched by £8 billion from the housing associations, would build 66,000 shared-ownership homes for people on low to middle incomes, create 400,000 jobs and, in so doing, save the taxpayer £700 million in jobseeker’s allowance, not to mention the added savings from housing benefit and increased tax revenues. The NHF also predicts a boost in growth, generating £15.25 billion in the wider economy. The Government should commit greater investment now—we would—rather than leave it in the pipeline.

Next, the Government need to get the banks lending again. Small to medium-sized firms, including small builders, are crying out for investment, but the banks are not lending. Thus far, the Government schemes have failed.

The Government must also urgently consider the case, proposed by my right hon. Friend the leader of the Opposition, for a British investment bank. The German state bank, KfW, is a good comparison, and a British investment bank could support the funding of new infrastructure.

Next, the Government must encourage innovation among local authorities and housing associations. The Government took a welcome step forward by proceeding with Labour’s plans to free up councils to build the next generation of council homes through housing revenue account reform. Indeed, along with the Labour leader of Southwark council, Peter John, I launched its plans to build 1,000 new, much-needed council homes. The Government must now provide help and support to those innovative councils that are taking advantage of that reform to ensure that they use the headroom to maximise the number of homes built.

It seems that those most in need of support are Conservative-run local authorities. As a freedom of information request by my right hon. Friend the shadow Secretary of State for Communities and Local Government has demonstrated, Labour councils are building while Tory councils sit on their hands. A survey showed that five times as many social homes for rent are being built in Labour authorities than in Tory areas.

[Jeremy Corbyn (Islington North) (Lab)]

My hon. Friend will be aware that Islington council is planning to build 750 new council homes between now and 2015. He will also be aware that in inner-city areas such as mine, more than 30% of the population live in the private rented sector. Does he agree that it is past time that we had much tougher regulation of the private rented sector in the terms of tenancies, the longevity of tenancies, rent levels and, above all, the social and repair conditions that tenants have to live in?

[Jack Dromey]

The private rented sector has an important role to play, but not on its current terms. That is why in July we launched our initiative, which was supported by the sector as a whole, to regulate letting agents. That is why we will be bringing forward proposals on effective regulation of the sector. We have to tackle the lack of stability and security, and the ever-rising rents. That is why we will bring forward proposals to ensure that the decent homes standard applies in the private sector as well as in the public sector.

[Ian Mearns (Gateshead) (Lab)]

Will my hon. Friend give way?

[Jack Dromey]

I will allow one final intervention, but I will then move on so that as many people as possible can speak in the debate.

[Ian Mearns]

Is my hon. Friend aware that he has an ally in the new Minister for Housing on the regulation of the private sector? In 2007, he tried to introduce a clause into a Bill that would have regulated private letting agents.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

There are 19 people waiting to speak.

[Jack Dromey]

I agree with my hon. Friend. It is welcome that the new Minister for Housing has taken that position. Perhaps he will follow that through in government.

Investment in the private rented sector should be encouraged. Many of the measures in the Montague report—for instance, those on the use of public land, on attracting investment and on standards in the private rented sector—are welcome. However, we strongly oppose the proposal to further water down the affordable housing requirements that councils place on developers. Those requirements enable communities and local authorities to insist on affordable homes in mixed communities. Developers simply should not be allowed to build for the well-off only.

The Government should cut VAT on home improvements, repairs and maintenance to 5% to help home owners and small businesses, and to create jobs in construction and building supplies, from glass and bricks to cement. They should also implement a one-year national insurance tax break for every small firm, including building firms, that takes on extra workers.

The Government have continued with Labour’s drive to free up public land for house building, but they must go further. Innovative deals are being done, but we believe that it is appropriate for the Government to consider schemes to provide public land to housing associations and other developers free at the point of use, with payback over time. Such schemes would overcome the problem of the initial cost of land and get affordable house building going.

I referred earlier to the way in which the Government tore up the planning system. They are now returning to fundamental reform of the planning system. It was ludicrous to blame the planning system before they reformed it. It is laughable to blame it afterwards. The Government cannot seem to make up their mind. The Chancellor said on “The Andrew Marr Show” on Sunday that the city of Cambridge was a good example of how the new planning framework that they introduced earlier in the year is working. Later, on “The World This Weekend” the Business Secretary used the same example to suggest that house building is being held back by the current rules. We warned of chaos and confusion on planning—that seems to have spread to the Government.

[Mark Pawsey]

The hon. Gentleman persists in criticising the national planning policy framework. If it is not working, how does he account for the 13% increase in housing approvals over the past six months, compared with the previous six months?

[Jack Dromey]

I will come on to those interesting statistics. Under the planning system that the Government inherited, applications were overwhelmingly granted speedily and there was development land for in excess of 300,000 homes. The most recent data from the month following the NPPF’s introduction show that planning approvals fell by 37%.

The fact that homes are not being built is not the fault of the planning system. The principal problem is the failed economic and housing policies of the Government. To get Britain building again, we need to address the root cause of that failure—their failed economic plan, which has caused a lack of liquidity in the finance market, a shortage of mortgages for struggling first-time buyers, and the biggest squeeze on living standards in a generation.

Whether it is the economy or house building, the Government will always find somebody else to blame. The Chancellor blames the weather, weddings and bank holidays, and the last Housing Minister blamed the planning system and affordable housing. The truth is that the reason for the collapse in house building, the contraction in the construction industry and the double-dip recession is a failed deficit reduction plan that cut too fast.

We urge action in the motion that we have tabled. The Government’s failures in respect of housing are not just those of policy, gross though those are, but fundamental failures of leadership on an issue that is vital for the future of our country. If the Government really meant what they said about getting Britain building, they would have put housing at centre stage in their economic recovery plan and invested in it. They would have invested to build the homes that millions of families desperately need and to support those struggling to pay rent in the private rented sector. They would have invested in the future of our young people, helping them to achieve their dream of home ownership. They should be leading a real revolution in housing, building the foundations for Britain’s recovery. That is why we ask the House to vote today for real action to build Britain out of recession.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I am going to introduce a six-minute limit, which may have to go even lower due to the lack of time.

16:56

[The Minister for Housing (Mr Mark Prisk)]

I beg to move an amendment, to leave out from “House” to the end of the Question and add:

“welcomes the first Opposition Day debate on housing in this Parliament; notes that house building under the previous administration fell to its lowest peacetime level since the 1920s; further notes that house building starts in England were 29 per cent higher in 2011 compared with 2009; believes there is still more to do to get Britain building; further notes that housing is the most affordable for first-time buyers for a decade and mortgage payments are the lowest since 1997 as a direct consequence of the decisive action to tackle the deficit brought about by the previous administration; notes that the Coalition Government’s affordable housing programme will deliver 170,000 affordable homes by 2015 and leverage £19.5 billion of investment; and welcomes the steps being taken to increase house building and unlock stalled sites and the comprehensive programme to get empty homes back into productive use.”

Well, it has taken the Opposition two years. I am referring not to the speech of the hon. Member for Birmingham, Erdington (Jack Dromey) but to the fact that today I can welcome their finally having taken such an interest in housing that they have decided to hold their first Opposition day debate on it in this Parliament. Two and a half years and not a peep from them. I understand the hyperbole and enthusiastic language of the hon. Member for Birmingham, Erdington, but the fact that they have not been able to come up with their own debates about housing shows just how interested they are in the subject.

I thank the hon. Gentleman, of course, for giving me this opportunity on what is effectively my first day in the job to explain how the Government will reverse the housing problems that we inherited. However, I thought he was a little uncharitable about my predecessor, my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps), whom I thank. He showed a unique enthusiasm and energy, which I hope to match. As the hon. Member for Birmingham, Erdington said, I am a modest man. It was once said that if somebody is modest in politics it is possibly because they have a lot to be modest about, but I hope to be able to match my predecessor’s energy and ensure that we reverse the problems that we inherited from the last Government.

[Mr Clive Betts (Sheffield South East) (Lab)]

Will the Minister give way?

[Mr Prisk]

With respect, I would like to try to respond to the hon. Member for Birmingham, Erdington, and a lot of Members want to speak. I will give way in a moment, but I wish to canter through my speech, because this debate should be for Back Benchers as much as Front Benchers.

I note with interest a whole series of assertions in the Opposition’s motion. However, the fact cannot be ignored that under the Labour Government, house building fell to the lowest peacetime level since the 1920s. Labour had its nine different Ministers, its top-down targets and its 10 different housing Acts, but for all that activity it delivered very little. Maybe that is why it has taken it two and a half years to muster up the courage to have a debate on the subject.

In contrast, the current Government ensured that house building starts in England were 29% higher in 2011 than in 2009. Our No. 1 priority is to ensure that we reduce the Labour deficit and get the economy growing. We want to help local business people build vibrant neighbourhoods, set people free to create the places where they want to live and give them back the control of the planning system that they lost under the last Administration.

[Karl Turner (Kingston upon Hull East) (Lab)]

Does the new Housing Minister agree with the new planning Minister, who said that the Government should introduce a land tax?

[Mr Prisk]

If I have learnt anything on the first day, it is to stick to the information in front of me and not engage in idle speculation. I have yet not had the opportunity to meet the new planning Minister.

The hon. Member for Birmingham, Erdington was right to emphasise the economic issue—he and I know that from our backgrounds. The housing market has the potential to be a catalyst for the economy. For every 100,000 homes built, about 1% is added to GDP. The industry is labour intensive and it is important to ensure that that economic benefit is there.

[Mr Betts]

I congratulate the Minister on his appointment. Reference has been made to his predecessor’s gold standard, which he set out in a Select Committee hearing in response to a question that I asked. The Government agreed to a target of building more houses a year than the previous Government built before the recession. Is that still the Government’s target?

[Mr Prisk]

We are not in a position to take the view that we want to determine how the market works. We have Government programmes, and we will set targets for them that we can deliver. However, unlike the Labour party, we do not believe that Whitehall’s job is to run the marketplace. I want to ensure that, when the Labour party thinks about those issues, it recognises that the Government are committed to increasing the supply of housing and, as the hon. Member for Birmingham, Erdington mentioned, to addressing the long-standing, cross-party, intergenerational issue of affordable housing.

Last November, we introduced an ambitious package of measures through the housing strategy to boost house building. However, unlike the Labour party, we know that we cannot achieve that by trying to control the market from Whitehall. The old system of setting top-down targets for housing, with reams of planning guidance, did not deliver the houses we need or the places that people wish to live in. Our strategy is deliberately different from that. Instead of setting a top-down target from Whitehall, it is designed to lay the foundations for a systematic shift in the way in which the housing markets work.

[Mr Jamie Reed (Copeland) (Lab)]

In my constituency, homelessness is rising sharply. It has the biggest gap in the country between the average salary and the average house price. Will the Minister write to me about what specific help the Government can give me and my constituents to try to resolve that problem?

[Mr Prisk]

I will go further than that. I will meet the hon. Gentleman. It is my first day in this position and I want to know and understand the issues. My diary secretary may regret that, as I suspect that other Members will try to get in the queue. However, I would like to understand the issue before commenting on it.

Not adopting the top-down approach works in practice. For example, our investment of £4.5 billion in funding new affordable homes over the spending review period levers in £15 billion from the private sector to deliver those properties. That makes a total investment of £19.5 billion in new affordable housing, which will help us deliver 170,000 affordable homes by the end of the Parliament.

The Homes and Communities Agency has now reported that it has exceeded its targets for affordable housing this year, achieving a total of 51,665 affordable homes in England. Contracts have been signed for affordable house building in all parts of the country and across councils of all political colours.

Affordable housing is at the heart of our agenda. We have consciously sought to introduce initiatives to ensure that housing is the most affordable for first-time buyers for a decade. Mortgage payments are the lowest for 15 years as a direct result of our action to tackle Labour’s deficit. In July, Halifax noted that housing was now the most affordable for first-time buyers for a decade. Conservative Members are and should be proud of that record.

As the hon. Member for Birmingham, Erdington said, of course the challenge for first-time buyers is getting a mortgage. We understand that, and that is why we have launched the NewBuy scheme, which provides guarantees for mortgages of up to 95% loan to value for new build properties. That has already given a helping hand to prospective buyers who were otherwise frozen out of the housing market. The Home Builders Federation has estimated that NewBuy could deliver up to 25,000 additional new homes over three years.

The Government also introduced the Firstbuy scheme. Labour Members claim that we are not doing enough and criticise the initiatives. They need to decide what they actually want. The Firstbuy scheme supports capacity in the house building sector and is assisting almost 10,500 first-time buyers to purchase new build property in England by spring 2013. Interestingly, demand for the Firstbuy scheme has been strong. Official statistics published by the HCA show there had already been 3,000 Firstbuy sales by the end of March 2012, which is good progress.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

I join my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) in congratulating the Minister on his appointment, but will the Minister confirm the level of cuts applied to the affordable housing budget by the coalition Government?

[Mr Prisk]

With respect to the hon. Lady, the idea that budgets across the Government are impervious to or not involved with the deficit we have faced—[Interruption.] She has highlighted a point not only about the overall housing budget but about how that money is used. The point I was trying to make is that when dealing with affordable housing, it is not just about every pound we spend but about how we lever in other private sector funds, which is important. It is peculiar that the hon. Member for Birmingham, Erdington applauded that principle a moment ago.

We have reinvigorated the right to buy—supporting social tenants who want to own their own home. That is a policy of which the Government can, and should, be proud. We have reversed Labour’s cuts, and increased the right-to-buy discount cap to £75,000 across England from April. For the first time, every additional home sold under the right-to-buy scheme will be replaced by a new home for affordable rent, with receipts from sales recycled across the cost of replacement. I wish that the cultural opposition of Labour Members to this issue would reflect the reality. The right to buy promotes mixed communities and gives social tenants a financial stake in the well-being of their neighbourhood.

The hon. Member for Birmingham, Erdington mentioned the right to buy, and he might now be able to help. My understanding is that the Labour group on the Local Government Association opposed the right-to-buy scheme.

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

rose—

[Mr Prisk]

One moment. Does the hon. Gentleman agree with that group?

[Jack Dromey]

I am glad to answer: Labour is the party of aspiration. We support the right to buy, but the Government’s approach is fundamentally flawed, first because local authorities will not be able to retain all the receipts, and secondly because thus far it is inexplicable—perhaps the Minister can help—how the one-for-one promise will be delivered. Thirdly, there is absolutely no guarantee that if a home is sold in my constituency of Erdington, where there is a long waiting list, a new home will be built in Erdington. There are fundamental question marks about the Government’s approach.

[Mr Prisk]

I think that was, “Yes but, no but, yes but, no but.” It is interesting; I am delighted and will obviously want to talk to the LGA group to see if it shares the hon. Gentleman’s view. I hope it is the case that the entire Labour party will adopt the right-to-buy scheme and recognise that we should all be standing behind aspiring tenants. I would love to be a fly on the wall at the hon. Gentleman’s next meeting with the LGA Labour group.

Let me move on to the issue of building new homes. I am alert to the fact that time has passed, and I wish to ensure that Back-Bench Members have the opportunity to speak, especially given the ruling from Mr Deputy Speaker. In many parts of the country, there is a difficult housing market. We are under no illusions about that and one has only to look around the world to see housing markets in real difficulties. Much of that is a result of the financial consequences of the housing boom and bust that took place under the previous Administration.

That is why we have launched the £570 million Get Britain Building investment fund that will unlock stalled sites for up to 16,000 homes and hopefully create up to 30,000 jobs. In addition—we have had a lot of support from many Back-Bench Labour Members on this—we set up the £770 million Growing Places fund for local enterprise partnership areas to fund infrastructure projects that will help to unlock some of the more troublesome sites.

We are accelerating the release of surplus Government-owned land, with capacity to deliver up to 100,000 new homes on brownfield land to the benefit of communities around the country. The hon. Member for Birmingham, Erdington mentioned that point, and I shall look again at his representations. I must ask, however, why over 13 years the previous Labour Government did not do that already? Why did they wait until they were in Opposition and then try to lecture us on what should happen in the future? It is a shame, but I would always be happy to hear a positive representation on the issue.

[Bill Esterson]

I welcome the Minister to his new post. Does he agree with the Prime Minister and Chancellor on the need to build on green belt, especially given that his 2005 ten-minute rule Bill specifically showed his opposition to that? Does he agree with the Prime Minister and Chancellor or does he stand by what he said seven years ago?

[Mr Prisk]

The Prime Minister and Chancellor are not saying that. If I have learned anything, it is not to believe everything I read in the newspapers.

Alongside the measures I have just described, it is important to ensure that we help local areas, but not in the same way as the previous Government. For example, we could help those local areas that wish to deliver locally led large-scale new developments in a way that helps their communities. Unlike the previous Government, whose eco-towns were promised and never happened, this Government do not intend to dictate to people or impose on them. We want to work with them, which is an important principle.

Let me give an example of how that policy has worked. I pay tribute to my predecessor, because last week, the Government helped to unlock plans for 23,000 homes on the brownfield site of Eastern Quarry in Ebbsfleet. Those plans had been stuck on the drawing board for a decade, but the homes can now be built.

[Gareth Johnson (Dartford) (Con)]

That development, which is on a brownfield site in my constituency, is for 10,000 homes, which makes it one of the largest developments in Europe. Is the Minister aware that the idea was conceived in 1996, but that not one single home was built in the following 13 years? Only now are we seeing action on the Eastern Quarry development in Ebbsfleet.

[Mr Prisk]

Those 23,000 homes are testimony to the incompetence of the previous Labour Government.

[Simon Hughes]

I welcome the Minister to his new post and the Government’s commitment to delivering the housing that Britain needs. May I alert him to one issue we need to address? Recent figures show a lot of investment in housing that is for use not by occupants, but as investments by companies around the world. Properties are being built and bought, but not put into use. We need to ensure that the properties that will be built will be available for people to live in, and not held empty as investments to make money, which often goes abroad.

[Mr Prisk]

That is a perfectly sensible point, but I want to look at it in a little more detail and get to understand the issue. I am a chartered surveyor, so have perhaps the dangerous quality of a little knowledge of the subject I deal with as a Minister, but I want to ensure I understand the aspect to which the right hon. Gentleman refers, because the way in which the market works has changed.

With respect to interventions, many hon. Members wish to speak in the debate, so I shall make some remarks on the important issue of homelessness and then conclude. We want to ensure that we tackle homelessness and the problems of the most vulnerable. As the right hon. Gentleman and other hon. Members have said, the problem has been with us for many years. All Governments need to ensure that they are positive and determined to tackle the problem, but they also need to reflect on the fact that outside issues and complex causes underlie homelessness. I want to look, for example, at ex-service personnel and other groups with regard to homelessness, even if the Government have made important steps before I was able to take on the role of Housing Minister.

It is important to bear in mind that the statistics are not quite as bad as the hon. Member for Birmingham, Erdington painted—he was a little unnecessarily partisan. The statistics show us that homelessness is half the level it reached under the previous Labour Government and that it remains lower than in 28 of the past 30 years. I am under no illusion that there are things to do, but we have one of the strongest safety nets in the world to protect families and vulnerable households from losing their home. In addition, through the Government’s measures, councils have been able to help more than 13,000 vulnerable households to secure alternative accommodation when faced with the prospect of homelessness.

We are already taking action to help 50,000 households in temporary accommodation—all hon. Members will know of that challenge from constituents in that situation who have come to see them. We have consulted on a new power that will allow local authorities to use the private rented sector to house homeless families. That will mean shorter waiting times for homeless households and less time in temporary accommodation. Those with young children in particular will want the time they spend in temporary accommodation to be reduced—that is important.

I shall conclude now in order to allow as many Back Benchers as possible to contribute to the debate. The Government are working hard to substantially increase the supply of housing, from the low point of 2008-09. Our housing strategy combines practical measures with an understanding that Whitehall cannot, and should not, try to control the housing markets. Our work in helping first-time buyers, in freeing up the planning system and in unlocking stalled sites is all part of our commitment to enable more homes to be built. But we are not complacent. The global financial squeeze is continuing to impact. That is why, later this week, the Government will have more to say about how we can accelerate the progress already made in housing and infrastructure.

By tackling the deficit, we have built the foundation for a sustainable economy. We are now focused on getting houses built, providing more affordable homes and making sure that home ownership is affordable once again. I commend the Government’s amendment to the House.

17:15

[Mr Clive Betts (Sheffield South East) (Lab)]

Listening to the new Minister for Housing reminded me of the words of a previous Prime Minister: “Crisis, what crisis?” The crisis is that we should be building 250,000 homes a year, but we are building 100,000—and the number is falling. The average age of first-time buyers is rising, waiting lists for social housing are rising, rents are rising, homelessness is rising, and the number of houses we are building is falling. In my definition, that is a crisis.

The fact that we only built 50,000 social homes—or affordable homes, as the Government now choose to describe them, although not all of them are social homes or indeed affordable—in the first year of this Government, and only 15,000 last year, demonstrates the scale of the problem that we face. Last year, in my own city of Sheffield, we built two affordable homes. My hon. Friends the Members for Penistone and Stocksbridge (Angela Smith) and for Sheffield Central (Paul Blomfield) and I could each let those homes to completely deserving cases in the first half hour of any surgery we hold. That is the scale of the problem.

I do not claim that the 13 years of Labour government were perfect, or that we built sufficient homes. We had a reasonable record, but we did not build enough. However, the fact that we did not build enough makes this Government’s performance in building even fewer that much worse—and our performance is no justification for that. The Labour Government had an excellent record on the decent homes programme. There was a clear national target to deal with the £19 billion backlog of disrepair that has already been mentioned. We then allowed local authorities and housing associations to get on with the job of delivering that target at local level.

The reality for new construction is that the private sector—the major developers—has never built more than 150,000 homes in a year, and probably will not get near that number again any time soon. If we are going to hit the 250,000 target—and I hope we can get more homes built by the private rental sector and the institutional investors, and through self-build, as we saw on the Select Committee visit to Almere—we will have to build far more homes for social rent. We have to be brave. Whether this Government do it or a future Government, we have to set a target for 100,000 social rented homes a year. We delivered the decent homes programme and there is no reason why we could not deliver such a programme in the future.

The Select Committee recently published a report that said that there is no one silver bullet or magic solution to building sufficient homes. We did come up with several ideas that were agreed cross-party by all members of the Committee, but I was disappointed that the Government’s response dismissed or downplayed every single one. I ask the new Minister to go back and have another look, because some of those ideas are very appropriate.

At a time when we are trying to build more houses in this country and when, as I understand it, the Government are looking to underwrite investment in social housing, it is ludicrous that they do not even mention housing authorities or arm’s length management organisations as part of that programme, only housing associations. Of course, housing associations have a role to play, but why are we capping how much borrowing local authorities can do, when under prudential rules they could do more? These are the only form of assets against which local authorities cannot freely borrow to invest. Why is that rule there?

Why do we have these arcane Treasury rules that treat borrowing for investment in housing by local authorities differently from how it is treated in every other EU country, including not only Greece, which somebody might mention as a reason for not doing it, but Germany? Why not look at what happens there and why they are successful? Why not look at the historical grant of housing associations and how we can redefine that to allow them to borrow more money? Of course, we ought to support attempts by housing associations and local authorities to borrow in the retail markets, but a housing investment bank to build the money in the private sector and connect it with those who want to invest would be another major step forward that the Government could get involved in. It might need public subsidy or the sort of underwriting that the Government are now considering, but these are big ideas.

The idea of self-build, about which the previous Housing Minister was enthusiastic, needs a little Government support to fund pilots and get local authorities shaping up those schemes, as we saw in the Netherlands, but it could deliver tens of thousands of homes a year.

When in doubt, the Government tend to blame the planning system, but it is this Government’s planning system now—since the Localism Act 2011 and the changes in the national planning policy framework. They cannot keep blaming the planning system and creating more uncertainty about change, because that uncertainty will reduce the number of planning applications and slow down the whole system.

I hope that in due course we will have a further debate on the Select Committee’s report. It was an attempt to lay out several ways of getting house building going in this country, but the response was deeply disappointing. I ask the Minister to have a look at it, because it contained many ideas that, if put into practice, could move us towards the 250,000 homes a year that the country needs in order to solve its housing crisis.

17:21

[Robert Neill (Bromley and Chislehurst) (Con)]

I start by warmly welcoming the Minister for Housing, my hon. Friend the Member for Hertford and Stortford (Mr Prisk), to his new job and to a Department that I hope he will enjoy. It is an important job that he takes on, and I assure him that his task will be made easier by the support of an outstanding Secretary of State— I regard it is a matter of great pride to have worked with him for the past two years. So I wish my hon. Friend well. I know that he will continue the work the Government have already done.

With respect to the hon. Member for Birmingham, Erdington (Jack Dromey), who was always a courteous and affable opponent, I must say that there was more than a little collective amnesia in his speech and in the interventions from Opposition Members. I refer to collective amnesia because of the Labour party’s persistent failure over 15 or more years—throughout its time in government—to deliver on housing. I include in that its under-delivery of affordable housing. The net result was the lowest amount of house building in peacetime since the ’20s and—this is particularly troubling—a decline of about 421,000 in the amount of social rented stock available.

The Opposition showed collective amnesia in their assertion that we should place faith in local councils. I agree with that, but the Labour Government trammelled the ability of local authorities to take decisions on planning matters that were in the interest of and reflected the needs and priorities of their local communities. They also showed collective amnesia over the failure of their dirigiste, top-down, target-imposed system for delivering housing on the ground, and over the sometimes perverse impact that unduly rigid adherence to targets for affordable housing and other planning obligations had on the delivery of viable sites.

My hon. Friend the Minister knows that the Government have already started the important work of building greater flexibility into section 106 agreements. I hope that he will continue that work, because it is important to bringing forward more sites and keeping them viable.

[Mr Raynsford]

May I express my sadness that the hon. Gentleman is no longer on the Front Bench? I did not always agree with him in that role, but he was always a courteous and good Minister, and we miss him. However, may I also ask him to direct his claims of amnesia towards himself? He will recall from the debates on the Localism Act 2011 that, contrary to what he has said, under the last Government the output of new homes, according to the measure that his Department used to use to record the figure—and correctly so; that is, net additions to the housing stock—rose year on year until the recession, to 200,000 net additions in 2007. When does he expect the present Government to get anywhere near 200,000 net additions to the stock?

[Robert Neill]

I am grateful to the right hon. Gentleman for his comments. It is always a pleasure to exchange arguments with him. He must bear in mind the reduction in affordable homes of about 250,000 over that period. Whatever his intentions, the fact is that there was a consistent under-supply throughout the Labour Government, and we are now reaping the consequence.

[Angela Smith]

Will the hon. Gentleman give way?

[Robert Neill]

I have given way once and time is short, as I am sure the hon. Lady will understand.

The important point is that the current Government have started on the important task of rebalancing the planning system. I was privileged to undertake that work with my right hon. Friend the Member for Tunbridge Wells (Greg Clark) and it gives a strong basis for policy going forward. It was ludicrous that we had such a complex system of planning and, allied to that, the top-down imposition of targets, which were a positive impediment to growth, not least because they set communities against appropriate growth. That created a system of tension and antagonism, which the national planning policy framework rightly seeks to remove.

The final point that I should like to make in that context—and which I know my hon. Friend the Minister will take on board—is that we must look at planning and housing policy holistically. We should look at the interactions between housing policy and planning policy, and also at the need to give local authorities incentives to support sustainable growth—for example, through the way in which we are reforming the funding of local government finance. All three are parts of the same equation, if I may put it that way, and I hope that my hon. Friend will feel able to build on the work started in the Localism Act 2011 and the Local Government Finance Bill; I do not know whether he will inherit it, but I assure him that he will find it cheerful bedtime reading.

The reality is that this Government are removing blockages in the system. My hon. Friend the Member for Dartford (Gareth Johnson) rightly referred to the change at Eastern Quarry. That project had indeed stalled; it is also something that, in my responsibilities for the Thames Gateway, I had some involvement in, together with my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps). I should also say that the realism shown by the Conservative-controlled local authority of Dartford council was a major help. However, the irony is that the system we inherited from Labour did not allow willing parties to come together and renegotiate an agreement to produce a more realistic reflection of current market conditions. Our Government gave them that flexibility; they took advantage of it and now those homes will be delivered. Indeed, the first homes will be delivered this year, which I hope will be a matter of pride to everyone associated with the project.

I also hope that my hon. Friend the Minister will continue to build on the work that we have already seen with the Growing Places fund. There will be sound arguments to consider if in due course we are able to roll it out further, into the type of revolving infrastructure funds that have been talked about by informed sources in many parts of the industry. I also hope that he will continue to look at refinements to the operation of the community infrastructure levy—the CIL—so that it is a positive incentive to development and brings a genuine benefit to local communities. Again, however, we should look at some of the technical detail. For example, there are some excellent schemes, such as the one developed by Pocket in London, that do not require any public subsidy, yet they can face difficulties because they do not count as affordable housing under the CIL rules in the same way that they do under planning policy.

Those are some small but important matters that I hope my hon. Friend the Minister will take on board. I know him to be an enthusiastic Minister and a good colleague. I assure him that I shall be more than happy to support him in everything he does and I wish him well.

17:29

[Mrs Linda Riordan (Halifax) (Lab/Co-op)]

It is a great pleasure to follow the hon. Member for Bromley and Chislehurst (Robert Neill). I should also like to welcome the Minister for Housing, the hon. Member for Hertford and Stortford (Mr Prisk), to his new position.

The facts are stark. Millions of people are on waiting lists for social and affordable housing. New house building is down, there is little investment in the construction industry, and companies are crying out for policies that will kick-start their order books and the economies of local areas such as Halifax in order to get people back into work.

Over the past few months, I have been working with Marshalls plc, a company in my constituency, and the unions Unite and the Union of Construction, Allied Trades and Technicians, to try to get new policies put in place to stimulate the economy. The construction industry, in which Marshalls is a major player, should be at the heart of any economic recovery. Indeed, on 3 July, I tabled an early-day motion calling on the Government to back the Get Britain Building campaign. The campaign has three simple but important aims. They are to encourage the building of affordable housing, the stimulation of home improvement with a cut in VAT and investment in infrastructure.

The Government should start to do those things today. Any economic recovery must be demand-led, with the construction industry at its heart. Such action could be a catalyst for economic recovery. I am sure that the Minister would acknowledge that every £1 invested generates £2.84 in economic activity. The message is simple: get building, and do it now. It cannot be right, in a country such as ours, for millions of people to be on the social housing waiting list. Any Government who want to call themselves progressive should measure their success or failure by their housing policies.

[Gloria De Piero (Ashfield) (Lab)]

We have hundreds of people on the waiting list in Ashfield. We need not only the new homes but the jobs as well. We are also lucky enough to have a lot of green spaces there, and we would like to keep them green. Does my hon. Friend agree that, wherever possible, it is always best to build those homes on brownfield sites?

[Mrs Riordan]

I absolutely agree with my hon. Friend. Many such brownfield sites have been identified as suitable for building on.

On the evidence of the past two years, the coalition Government are failing miserably. Since 2010, hardly any new houses have been built in Halifax and Calderdale. Indeed, only six new houses were built in the last quarter. It is no wonder that first-time buyers in my constituency are so frustrated. The lack of policies for growth in the north gives economic and social resources to the south, and the problem becomes one of a cycle of more job losses. I hear Conservative Members constantly calling for more growth-led policies in the south-east. If they think that the problem is bad within the M25, they should try heading north of the Watford Gap to see the effect of the lack of growth-led policies there.

[Stuart Andrew (Pudsey) (Con)]

I fear that the hon. Lady is being slightly disingenuous. After all, this Government have announced the biggest investment in transport infrastructure across the north of England. The northern hub will involve huge investment in railways, which will provide people in all parts of northern England with jobs that would not have existed under the previous Government.

[Mrs Riordan]

I am sure that the hon. Gentleman would agree that there is a vast difference between the transport infrastructure in the north and the south, but that is a matter that we have already debated today. We certainly need investment.

The lack of housing and the lack of stimulus are causing difficulties for my constituents. There are hundreds, perhaps thousands, of hard-working, skilled people in Halifax who are looking for employment. It is time to give the businesses, especially construction firms, the necessary economic tools to get on with the job.

I have had hundreds of letters backing the Get Britain Building campaign. Dougie Wood and Chris Haigh are two men who are passionate about the company they work for. It was they and their colleagues who, through leading the campaign for Marshalls and Unite, led me to arrange a meeting with Mervyn King, the Governor of the Bank of England, during the recess. Following that meeting, there was a meeting with a member of the Chancellor’s team, together with the Marshalls director, Unite and the Union of Construction, Allied Trades and Technicians. We took with us a list of shovel-ready projects as suggested by the Governor of the Bank of England. We stressed that it is no good giving more money to banks that are not lending to companies such as Marshalls. The directors of Marshalls, a company based in Halifax for more than 130 years, stressed to both the Governor of the Bank of England and the Chancellor’s team that times have never been as bad for the company in all its history as they are now.

I cannot work out whether the Government have fully grasped the nature of the social housing shortage. If they have, we really are in trouble, as nothing has been done about it in the last two years. If they have not, now is the time to increase the affordable housing budget, to tax the bankers’ bonuses and to get people, and especially young people, back into work. It is time for the Government to start listening, taking some action and investing in the housing industry, and to get places such as Halifax, which have been hit hard by the double-dip recession, working again.

17:36

[Annette Brooke (Mid Dorset and North Poole) (LD)]

I start by congratulating the Minister on his new position. In this short speech, I would like to acknowledge what the coalition has done. I do not know what the promised announcements will be, so I would like to comment on what I would like to see and what the Liberal Democrats would like to push for in the future. Throughout, I feel that we need to acknowledge that some of the problems we are discussing have indeed gone back over decades and under all previous Governments.

Just to keep up with the rate of household formation, we need between 206,000 and 282,000 additional homes each year between now and 2025, yet the average number of new homes added to the housing stock each year in England over the last two decades has been just 160,000 and is currently even lower than that. It is quite clear that we have not met housing need. We need to think about housing demand, too, because the fact that people cannot access mortgages at the moment is another cause of reduction in demand. There is a shortage of mortgage finance, which I feel has to be addressed. I acknowledge, however, that the coalition has done much to help first-time buyers.

I want to concentrate on the supply side, while acknowledging that both demand and supply are important to the issues we are addressing. Undoubtedly, investment in housing would provide an important kick-start to the construction industry, and hence to the economy. We know of the massive multiplier effect of everything spent internally in our country on the construction industry. It is a win-win situation, with more jobs and more money created for our own economy, without particularly sucking in imports.

Social housing waiting lists have grown by 70% over the last 10 years. Over 1.7 million families are stranded on housing waiting lists, yet social housing stock has fallen by 420,000. We have seen very little council house building. My hon. Friend the Member for Colchester (Sir Bob Russell) repeatedly questioned the last Government on that point. We want to see councils building more.

The coalition Government have taken some significant steps to give local authorities more freedom to raise more money in order to invest in their local areas—for example, the new homes bonus, tax increment financing and the community infrastructure levy. Reform of the housing revenue account is also important, as it leaves local authorities free to determine how housing revenues are invested. However, there is the cap on borrowing, and I agree with previous speakers that we should be looking to lift it and secure more powers for local authorities to borrow and invest in councils. Securing private finance is critical, and we need to explore further how the long-term investment needs of pension funds and insurers can be met through housing.

The coalition Government have increased local authority new build. We have the new homes bonus, the one-for-one replacement condition attached to the right to buy, and the new “affordable rent” model, which will provide 170,000 new social and affordable homes. However, as a Liberal Democrat I should like more local rather than centrally led decisions to be made on the right to buy.

The coalition is taking steps to provide more land for development by freeing up public land and trialling land auctions to enable more homes to be built, but I am sure that more can be done. For instance, there are 300,000 or 400,000 existing outstanding planning permissions. I think it outrageous that, when planning permissions have been granted, developers come back wanting to intrude on our green belt. We need a stronger “use it or lose it” policy on planning. That is a Liberal Democrat point, by the way. We should also think about the environmental impact of housing. The challenge is to deal with the dilemma of quantity versus quality. It is more expensive to provide homes that meet renewable and energy efficiency conditions.

I congratulate the coalition on its empty-homes policy. We have taken big steps in this regard. There are 720,000 empty homes in England, 279,000 of which are considered to be long-term empty properties. Under the last Labour Government, there was no dedicated source of central Government funding to tackle empty homes, but the coalition Government have established a £100 million empty homes fund and some really good schemes to help people to return empty homes to use. The new homes bonus is paid in such cases, and there is also an empty homes premium. I pay tribute to my hon. Friend the Member for Hazel Grove (Andrew Stunell), who initiated the premium, and congratulate him on the work that he did in the Department for Communities and Local Government. I also pay tribute to the hon. Member for Bromley and Chislehurst (Robert Neill).

17:42

[Yvonne Fovargue (Makerfield) (Lab)]

Thank you for calling me, Madam Deputy Speaker. I, too, welcome the Minister to his post.

I want to discuss some policies that have not yet been mentioned. The first is the bedroom tax, or under-occupation penalty, which is blatantly unfair to social housing tenants. Many of them have lived in their properties for a considerable time and regard them not as housing stock assets but as their homes—homes with memories, in which they have built their lives surrounded by families and friends. Leaving that aside—if it can be left aside—I have to say that this blanket policy shows absolutely no understanding of the mix of housing stock in boroughs such as Wigan. Members of Wigan and Leigh Housing, my local housing trust, came to London to meet the previous Housing Minister—who has, shall we say, gone on to higher things—to explain the current predicament.

Wigan has an over-supply of three-bedroom properties, which constitute about 50% of our social housing stock, and not enough one and two-bedroom properties. More than 4,300 of our 22,500 tenants will be affected by the under-occupation penalty, and they will have no real choice. They must pay the penalty, or move to private rented properties that will cost more. It has been estimated that if only a quarter of them want to move, it will take 10 years to re-house them at the current rate. In the meantime, how are they to pay the penalty? There is already concern about the rise of the payday lenders among tenants of social housing. Our tenants are taking out payday loans to maintain their household budgets because of the increased costs of food and fuel. Wigan has been described as one of the most car-dependent communities in Britain: people need their cars in order to get to work.

All those problems will be compounded by the bedroom tax, which will force residents to pay at least 14% for one extra bedroom and 25% for two. It should not be forgotten that housing benefit is an in-work benefit which is paid to hard-working people on low incomes, or to pensioners who have worked all their lives with little or no occupational pension. The bedroom tax will add a further pressure to their already overstretched income. It will push them into the outstretched arms of the payday lenders in order to cover their day-to-day living expenses, causing them to fall into a spiral of debt.

What point is there in forcing my constituent who is a single dad who has his two children at the weekends to move into a non-existent one-bedroom property? How will that help the family? If he does not move, he will be charged to remain where he is. How will his financial contributions to his children’s upbringing be maintained? This is both unfair and unworkable.

How will forcing the grandparents who came to see me to move into a one-bedroom property help their family? They look after their grandchildren at the weekend so their mum can work. They are all doing as the Government wish by supporting their family, but they will be forced to pay for that. That is not justice or fairness; it is taking money from those who can least afford it.

I have mentioned how difficult it is to balance the family budget, and another measure may well add to that problem: the payment of housing benefit to the tenant rather than directly to the landlord, where the tenant wishes. I have had direct experience of that, as I was involved in a pilot scheme with the private sector when the private sector tenants were paid direct. Our local authority was so concerned about this matter that the Labour government gave additional money to pilot areas in order to work with the private tenants on budgeting and opening bank accounts and to identify their vulnerabilities. That work was greatly needed. An independent assessment of the pilot credited the success of that St Helens scheme to the intensive work done by Citizens Advice locally. However, no extra money will be given for that work in future, and Wigan and Leigh Housing and its tenant representatives are very concerned that payment arrears will result if this scheme is introduced without proper financial guidance and support on money management. They also fear that there will inevitably be evictions and a rise in homelessness, and Crisis is also concerned about that.

I am also concerned about the extension of the shared accommodation rule to the under-35s, as that will also exacerbate the homelessness problem. Wigan and Leigh Housing is working with Citizens Advice to assist people affected by this rule by drawing up property lists and trying to match properties and individuals, but people are rightly concerned about moving into shared accommodation with others whom they do not know, and some are saying, “Actually, I’d rather sofa-surf than do that.”

These changes are individually harmful, but they are cumulatively disastrous, and they show no understanding of the northern towns and their people, or their problems. They will not create sustainable and supportive communities. Instead, they will hit individuals who are trying to do the right thing. Debt levels will increase, and the payday lenders are already circling my estates, waiting to prey on people being forced by the Government to pay to have a family life in their own community.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Some 13 Members still wish to speak, so I shall now reduce the time limit on speeches to five minutes. I hope that, with a bit of tolerance on all sides, that will enable everybody to speak, but the more interventions—and therefore time added to speeches—there are, the less likely it is that those towards the end of the list will get a chance to contribute to the debate. There is nothing further I can do about that; it is now in Members’ hands.

17:48

[George Hollingbery (Meon Valley) (Con)]

I hope colleagues will forgive me if I ramble through my remarks fairly swiftly, as I have quite a lot to get through.

The lack of housing for British people is of great concern to all of us, and we have to ask ourselves why sufficient homes are not being built. It is a simple matter of economics. Interest rates may be low, but the country is deleveraging. Private individuals are very cautious about increasing debt, which means fewer individuals are looking to buy. Banks are strengthening their balance sheets, and reducing their risk profiles and setting aside capital. The ultimate consequence is that there is a smaller pool of people who want to borrow, and fewer of them are qualifying for borrowing, and less money is available to lend to them. In short, this all boils down to a reduction in the amount of capital available to build homes. Is it any wonder, therefore, that house building numbers are falling?

Although £19.5 billion of public and private funding is currently lined up to be spent on affordable housing by 2015, there is very little land to build it on. That land relies on section 106 agreements from private housing developments and they are not happening.

Back in the earlier part of this year, the Chairman of the Select Committee, the hon. Member for Sheffield South East (Mr Betts), proposed that we reported on the financing of new housing supply. That report was published in May. The broad conclusion, as he has already said, was that there was no one silver bullet with which the housing deficit could be removed. The crucial question is now what can be done and whether the Government are acting on the possibilities.

A number of options are available to the Government and action has been taken on some. First, crucially, we must keep interest rates under control. We are borrowing internationally at the lowest interest rates in history and that is a crucial part of the package. Any serious upward tick in rates would almost immediately increase the strain on existing owners through their mortgages, reduce the already low level of building and price further prospective owners out of the market. The clear implication is that any measure that added significantly to the debt burden the country is carrying would be likely to be entirely counter-productive in the medium term and might even reduce the number of houses available.

Secondly, the Government can look to their own assets. They can provide public land for development, such as that brought forward under the “Buy now, pay later” scheme, which has been widely welcomed. Grainger plc said that that would help it run a build-to-rent programme. The Association of Greater Manchester Authorities reported to us that it was actively investigating investing its pension funds in rental accommodation on land that it would provide, with both funds coming together to make a cohesive package.

The Government can provide guarantees to lenders and borrowers, and we have heard a great deal about that with the announcement of the Get Britain Building programme and the Firstbuy equity deal. We have had the NewBuy guarantee and just at the beginning of August the funding for lending scheme was announced. That is an 18-month programme to allow almost unlimited borrowing by swapping assets for funding from the Bank of England to invest in small businesses and lend to private individuals to buy homes.

We can also return the control of local council housing assets to councils. That programme was started by the previous Government, and I salute them for doing so. The Smith Institute said that £25 billion of real-terms investment will be made available for housing through that change. I have concerns, shared by the Chairman of the Select Committee, about debt caps, which we ought to re-examine, and the sharing of debt limits across councils. It seems to me that there is extra capacity in the system that could easily be brought into play, allowing us to build more social housing.

There are the new rules on right to buy, but care must be taken to replace not only one for one, but, if at all possible, like for like in the area in which property was sold, particularly in small rural villages. New council developments to be let at a discount on market values can also be very valuable. We took evidence that the affordable rent programme will make a contribution; it will be limited over time and geographically and there will be restrictions, but it will help in the end.

I will end there, but there is no doubt that we are at the end of the tail of an extraordinary debt crisis, which was left to us by the previous Labour Government. Essentially, that legacy of debt restricts the amount of capital available in the marketplace and the options available to the Government. I believe that they are doing all they can within the envelope for borrowing and I commend them for what they do.

17:53

[Simon Danczuk (Rochdale) (Lab)]

It does not take a genius to recognise that investing in construction at a time of economic difficulty can have a positive impact. The Secretary of State for Business, Innovation and Skills said in June:

“The experience of the 1930s tells us, however, that it is possible to build, and grow, out of deep economic crisis without abandoning deficit reduction.”

Even in the Government, there are people who believe that house building is a key part of getting the economy going. Even the Prime Minister said last November:

“We will restart the housing market and get Britain building again.”

The only problem is that the Prime Minister did not tell us when he would restart that housing market.

House building is in decline. The Government have used up all the house building credits bequeathed to them by the previous Labour Government, and now that they are having to rely on their own policies, house building is falling. Affordable housing starts have declined by 68% over the past year. Overall house building has decreased by 10%. That shows that the Government have failed. They have not used house building to stimulate our economy, which is part of the reason why Downing Street has taken us into a double-dip recession.

In many ways, Downing Street has failed to listen to the Secretary of State for Business, Innovation and Skills—it could have used construction to drive the economy forward. Having said that, the Secretary of State has also been part of the problem, ably accompanied by the new Minister for Housing and the BIS team: they have pushed us towards a bank lending crisis. The new Minister for Housing, when part of the BIS team, introduced Project Merlin, which failed. They then tried a loan guarantee scheme. That failed. They then tried funding for lending. That has failed. Two and half years into their time in government, the banks still are not lending.

It is the same story in housing—NewBuy, Firstbuy, the new homes bonus and the Growing Places fund; the list goes on—but what we do not have is a co-ordinated effort to get people taking up mortgages and to get houses constructed for them to move into. In practically every aspect of housing policy, there has been failure.

There are people in Rochdale crying out for social housing and for jobs. If the Government had got their housing and lending policies right, we could have had the construction jobs and the homes in places such as Rochdale. Sadly, we have neither. If that is not bad enough, the Government are dismantling the housing safety net that helps many people. More people are becoming homeless. It costs more to help people who are homeless than it would to stimulate the housing economy and support the housing charities that support homeless people.

My hon. Friend the Member for Makerfield (Yvonne Fovargue) mentioned the bedroom tax. People on housing benefit will have to pay a supplement to stay in their home or they will have to move out. One important point regarding the bedroom tax, which I do not believe the Government have considered, relates to community cohesion. Rochdale is a case in point, although this will apply to many towns and cities across the country. The bedroom tax will mean that many people who have lived on council estates for many years, and brought their children up on those estates, have to move out. Owing to the demographic changes in places such as Rochdale, it is inevitable that a perception will build up that members of one community are being forced out of their home for the benefit of those from another community. I ask the Minister to address that issue of community cohesion, because it will cause real problems and there is the possibility of its being exploited by the far right.

I ask the Minister to take a sober view of housing policy and urge him to use housing and house building as key drivers to create jobs and re-establish the economy that we desperately need in Britain.

17:58

[Mark Pawsey (Rugby) (Con)]

After listening to the measures outlined by the new Minister at the Dispatch Box, no one could accuse the Government of being negligent in their approach to house building. That contrasts with the record of the previous Government. The number that was not on the tip of the shadow Minister’s tongue when I intervened earlier is 78,340, which is the figure for new houses started in the last full year of the previous Government. It was given to the House by the hon. Member for Hazel Grove (Andrew Stunell). The shadow Minister told us that he is happy to support the record of the Labour Government, but that number pales into insignificance when we consider the fact that in 2011, the first full year of the coalition Government, 98,250 houses were started—a rise of 25%. Those figures make the motion ridiculous as it claims that housing starts are down.

We all agree, however, that we need to build more houses. Statistics from the industry analysts Glenigan have been published today in The Daily Telegraph, under the headline “2,000 new building projects approved every month since planning shake-up”. The article goes on to detail how the proportion of planning applications that are successful has increased by 8% since the introduction of the new national planning policy framework, from 73% in November 2011 to 81% in March 2012, leading to more consents in total, from 75,000 to 85,000. That is 10,000 more consents, or 13% more approvals.

[Nigel Adams (Selby and Ainsty) (Con)]

Does my hon. Friend agree that 10,000 additional consents could mean an awful lot more properties, because some consents will be for many dozens, if not hundreds, of properties?

[Mark Pawsey]

Absolutely. The national planning policy framework is starting to bear fruit, so it was disappointing to hear Labour Members criticise the changes.

Planning delays have been stifling house building. I want to focus on planning guidance and the delays that planning applications consultees continue to be able to cause in the development process. The Government’s consultation paper on statutory consultees drew attention to 27 external bodies. It stated:

“This can mean authorities are reluctant to determine applications without input from these key bodies.”

That is where planning delays come in. I refer to my own constituency of Rugby where, I am proud to say, we have a very positive attitude to housing development and recognise the need to grow to provide accommodation for new households. Work has just started on the Gateway site, which will provide 1,300 new homes.

In addition, over a period of time landowners have been working on proposals for a major house building site that will generate 6,200 homes—the former BT mast site. It is just the kind of development that the Government recognise as necessary to provide housing and, as Members across the House have indicated, move the economy forward. So what is the problem at the mast site? Even though the development complies with the local core strategy and the land was previously developed, the proposals are being slowed down, in my view needlessly, by stakeholder agencies such as Natural England and English Heritage, which are concerned about their own single issues, which I believe are being given disproportionate weight.

In a second case, a constituent has applied to develop a site adjacent to a pond. As a result, a full newt survey has been requested before development can proceed, even though it is known that the habitat does not and cannot support newts. Again, that is holding up development. Even post-NPPF, external bodies have the powers to frustrate development. The NPPF was a good start, but there is still much more to do, and the Government recognise that in the new economy Bill, which will focus on reducing the time allowed for repeals and reviews, among other things, and help both development and the economy.

The substantive motion states that

“the Government needs to take urgent action to get the economy and house building going again”.

They have and they are. I congratulate the previous Housing Minister on all his hard work in supporting the housing industry and look forward to the new Minister taking the Government’s agenda forward. Knowing his previous ministerial role on business, I have every confidence that the Government’s housing strategy is in safe hands.

[Rehman Chishti (Gillingham and Rainham) (Con)]

Does my hon. Friend agree that many Conservative local authorities, such as Medway council in my constituency, are building far in excess of their affordable housing targets, which clearly shows that there is a massive increase in housing development in certain parts of the country?

[Mark Pawsey]

I happily agree with my hon. Friend. It is great that there are authorities that are willing to deliver houses, but they remain frustrated by the issue of consultees. I very much hope that the Government and the Minister will pay particularly close attention to the issue in the coming months.

18:03

[Mr Nick Raynsford (Greenwich and Woolwich) (Lab)]

May I first draw attention to my interests, as declared in the register?

I intend to focus on three themes. First, I will debunk some of the myths and, frankly, the abuses of statistics that we have heard today from those on the Government Benches. Secondly, if time allows, I will offer my analysis of why we face this dire situation. Thirdly, I will suggest one practical way the Government could and should act to start new house building and help to get us out of the mess.

The Government know that the housing situation is dire—their own statistics tell the story clearly—but rather than face the facts, they have been pretending, through what is, frankly, a shameless abuse of statistics, that the picture is rosier than it really is. The former Minister for Housing was at it all the time and the Prime Minister was at it today, claiming during Prime Minister’s questions that housing starts were up. The Government amendment to the motion repeats the error and even the new Minister for Housing, for whom I have great respect and whom I welcome to his post, repeated the same incorrect claim.

The only way in which the Minister can justify the completely non-credible claim that housing starts are up is by comparing the latest figures with those for 2009. Why 2009? There is no statistical justification for plucking out of thin air a year that simply produces a good outcome. It is as if a Health Minister, faced with an epidemic, chose to compare fatalities during their period with those of 1348, when the black death was ravaging the country.

The truth of the matter is that 2009 was the depth of the recession and the figures were very low, but they recovered because the Government of the time had put in place measures to help recovery. The second quarter of 2010 was a significant period because government changed hands. I do not think that this Government can claim, although the previous Minister for Housing tried to, that the figures for that quarter were their responsibility, but by that quarter, starts were back up to 33,000.

If the new Minister looks at his figures, as I hope he will—his officials will be able to guide him on this—he will see that in no quarter since then has that figure been exceeded. In the latest quarter, the total number of new starts was just 23,000—10,000 fewer than in the second quarter of 2010. Can we put an end to that abuse of statistics? Yes, the recession had a dire effect, but we were coming out of recession when the Government changed, and since then housing has been flatlining at levels hopelessly inadequate in comparison with the need for new housing. We have to find ways of stimulating new growth.

Time is limited, so I shall go to my final point—my modest suggestion about how the Government can get some new house building started. The Minister will know that the worst hit area has been social housing because of the serious cuts made in the early months of the coalition in the social and affordable housing programme. That has drastically cut back investment in new social and affordable homes. I support the Government’s measures to try to lever in more private finance, although there are disadvantages to do with rent levels, which will have knock-on consequences for housing benefit. The measures are nevertheless an intelligent way of trying to get as much building as possible. However, Government investment is not adequate or sufficient.

I know that the Government will say, “We can’t put any more money in,” so let us look at what is not being well spent at the moment. There it is, in the Minister’s own Department—he has only to look at his budget to see £250 million a year, over the next three years, allocated to the new homes bonus. I wholly disagree with the hon. Member for Mid Dorset and North Poole (Annette Brooke), who spoke earlier about the bonus. It gives absolutely no benefit at all—there is no evidence to show any positive impact that it has had. The scheme itself is opaque. The linkage to the granting of planning consent, which it is supposed to incentivise, is so tenuous that, not surprisingly, no serious commentator believes it is having a beneficial effect. But it is very expensive, costing £250 million a year over the next three years.

If that money were reallocated to direct investment in social and affordable housing, that could help to get things going. Linking schemes for social investment with private investment and mixed developments would help give greater confidence in the market as well. Steps can be taken, but they require the Government to be intelligent in their use of money and recognise that they have to find ways of investing to get us out of the serious mess we are in.

18:08

[Mr Mark Spencer (Sherwood) (Con)]

I want to focus briefly on three issues that are having a big impact in my community—what type of houses we build, where we build them, and how many we build. Those are the three crucial aspects to the whole debate and they are having an enormous effect in my constituency and community.

I shall start with the issue of how many houses. The Secretary of State is not in his place, but to his credit the first thing he did was abandon the disastrous regional spatial strategy figures that were having such a detrimental effect on the green belt in and around the city of Nottingham. Some of my local authorities are resting on those figures from the regional spatial strategy. I sincerely hope that the Minister can find ways of convincing them to reconsider the numbers of houses they are going to plonk in the green belt and focus on where and how those houses are being developed because they are having an enormous impact on the sustainability of the local communities. Where windfall properties appear because a petrol station or public house becomes redundant and is redeveloped, some local authorities do not take those figures into account but continue to push up their housing ambitions, and that has a big impact on the green belt.

Let me deal next with what we are building. It is very important that we build houses that are appropriate to the communities in which they are placed. An elderly resident in a rural village location who is living in a three, four or even five-bedroom house might want to relocate in the same village, but if it has no elderly people’s accommodation they will be forced to move away from the community in which they have established their life, family and friends, and connections. If we can find ways of building elderly people’s accommodation within those village envelopes, that will allow people to move out of the larger house and into another property, thereby freeing up the property ladder below them. We do not want to force people out of their homes, but we need to encourage them to stay within their communities. By the same token, in former coalfield villages where the average size of a house is two or three bedroom, there is little point in allowing developers to build four and five-bedroom houses, because they do not slot into those communities.

The most important issue is where houses are built. Some of my local authorities are not targeting brownfield sites. They should be developing former coalfield sites such as those in the borough of Gedling, but are instead putting their housing allocations in the green belt around the villages of Linby and near the town of Hucknall. There is funding available to address this. The previous Housing Minister developed a scheme whereby such brownfield sites could be unlocked because of the need for access roads and other infrastructure projects. Despite my writing to my local borough council to ask them to tap into that fund, it has decided not to do so but to allocate its housing allocations in the green belt. That is a tragedy for some of these villages, because the infrastructure cannot support what is there already, never mind the new housing. The village of Blidworth is the only local village entirely encircled by the green belt, and it already suffers enormous infrastructure problems regarding access to the road network, but, for whatever reason, the council has decided to allocate it an enormous amount of housing, causing a great deal of stress and tension for individuals.

This is about getting right what we are building, where we are building, and how much we are building. I believe in localism, but sometimes my local authorities do not make the right choices.

18:13

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

I congratulate the Minister on his appointment to what must be one of the most exciting jobs in Government. He will be at the heart of improving our economy by building more homes, and I am sure that it will be a really exciting period. I thank my hon. Friend the shadow Minister for calling this debate at such an apposite time.

I would like to ask the Minister to reconsider the introduction of the provision in section 124 of the Localism Act 2011, on the forced discharge of a family into the private sector if they are homeless. As the law stands, if a family are recognised as being homeless, they can be offered a property in the private sector, and they can be discharged to it if they accept it, but they do not have to do so. Under the provision, they would have to accept it. My reason for opposing the provision is not in any way because I am anti-private sector; it is because I believe that we should do everything we can to ensure that work pays. Work is the best anti-poverty strategy that anybody has ever known. It represents a moral good for individuals, helps them stay healthy and gives a good example to their children. The provision will force working families into a benefit dependency from which they are unlikely to ever be released.

I want to detain the House with three or four examples—depending on the time available—of how that would affect people in my constituency in south-west London. Although it is an expensive area compared with some other places in the country, it is certainly not in London terms. In the first example, Mr Brown is a postman and Miss James works in an after-school club where her two children go to school. They have an income of £26,000 a year, which is roughly £500 a week. If they were discharged to the social sector, the median rent for a two-bedroom property would be £95 a week. On their income, they would not be entitled to any benefit—they would be discharged, off benefit and would have to pay their rent.

If that same family on the same income were discharged to the private sector, the median rent would be £196.15 a week. On their same earnings, they would receive housing benefit. Even if their income increased by £200 to £700 a week, they would still get approximately £20 a week in housing benefit, but they would be £83 worse off than families in social accommodation.

If Mr Brown and Miss James’s income was £600 a week and it was increased to £700 a week, not only would they incur the cost of child care, travelling to work and so on, but the loss of their housing benefit would be such that they would gain only £25 out of that additional £100 of income. How is that an incentive to go to work? The marginal rate of tax would be 75% in the private housing sector and 32% in the social sector. That is not an oddity—I could give many other examples.

Mr and Mrs Ossai have four children and they lost their home as a result of the collapse of Mr Ossai’s business. Mrs Ossai is a district nurse—a fantastic person whom people would want to be their neighbour. The family’s income now stands at about £34,000 a year, which is £650 a week. This lady was willing to accept a tenancy in the private sector, for which the median rent is £253 a week. That meant that even if her income was £1,000 a week, she would still get housing benefit. I asked her not to accept that offer from the council—thereby earning the hatred of its housing department—and she is now in a three-bedroom flat in what is not the best estate in town, but in which her family can live and whereby she can earn enough to receive no benefits and to be independent. Moreover, she is a fantastic neighbour, because all the families, elderly people and those with kids who live nearby can go to her and see her going to work as a district nurse. She is a role model.

This is about communities that have all sorts of people, and it is about providing role models and getting people off benefits, but the Government’s simple provision will force, according to the their own figures, 20,000 working families into housing benefit, and that is wrong.

18:18

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

I welcome my hon. Friend the Minister for Housing to his new role. I am afraid that he is likely to be well and truly harangued by myself and my hon. Friend the Member for Pudsey (Stuart Andrew) over the coming months, because, to echo my hon. Friend the Member for Sherwood (Mr Spencer), we have a real situation in our city of Leeds, where there is pressure on the greenfield and the green belt, even though 24,000 approvals have been made for brownfield sites. This is putting huge pressure on the local communities and on the amount of resources that Leeds city council is spending on trying to preserve the greenfield and the green belt.

I want to suggest a couple of routes for the Minister to investigate. First, will he look at the incentives that we can give house builders to build on brownfield land? The right hon. Member for Leeds Central (Hilary Benn) is no longer in his place, but I think that he would recognise that a huge area of Leeds—I know that this is supported by the hon. Member for Leeds East (Mr Mudie)—needs regeneration. That regeneration is not happening because developers can make a huge amount of money and make vastly greater profits by coming out into my constituency, which is on the edge of Leeds, and building four or five-bedroom houses on greenfield sites, where there is a premium attached because of the countryside views. We can have this argument, but we cannot stop the developers doing that because it falls within the planning laws. Under the Localism Act 2011, Leeds city council is now responsible for bringing in plans to control that area further.

We need to be more proactive in incentivising house builders not only to get building, but to do so where we want them to build. I suggest to the Minister for Housing that he and the Chancellor of the Exchequer should consider introducing tax incentives for companies that build on brownfield sites. There are some 24,000 approvals in Leeds, which are ready to go. Those houses can be built, but the house builders are choosing not to build them. They have land-banked the land and could start building tomorrow if they wanted to, but better profits lie elsewhere. We could increase the profitability for companies of building on brownfield sites before greenfield ones. Perhaps we should also look at how section 106 agreements work. That would hopefully address the problem. I put that to the Minister purely as something for him to go away and think about, and to perhaps come back to me on.

One of the greatest concerns is the east Leeds extension project, which has been on the books in Leeds for decades. It is getting closer and closer to happening as we speak. Our argument with the house builders is that they want to start building the houses before the new dual-carriageway link to the ring road that is part of the expansion project. That would put intolerable pressure on the existing infrastructure in the area. We need to look at how we can say to house builders, “You cannot build a single house until you have put the infrastructure in place to cope with the new demand.”

When I was a councillor in 2007, we had severe flooding. Towards the bottom of the topography of my constituency, which is at its north end, there is a huge run-off area. The east Leeds extension project proposes to build on the greenfield land that allows that water to soak in. We need to look at a mechanism whereby we can say to the house builder, “Not only do you have to build the link to the ring road, but you need to build a storm drain under the development that will carry water away.” As I have said, the hon. Member for Leeds East has huge flooding problems that relate to the same area. By working with the community and helping to protect their houses from flooding, we may be able to get this house building moving forward with less resistance, because the community would be able to see the benefits for all.

If we are to take pressure off greenfield sites and get some of these 24,000 homes, the vast majority of which are affordable, built on brownfield sites, we must look at the taxation system and section 106 agreements to see whether we can incentivise the house builders to move to those areas before they build on the green fields.

18:23

[Alison Seabeck (Plymouth, Moor View) (Lab)]

I draw the House’s attention to my indirect interests, which have been mentioned before in the House.

I welcome the new Minister for Housing to the role that I consider to be the most important in government outside the Cabinet. It is arguably more important than several of the recently invented roles in the Cabinet. Yesterday, we saw the end of the tenure of the right hon. Member for Welwyn Hatfield (Grant Shapps) in that office. He said that his tenure should be judged on a simple golden rule: if he delivered more homes than were delivered under Labour, he would consider himself a success. On his own test, he has failed. My hon. Friend the Member for Birmingham, Erdington (Jack Dromey) rightly drew attention to the national figures. In the south-west, the number of homes being completed is lower than in 2009, to use the year that the Minister, the former Minister and the Prime Minister have used. That figure is 7% lower this year than it was last year.

The knock-on effects are startling and shameful to behold. Statutory homelessness in the south-west is up 15% in the past year and rough sleeping up 24%. Those are the brutal consequences of a Government who, for all their bluster and sunny language, have failed to understand the nature of the housing crisis, set their aspirations low and lacked the will to deliver.

Nowhere was that better evidenced than by the Secretary of State and the former Housing Minister willingly offering a 60% cut in the housing budget in the 2010 comprehensive spending review. In its stead we have had a push-me, pull-you approach to affordable housing, with the Department for Work and Pensions reducing housing benefit while the Department for Communities and Local Government’s affordable rent model has not only made social housing unaffordable for hard-working families on low incomes but, by the DCLG’s own analysis, will increase the housing benefit bill by billions of pounds. We have heard about the bedroom tax, which is also hitting hard-working families, and the council tax benefit cut is coming. Like every other MP, I have people in my surgery who are in tears because they cannot cope with their housing situation.

The Government have lacked a joined-up, effective strategic vision for housing provision, and their aspiration of 170,000 new affordable homes is dwarfed by the 256,000 affordable homes that Labour delivered in the last Parliament despite the credit crunch and the global banking crisis. In the past two and a half years, the Government have refused to take the necessary action to deal with a crisis of their own making. The former Housing Minister talked a good talk, but for all the effective media spin, nothing substantial has happened and the numbers keep getting worse.

Labour’s call for a tax on bankers’ bonuses to kick-start the construction industry and deliver an additional 25,000 new homes was rejected by the Government, who instead chose to hand a £40,000 tax cut to millionaires. Ask any housing expert and they will say that the only way to get new homes delivered in the right place and of the right size to meet needs is to invest capital. I very much hope that the new Minister, with his understanding of construction and development and an open mind, will consider seriously how he can make the case for capital investment within the Government. My right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) has given him a good starting point.

The Government continue to say that the problem is with planning. Across the country, however, there are tens of thousands, if not hundreds of thousands, of unused planning permissions. Those potential homes are not being built because financial backing is not in place, the banks are not lending and potential buyers cannot get a mortgage. The Government want to open the debate about greenfield land, which is a running sore on their own Benches. Government Members have raised some concerns about it today. However, people across the country whose lives are on hold will continue to pay the price. They are not just families on council waiting lists, dismayed by the Government’s decision to stop investing in new homes for social rent, but young professionals who once saw a simple route through renting to home ownership. They now find themselves in insecure rented accommodation in a sector that the Government have refused to regulate. The Government voted against our amendments to the Localism Bill last year that would have given renters greater rights and protections.

Last year, the number of homes started in Plymouth was down, and there is a 24-month build time for homes, which is not good enough. Plymouth city council recently wrote to the former Housing Minister asking for a meeting to discuss how we could invest in building 5,000 new homes, including through a significant self-build programme. I hope that the new Minister will agree to meet me and representatives of Plymouth city council. What this country needs now is not a plan B but a plan C—C for “crisis”, a crisis caused by the coalition.

18:28

[Justin Tomlinson (North Swindon) (Con)]

I welcome the new Ministers to the Front Bench. There have been some excellent contributions to this debate, but I would like to set out some alternative issues that are having an impact on new build sales. I do so on the basis of my time as a councillor from 2000 to 2010—a time of the last Government’s house building at any cost, which hit residents’ quality of life. My speech will be a whistle-stop summary of some of my concerns.

First, the last Government were hell-bent on high density rules, which saw houses packed in at the cost of parking spaces, creating dangerous problems. They also built on valuable open spaces. Following the successful Olympics we rightly hear concerns about school playing fields, yet the last Government were all too happy to build on those useable open spaces, leading to long-term problems of childhood obesity.

As councillors, we were also forced to deal with the problems caused by imposed housing targets. My local area of Swindon had already built 20,000 houses over the previous 20 years, making us one of the fastest-growing towns in the country, if not the fastest-growing, but we were told that we would have to find another 36,000 houses over the following 20 years. Such targets create confrontation and delays as angry local residents fight the unapproachable planning system.

We had problems that I set out in a ten-minute rule Bill. In new build areas that remained unadopted, residents were paying council tax or street maintenance, yet the developers remained responsible. The developers were often very good when they were selling the houses, but when they had sold the last house, and until the area became adopted, they were all too often poor at maintaining an area. I had estates that had not been maintained for more than 17 years, with work waiting to be done before that area could be adopted, yet residents still had to pay, and that did not encourage people to buy houses in those areas.

We have had a growing problem with the service and management charges in new blocks of flats. The rules are that, when the final development of that flat area has been completed, the residents have an opportunity to choose or even set up their own management company. However, many developers in management companies have found a way to delay that point, and residents who were told when buying the house that the service charge would be, for example, £1,000 a year, suddenly find the management company making pathetic excuses to hike up the prices, taking valuable money from hard-pressed residents who have no choice but to pay or be taken to court. My hon. Friend the Member for South Swindon (Mr Buckland) and I urgently request a meeting with the Minister to discuss how we can help such residents, who are increasingly targeted by cowboys who parade themselves as management companies.

We have heard much about the banks. Earlier, I challenged the shadow Housing Minister because the previous Government had an ideal opportunity to deal with the banks. They were at the Government’s mercy when the Government rightly came to their rescue, and they could have imposed some incentives and direct instructions, particularly to help first-time buyers, who are now finding it difficult to access mortgages.

[Alec Shelbrooke]

Does my hon. Friend agree that most of the rhetoric in the Opposition’s motion suggests that we need to borrow a lot more money? What does he think the effect on the housing market would be if interest rates rose on the back of that?

[Justin Tomlinson]

I thank my hon. Friend for that intervention. That would have been my next point, but I am conscious of time, so I will be supremely efficient and simply pay huge tribute to my hon. Friend the Member for Meon Valley (George Hollingbery), who covered that point. It is clear that, if the Labour party found itself in Government again and wrecked our triple A credit rating, interest rates would rocket, and we would have a real housing crisis on our hands.

Many important issues have been raised today, but I urge Ministers not to forget the importance of addressing quality of life. If we are to restore the long-term appetite for new build housing and new build housing estates, we must improve their reputation. The fear factor is a bit like that experienced when buying a new car in the knowledge that as soon as it is driven off the forecourt, 30% of the value is lost. So many issues put people off going to those new build areas, which have already got planning permission. They should be addressed, because that will help the housing market and, crucially, the long-term quality of life of residents of all ages.

18:32

[Bill Esterson (Sefton Central) (Lab)]

I commend to the Minister the advice of the Chair of the Select Committee to read the very good report that it prepared on this subject. It gives excellent examples of how to start to tackle the housing crisis. The evidence alone is worth reading for good examples from not only this country but throughout the world that we might embrace.

The hon. Member for Elmet and Rothwell (Alec Shelbrooke) talked about the challenges of the green belt from the perspective of representing a seat outside a northern city. I am in a similar position and face threats to every small town and village that I represent. I hope that the Minister will respond to the hon. Gentleman’s comments about providing incentives for brownfield development because they are much needed. There are good examples of brownfield sites around the country that were made viable under the Labour Government. Perhaps the Minister will consider what is needed to achieve such development during his tenure.

Many of my constituents need housing. Many come to me for help with stories of the difficulties of finding anywhere to rent or buy. In Sefton, there are precious few homes available. In the town where I live, it can take up to eight years for those on the housing list to be given a house. The issue is of huge concern, yet the options are severely limited. Of course people want to stay in the town or village in which they live or grew up and where they have families and friends, and I hope that the Minister will address that. My hon. Friend the shadow Minister referred to the need to look at the local nature of housing need, and that is one of many issues to be resolved.

There are many practical actions that the Government could take to help. The borough of Sefton contains 6,000 empty properties, and although VAT on renovations is charged at 20%, there is no VAT on new build properties, which makes it harder to bring empty properties back into use. Encouraging the renovation of empty properties is an important step and would help the economy. The tax on bankers’ bonuses is mentioned in the motion, and the proposed construction of 25,000 affordable homes is of great interest. The lack of affordable homes to rent, to buy or for shared ownership is the crucial problem facing my constituents and those of all hon. Members.

The Chancellor called for the planning system to be speeded up to help the construction industry, and in an earlier intervention I mentioned the need to use existing planning consents. Shaun Spiers, chief executive of the Campaign to Protect Rural England, made the point better than I can: if we are to have the homes that are needed, particularly the affordable homes, we need to use existing planning consents rather than seek more.

In Formby in my constituency, a representative from the developer David Wilson Homes told those attending a recent public exhibition about plans to build 300 houses on green-belt land. Hundreds of residents who turned up to the meeting were told that the development would go ahead and that there was nothing they could do about it. That exhibition coincided with the Chancellor’s announcement about making planning easier, and the concern is that developers are queuing up to build on the green belt in places such as my constituency—and many other constituencies with rural or semi-rural areas—because it is more attractive and financially more advantageous.

I hope that the Minister will listen to hon. Members from across the House who have called for practical suggestions that will protect the green belt as far as possible, and that he will take on board suggestions from members of his own party as well as from the Labour party on solving this very real housing crisis.

18:37

[Chris Evans (Islwyn) (Lab/Co-op)]

I believe in two things: first, that everybody who can work should have the right to a job, and secondly that everybody should have a place that they can call home, whether in an urban or country area. Statistics show that the average age of a first-time buyer is 37 years—at the same age, my mother and father had been married and divorced and had two children—and according to Scottish Widows, that age will increase to 44 over the next couple of years. Average rent is £725, which is half the monthly wage of an average earner, and it seems that owning or renting a house, or whatever people want, is to become like walking on the moon or flying on a supersonic airline to New York—a thing of the past.

This debate has not been helped by the idea that somehow housing benefit is paid out to scroungers. It makes me absolutely sick and mad that the Prime Minister has placed a cap on housing benefit for political ends. He is not targeting people who are out of work; some 95% of the £1 billion increase in housing benefit has been paid to people in work. Seven out of eight claimants are people in work. The Government are not attacking those who are jobless; they are attacking those on low incomes. It is all very well to critique the Labour Government and for the Chancellor to appear on the Sunday programmes and say, “Oh, it’s all the fault of the planning regime.” I am sorry, but it is now the Government’s planning regime and if they have a problem with planning, they should do something about it.

I am not going to stand here and say the Labour Government were perfect. We need a quarter of a million new homes a year. If we are building only half that, something has gone wrong. The old ways will not do, so we need innovative measures.

The new Housing Minister, who has made the trip from the Department for Business, Innovation and Skills, spoke about enterprise zones, which can be successful. We have heard from other hon. Members about examples of where house building is working, but in other areas, such as inner-city London and other city areas, there is a problem. Could we introduce some sort of enterprise zone where there are innovative schemes to bring about house building? We could look at an example from France. When an electricity generator is built, those living nearby are compensated by having free electricity. Could we do something along those lines, and provide a new school or medical centre where there is a new housing development? I did some research before the debate and found out about the No Use Empty scheme in Kent, under which 21,000 derelict homes have been refurbished. Can we evolve that? The scheme can give owners £25,000 to refurbish buildings, which will encourage other banks to lend.

Those are innovative ideas. Time is getting on and I know that somebody else wants to speak, but I will say this: unless we act now, we are saving up problems for the future.

18:41

[Austin Mitchell (Great Grimsby) (Lab)]

We have spent too much time on a tit-for-tat argument about which party has done best by housing. The reality is that both the Conservatives and Labour have done badly by housing, but I proudly say that Labour has done less badly than the Conservatives.

I shall make only two points. First, a housing crisis is building up primarily because we need 240,000 new houses a year but are building only around 100,000 a year. In that situation, we need a big housing drive, for two reasons. First, that is the best possible stimulus to an economy that is bumping along the bottom and which drastically needs to be stimulated by the provision of jobs. People need furniture and many other things when they buy a house—and in Grimsby they need pictures of me to put on the wall. We need that stimulus as quickly as possible. The second reason why we need a big drive is to deal with the crisis, but as other hon. Members have indicated, we need housing of a particular type.

We need a big drive on public housing for rent—I do not care whether it is social housing or council housing. We need to stimulate both those things for the two fifths of the population who cannot afford to buy at current prices. They will not get mortgages, but they need good housing. We save money on the health service, education, policing and social services by putting them in good housing. That should be the prime focus of the drive.

My second point is on how we can raise the money. We could and should issue municipal housing bonds so that local authorities can raise the money and stimulate investment in housing. The return will come from rents in an authority’s own area. That is a simple way of doing things. The bonds could even be bought by the Bank of England, just as it buys Government debt for quantitative easing. That is the drive that we need and we could finance it with municipal housing bonds.

Those are the two points I wanted to make. I welcome the new Housing Minister to his role, but he has a big job. It is important that he stimulates and begins the big housing drive right now.

18:43

[Chris Williamson (Derby North) (Lab)]

This is an important and timely debate. Time prevents me from commenting on each of the contributions we have heard—there have been some excellent ones—but I shall pick out one or two. My right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) effectively debunked the Government’s flamboyant use of statistics and demolished the claims made about the benefits of the new homes bonus.

I welcome the Housing Minister for the second time today. He clearly has an extremely big job to do. We have not seen a failure to deliver on this scale since another Tory-Liberal Government failed to deliver on their promise to build homes fit for heroes for the families of soldiers returning from the horrors of the first world war.

Conservative Members used to talk about a property-owning democracy, but many would-be home owners are now trapped in private rented accommodation, paying extremely high rents and unable to build up the very high deposits necessary to secure a mortgage. Nowadays Members on the other side of the House talk about “an affordable housing revolution”, but they are presiding over the disintegration of affordable housing as we know it.

[Jeremy Corbyn]

Is my hon. Friend aware that in constituencies such as mine a third of the population are living in private rented accommodation, both those in and out of work, are being denied sufficient housing benefit to pay the rent and are being socially decanted out of central London? That is destructive to communities and to family life. Does he agree that the Government have simply got it wrong on housing benefit?

[Chris Williamson]

The Government have absolutely got it wrong, and it is a complete scandal. If we are to have balanced communities, we need to create a situation in which people in different places on the income scale can live in the same community. What the Government are doing is completely wrong.

We have seen a massive fall in affordable home starts and a catastrophic collapse in social housing starts. When I was first elected, I was a member of the Communities and Local Government Committee, and I well remember the ministerial team coming before the Committee. The then Minister for Housing said:

“We believe in house building; we believe we’ve got a better way to get houses built. The idea is to get a system which delivers housing in this country.”

The Secretary of State chipped in, adding:

“And homes that people want to live in so kids can play in the streets and people come home with some pride.”

But they have totally failed to deliver on all the rhetoric on that day and since.

In her contribution, my hon. Friend the Member for Plymouth, Moor View (Alison Seabeck) touched on the fact that the Government are failing to deliver. Indeed, every one of the plethora of new initiatives announced by the Government has been an utter failure. As my hon. Friend the shadow Minister for Housing pointed out, in the month following the introduction of the NPPF, planning approvals fell by 37%, which accompanied the loss of 180,000 planning approvals as a result of the meddling in the planning rules by the Secretary of State when he first came to office. That puts into context the cavalier way in which the Government have addressed the whole issue of delivering decent housing.

The Government’s definition of “affordable housing” means that it is not even affordable to large numbers of people. Indeed, the ministerial announcements that we are seeing on various new housing initiatives would not have been out of place if they had appeared in George Orwell’s “Nineteen Eighty-Four” as the product of the Ministry of Truth. Perhaps we should rename the Department for Communities and Local Government.

The reason we face this massive housing crisis today is the abject failure of the coalition parties’ economic plan. They have cut housing investment at precisely the wrong time and, as a consequence, the construction industry is on its knees. It is a very labour-intensive industry and it could create huge numbers of jobs. Moreover, 80% of the products on a building site are procured from inside the United Kingdom. Construction is an engine for economic growth.

[Mr Prisk]

The hon. Gentleman said that he was appalled at the alleged cuts. How much more would Labour spend?

[Chris Williamson]

With all due respect to the Minister, I know it is his first day but it is his party that is in government, his party that is responsible for this housing crisis, his party that is presiding over a huge increase in homelessness and a significant rise in rough sleeping, and his party that is catastrophically failing in its duty to provide the houses that people need in this country.

What do the Government do in response to this huge and growing crisis and massive demand for housing? Rather than build the homes that people need, they tinker with measures that deny housing benefit to people under 25, inflict a crude housing benefit cap and impose a bedroom tax on people deemed to be under-occupying their homes, forcing people up to the age of 35 to live in a single room if they happen to be on a low income.

The human cost of the calamity with which we are faced as a consequence of the failure of the Government’s economic and housing policies is tragic and shameful. More people are homeless as a direct consequence of their policies, and more people are having to sleep on the street—as I mentioned, rough sleeping is increasing. This is completely unacceptable in the 21st century in one of the richest nations on the planet. I just hope that the new Housing Minister is not blinded by the failed ideology that resulted in the abject failure of his predecessor.

The country is crying out for, and demands, real action now, not more meaningless initiatives. We need a clear plan, because plan A has totally failed. The new Minister said that he was committed to increasing housing supply. I hope that he can deliver on that. We need a new tax on bankers’ bonuses to build tens of thousands of new homes, and we need a cut in VAT on home improvements to help people undertake that work and generate more jobs. These are the sorts of measures contained in our motion and that would give a boost to the construction industry. I therefore commend the motion to the House.

[Mr Speaker]

With the leave of the House, I call the Minister.

18:52

[Mr Prisk]

I am delighted to respond to this debate. It has been constructive and timely in a number of ways—from my personal point of view and in terms of the Government’s programme—and I would like to congratulate right hon. and hon. Members on what has been a genuinely positive and constructive debate. I want to respond to some of the positive ideas raised, because it is an important part of my learning curve and so that we can tackle a problem with which, as several Members have said, many Governments have been faced. The hyperbolic contributions from Opposition Members do not help us to find a meaningful and lasting solution. I have already outlined the steps that the Government have taken to address the previous Government’s failure to deliver sufficient housing supply. I want now to address some of the specific points that have been raised and that Members have asked me to touch on. After that, I shall conclude in the time left to me.

We began with the contribution from the hon. Member for Sheffield South East (Mr Betts), who, to be fair, accepted that the Labour Government failed in several areas. I accept the point about self-build, however, and want to consider it further, because it is an interesting idea. Several Select Committee members have recommended that I read their report. I do not know whether they are on a bonus or chasing a sales target, but I am more than happy to look at it, because it is an important issue.

I draw attention, in particular, to the contribution from my good friend, my hon. Friend the Member for Bromley and Chislehurst (Robert Neill). I would like to put on the record my personal tribute to him. The House knows that he was a hard-working Minister, experienced and courteous to the House—a lesson that I shall try to follow. He worked on Ebbsfleet, as did my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps), where 23,000 houses went un-built in the 13 years of the last Labour Government. My hon. Friend ensured that those houses can now be built. He was right to say that Labour Front Benchers are unfortunately suffering from what one can only describe as collective amnesia. Now they talk highly about helping our councils, but they forget that they spent 13 years trammelling local councils and preventing them from doing what they want to do. We are changing that; that is what the Localism Act 2011 is all about.

I thought the hon. Member for Halifax (Mrs Riordan) was a little negative. She omitted to mention the contributions in transportation, infrastructure investment or the £770 million in the Growing Places fund—if I may, I shall come back briefly to discuss Halifax in a moment.

My hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) highlighted the fact that this is a long-term issue. She asked about the empty homes package, which is a package of £160 million. I am pleased to say that we are scrapping the old top-down pathfinder targets, which sought to demolish houses. We are looking to ensure that we refurbish them. I also very much welcome her comments about the new homes bonus.

A number of Members mentioned social housing issues. I will want to look at them, but to do so in the two minutes I have left would be to treat them inadequately, as they are deep and sustained issues.

Let me turn the underlying economic issue. My hon. Friend the Member for Meon Valley (George Hollingbery) hit the nail on the head. He was absolutely right to say that we have recognised that ensuring that we deal with the deficit is what keeps interest rates low. For many of our constituents—indeed, for millions of households—ensuring that interest rates remain lower for longer is vital to their being able to continue to afford their homes.

My hon. Friend the Member for Rugby (Mark Pawsey) talked about how the new Gateway site is a good example of a project that is progressing.

The right hon. Member for Greenwich and Woolwich (Mr Raynsford) is an experienced Member in this field. We disagree on a number of areas, and he will not be surprised to know that the new homes bonus is one of them. Indeed, he might like to know—he might also wish to debate this with the hon. Member for Halifax—that Calderdale council is receiving £1.7 million from that bonus for 550 new builds. I suspect that there may be an element of tension on the Labour Back Benches.

My hon. Friend the Member for Sherwood (Mr Spencer) talked about the important issue of ensuring that brownfield sites are developed, as did my hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke). Getting the balance right between greenfield and brownfield sites is difficult. Wearing my old surveyor’s hat, I want to look at the issue further. As a practitioner, I dealt with how we regenerate brownfield sites back in the 1980s and 1990s. I want to look at the issue, and I would ask my right hon. and hon. Friends to write to me about it.

Let me turn, finally, to a couple of the last points that were raised. My hon. Friend the Member for North Swindon (Justin Tomlinson) was absolutely right that we are determined to ensure that we get house building numbers right, and that we should develop and build on that and reverse the problems we faced under the last Labour Government. However, we should not ignore quality. That is an important point. Quality and design; places that people want to live in; the use of the vernacular—these are important as we think about how to ensure that we provide the appropriate homes.

To conclude, the Government are working hard to increase substantially the supply of housing from the low point of the last Labour Government. Our housing strategy combines practical measures with an understanding that Whitehall cannot and must not try to control the housing markets. Our work in helping first-time buyers, simplifying the planning system and unlocking stalled sites is all part of our commitment to enable more homes to be built. By tackling the deficit we have built the foundation for a sustainable economy. We are now focused on getting houses built.

[Ms Rosie Winterton (Doncaster Central) (Lab)]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Question put accordingly (Standing Order No. 31(2)), That the original words stand part of the Question.

The House proceeded to a Division.

[Mr Speaker]

I ask the Serjeant at Arms to investigate the delay in the No Lobby.

18:59

Division 57

Ayes: 222

---

Labour: 212
Scottish National Party: 4
Independent: 2
Social Democratic & Labour Party: 1
Alliance: 1
Green Party: 1
Democratic Unionist Party: 1
Plaid Cymru: 1

Noes: 297

---

Conservative: 253
Liberal Democrat: 43

Question put forthwith (Standing Order No. 31(2)), That the proposed words be there added.

19:17

Division 58

Ayes: 285

---

Conservative: 241
Liberal Democrat: 43

Noes: 214

---

Labour: 204
Scottish National Party: 5
Social Democratic & Labour Party: 1
Independent: 1
Alliance: 1
Green Party: 1
Democratic Unionist Party: 1
Plaid Cymru: 1

The Speaker declared the main Question, as amended, to be agreed to (Standing Order No. 31(2)).

Resolved,

That this House welcomes the first Opposition Day debate on housing in this Parliament; notes that house building under the previous administration fell to its lowest peacetime level since the 1920s; further notes that house building starts in England were 29 per cent higher in 2011 compared with 2009; believes there is still more to do to get Britain building; further notes that housing is the most affordable for first-time buyers for a decade and mortgage payments are the lowest since 1997 as a direct consequence of the decisive action to tackle the deficit brought about by the previous administration; notes that the Coalition Government’s affordable housing programme will deliver 170,000 affordable homes by 2015 and leverage £19.5 billion of investment; and welcomes the steps being taken to increase house building and unlock stalled sites and the comprehensive programme to get empty homes back into productive use.’.

[Sir Bob Russell (Colchester) (LD)]

On a point of order, Mr Speaker. I seek your guidance and draw to your attention a matter that will be of interest and concern to all right hon. and hon. Members: the impersonation of a Member of this House. A Twitter account has been set up in the name of “Bob Russell MP”. I assure you that it is not I who have done it. Throughout today it has been filled with vile comments from someone with a sick, evil and warped mind. This must be viewed in the context of three years of dirty tricks in Colchester against me by three immature young men who are all members of the same party. It has involved a spoof YouTube video of me, a snooper photograph and letters to newspapers with false names and addresses. Can you provide guidance on what can be done in a case of impersonation of a Member of this House?

[Mr Speaker]

It is clearly unacceptable that the hon. Gentleman has been subject to this form of harassment. However, it is not a matter of order for the Chair. I understand that the companies that host such accounts usually respond promptly to any example of “MP” being used illegitimately. For tonight, I shall leave it there.

Business without Debate

Wednesday 5th September 2012 Commons Chamber

Delegated Legislation

Wednesday 5th September 2012 Commons Chamber

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Companies

That the draft Community Interest Company (Amendment) Regulations 2012, which were laid before this House on 14 June, be approved.—(Mr Swayne.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Equality

That the draft Equality Act 2010 (Age Exceptions) Order 2012, which was laid before this House on 21 June, be approved.— (Mr Swayne.)

Question agreed to.

European Union Documents

Wednesday 5th September 2012 Commons Chamber

Motion made, and Question put forthwith (Standing Order No. 119(11)),

Co-operation with South-East Asia

That this House takes note of European Union Document No. 6677/12, relating to the joint draft Council Decision on the Accession of the European Union to the Treaty of Amity and Co-operation in South East Asia; notes the European Union’s accession to the ASEAN Treaty of Amity and Co-operation; and supports the Government’s policy of increasing United Kingdom and European Union engagement with the countries of ASEAN to promote British and European prosperity, security and values.—(Mr. Swayne.)

Question agreed to.

Sittings of the House

Wednesday 5th September 2012 Commons Chamber

Ordered,

That, on Tuesday 18 September, the House shall meet at 11.30 am and references to specific times in the Standing Orders of this House shall apply as if that day were a Wednesday.— (Mr Swayne.)

PETITION

Wednesday 5th September 2012 Commons Chamber

19:32

[Stephen Williams (Bristol West) (LD)]

The petition is from Bristol West constituents and concerns a post office in my constituency, one of the many that were closed between 2004 and 2008 under the previous Government—the Alma Vale road post office in Clifton, which is still trading as the Clifton Mini Market. The owner of the shop, Mr Satnam Singh, has collected the support of approximately 400 customers who want him to reopen the post office on a voluntary basis.

The Petition states:

The Petition of residents of Bristol West constituency,

Declares that the Petitioners support the proposed re-opening of the Clifton Mini Market Post Office.

The Petitioners therefore request that the House of Commons urges the Department for Business, Innovation and Skills to make provision for post offices to be operated on a voluntary basis so that communities such as ours may gain an invaluable service.

And the Petitioners, as in duty bound, will ever pray.

[P001115]

Burial Space

Wednesday 5th September 2012 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Mr Swayne.)

19:33

[Mr David Amess (Southend West) (Con)]

At the outset I would like to congratulate wholeheartedly the Under-Secretary of State for Justice, my hon. Friend the Member for Maidstone and The Weald (Mrs Grant), on her promotion. She of course followed my great friend Ann Widdecombe as Member of Parliament for Maidstone and The Weald and I am absolutely delighted that she has been made a Minister. I have every confidence that when she replies she will satisfy all my very reasonable demands.

I fully understand that the subject I am raising this evening is not the most cheerful one. It is taboo to talk about death, but none of us is immortal—I think—and the one thing that is certain is that we are all going to die. According to the Dying Matters coalition, two thirds of us are uncomfortable talking about dying and death. However, thinking about what happens to us after we are gone is likely to be of huge significance, not just from our personal perspective but from that of the loved ones we leave behind. That thinking will often centre on funeral arrangements, which provide the very last chance to leave a mark on the world that we have just left.

I have probably been to more funerals than I have had meals. I have never been to a truly happy one, but if the person has lived a reasonable length of time, I like to see the funeral as a celebration of that person’s life. That notion was gained from my time on the all-party group on funerals and bereavement. Recently, I have been to the funeral of my good friend Ken Hargreaves, Member of Parliament for Hyndburn from 1983 to 1992. We are having a memorial service for him in the Crypt on the third Wednesday of October; the date is up in the Crypt. The ceremony in Hyndburn was very moving and I had the honour of giving the eulogy. I also recently went to the funeral of Joan Short, my first election agent in the late 1960s. That was at the City of London crematorium.

I am not trying for a job, but I should add that a number of constituents have asked me to preside over the funerals of their loved ones. It has happened when the loved one has not had any particular faith. Although I have not entirely enjoyed presiding, if that is what the departed constituent has wanted me to do, that is what I have done.

Unless a Member has died and been resurrected, none of us can say what it feels like to be dead. Whether we are in some place looking down at our funeral services saying to one another, “My goodness—I can’t believe that hypocrite has turned up at my funeral,” I do not know. I have no doubt that at my funeral one or two people will go to the altar to check that the lid of the coffin has been screwed down tightly.

A funeral is a very important event. I have been to funerals at which there has been hardly anyone and to funerals with so many people that many are standing outside the church. Despite the importance of funerals, only a third of us have discussed the type of funeral we would like. I say publicly that I intend to be buried, not cremated; I hope that someone vengeful does not disregard my wishes.

Not wanting to talk about death leads to an unwillingness to address the many issues that surround it. Foremost among them is what happens to our bodies once we die. We owe it to our loved ones to ensure that what happens following our death is as smooth and pain-free as possible, while still providing a dignified remembrance. Cremation is overwhelmingly the choice of the people of the United Kingdom: about 70% of us are cremated, the highest rate in the world. In some respects, that is understandable—we are a tiny little country and we lack space. The argument is that cremation is efficient, hygienic and cheap and leaves no site behind that needs to be maintained, unlike burials.

[Jim Shannon (Strangford) (DUP)]

The two things that are sure in life are death and taxes; those are things that we have to deal with whether we like it or not. The hon. Gentleman mentioned that most people choose cremation, although he said that he would like to be buried. Is he aware of the new system that at present enables three people to be buried in a grave, but could enable six people from a family to be buried together? The system means that families can be together in death, and a lot of families would like that. It also takes care of the issue of space.

[Mr Amess]

I say to the hon. Gentleman, who is my friend, that I certainly am aware of that suggestion and I will be touching on it briefly. I know that it works extremely well in Northern Ireland.

I want to question whether the popularity of cremations is borne out of choice or necessity. As I said, I certainly do not want to be cremated. For some groups, religious doctrine completely rules out cremation. For instance, Jewish people, Muslims and, until recently, those of my own faith—the Catholics—disapprove of cremation, while modern environmentalists object to the environmental impact of cremation and prefer natural or green burials. The first time I was invited to attend a natural burial I thought, “My goodness, they’re putting someone in a cardboard box—is it going to collapse?”, but in fact it was done with great dignity. That is the choice for a number of environmentalists.

I wonder whether the high cremation rate can be explained by people genuinely wanting to be cremated or by the lack of choice when it comes to burial and the absence of locally accessible, well-managed cemeteries with available burial space. I do not think the answer is simple, but I would like to use this debate to explore the possibility that some people are forced into cremation because of a lack of choice about burials. I should like us to entertain the idea that this problem is going to get worse. We should face up to it, and this Parliament should give a lead.

I am aware that responsibility for burial is a very complex field involving local and parochial authorities. I also understand that at present, as my hon. Friend the Minister knows, there is no statutory requirement to make available a place for burial, but this does not change the fact that we need to approach the issue of burial space in a holistic fashion. Burial space is a problem that has plagued this country since Victorian times, and despite its resurfacing again and again, it has not been adequately addressed.

The longer we leave the issue unresolved, the more serious it is going to become. It is a particular problem in London; I am pleased to see the hon. Member for Ealing North (Stephen Pound) in his place. In August 1997, the London Planning Advisory Committee published its report “Planning for Burial Space in London”. This outlined that inner-London boroughs were then estimated to have only seven years’ burial capacity remaining, while for outer-London boroughs it was up to 18 years. A more recent report of 2011 suggested that inner-London boroughs such as Lambeth, Tower Hamlets and Kensington and Chelsea had virtually no burial space remaining, while in some outer-London boroughs such as Croydon and Haringey the situation was deemed to be “critical”.

[Rosie Cooper (West Lancashire) (Lab)]

I thank the hon. Gentleman for securing this debate. He will know that in my constituency in the 1960s a new town was built with no cemetery provision. In the past few years the council has given planning permission for a cemetery and crematorium, but on the other side of the borough nothing is happening and we are making no progress, and there is no danger of the council forcing the issue. Yet my constituents are having to pay what amounts to a death tax by being buried or cremated in other areas. Does the hon. Gentleman agree that we need councils to act with compassion towards their residents—the people who are paying council tax—who ought not be forced to be buried or cremated out of the area at a huge cost to them? There are of course religious connotations. The local Catholic priests are very anxious that Skelmersdale has its own cemetery; in fact, not only Catholic priests but the local priesthood of all denominations need burial space.

[Mr Amess]

I absolutely agree with everything that the hon. Lady said. She will be delighted to know that the wonderful Library briefing on this issue specifically told me about those points.

Evidence suggests that the problem is not just restricted to large metropolitan areas such as London. In rural locations, for example, there are problems with financing the purchase of new land for burial and of secure and appropriate land at a reasonable distance from the communities. I know that the hon. Lady raised the issue in the House in 2007, but it has obviously not been solved. In 2011, the Church in Wales claimed that two thirds of its 1,000 burial grounds would be full in 10 years and that it was short of funds to maintain graves. It added that it could not afford to extend or open new churchyards. It is clear that this is a major issue.

Over the past decade, Governments have begun to recognise that this is a problem, beginning in 2001 with the Environment, Transport and Regional Affairs Committee’s inquiries into cemeteries. There was also a Home Office report in 2004, but I think that there has been inactivity with regard to responding positively to the problems.

There are knock-on effects on the cost to the population. Foremost among these is the narrowing of affordable burying options. There is often no space available in the local cemetery and the family may be forced to choose a burial plot that is some distance away from where the deceased actually lived. This can be emotionally distressing and geographically challenging, with the deceased losing any links to the local area and the family having to travel some distance to visit the grave. There is an economic impact on the costs to local authorities, and I have already mentioned issues relating to the Muslim and Jewish communities.

The House should also consider the impact of historic cemeteries. We have many such cemeteries in the United Kingdom, many of which have become full and are often neglected, even though they may well contain wonderful buildings, artefacts and landscapes of great importance and heritage. It is estimated that there are approximately 3,500 pre-1914 historic cemeteries in the UK, all of which could be at risk because of lack of burial space. For example, in the London borough of Newham, where I was born and where the Olympics were staged, 60% of public open space is made up of cemetery land given over to cemeteries.

I will end with the potential solutions. The reuse of graves is a very controversial suggestion, but some people favour it. It is not a new idea—it has been under consideration for some time. I remember there being a bit of a round-the-houses about it in 1994. It is called the lift and deepen method, whereby graves are excavated to their deepest depths and all remains placed in a casket and reinterred at the bottom of the grave. The research team involved interviewed 1,603 members of the public and the majority thought that it was a good idea, but I have my own views on it. The reuse of graves older than 75 years is allowed in London under the London Local Authorities Act 2007, but I say again that it is a controversial activity. I believe that Southwark council has unveiled plans recently to tackle lack of burial space in the borough by reusing graves. If approved, such action would free up 1,600 burial plots by 2015 and more than 5,000 by 2028.

I turn now to the subject to which the hon. Member for Strangford (Jim Shannon) alluded in his intervention—Italian-style mausoleums. I believe that this is a possible solution. I have been to see them in America and other countries and think that, done well, they are both respectful and tasteful. They are particularly prominent in southern European countries such as, obviously, Italy. The mausoleums allow for a maximum number of entombments in a minimum amount of space. Not only do they use space effectively in burial grounds, but they provide the opportunity to be interned alongside loved ones. Such mausoleums come in a variety of shapes and sizes, and a variety of materials can be used. They are a possible solution and I think that we should learn from best practice in Northern Ireland.

Green burials are another solution to consider and provide environmental benefits. The natural process is sped up, freeing up space more quickly. There is no bulky headstone. Instead, the burial register can be anything from a shrub or tree to an electronic chip, which helps keep the space required to an absolute minimum. The coffins are made of biodegradable cardboard or papier-mâché, thus freeing up space underground at a faster rate. Finally, the graveyard when full can be turned into a nature reserve or picnic site. Many people have no problem with that. It would not be my choice, but I am probably in a tiny minority. The first green burial site was opened in Carlisle in 1993 and there are now more than 200 across the United Kingdom. A further benefit of the method is the low cost, with cardboard coffins costing as little as £60.

In conclusion, I ask the Minister what the Government’s views are on adopting the measures that I have mentioned. Such new methods are becoming more widespread and I wonder whether the Government’s position on them has altered since the debate on the matter some years ago. I am aware that the situation is being kept under review, but then everything seems to be under review. It would be nice if, rather than reviewing things, we could have a bit of activity. If we do nothing, people will be left with less choice, further increasing the case for cremation to be the solution that is offered to everyone, and those who still opt for burial, either out of choice or due to religious conviction, are likely to be faced with considerable costs, increasing the likelihood that burials will occur outside the local area. We should buck our cultural trend and face up to the treatment of death. Other than those who, tragically, commit suicide, none of us know when we will die. The way in which we say goodbye to a loved one should be treated with the greatest possible dignity.

19:52

[The Parliamentary Under-Secretary of State for Justice (Mrs Helen Grant)]

I congratulate my hon. Friend the Member for Southend West (Mr Amess) on securing this debate on burial space and the treatment of death, and thank him sincerely for his kind and generous words of encouragement at the beginning of his speech.

These are important subjects and I consider it crucial that Parliament continues to have time to debate them. I am aware of the concerns of our burial and cremation stakeholders.

Burial was the only option available for people to dispose of their loved ones after death until the early 20th century, when national legislation to allow cremation was passed. Subsequently, the Roman Catholic Church has lifted its ban on the practice, and cremation has become an increasingly popular choice of funeral. As my hon. Friend said, cremation now accounts for about 70% of funerals in England and Wales. That of course means that about 30% of deaths still lead to a burial. Some 150,000 burials are carried out each year. Indeed, as my hon. Friend mentioned, for some faith groups, including Muslims, Orthodox Jews and followers of the Greek and Russian Orthodox Churches, burial is a religious requirement. For other faith groups, although cremation is not forbidden, burial remains a preferred option. The Government will continue to support people’s decisions to bury their loved ones after death.

In recent years, more individuals have taken greater responsibility in determining how their remains should be disposed of after death. Some have pursued what are loosely termed natural or green burials. It is worthwhile spending a moment explaining those alternatives to the conventional burial or cremation. There is now far more choice than there ever has been for people who want those alternatives. Green options include woodland burials using a cardboard, wicker or bamboo coffin. There are also natural burials, whereby the body is buried directly in the soil in a manner that allows it to decompose naturally. Ministry of Justice guidance on natural burials is available to assist operators in providing them.

Those natural or green ways of disposing of the dead are variants on conventional burial, but there are also several other methods of disposing of human remains that are more akin to cremation, in that they involve total destruction of the body. Those alternatives include promession and cryomation, which essentially involve freeze-drying the body, and alkaline hydrolysis, which involves reducing the body to a powder and liquid residue. Those processes are still relatively new, untried and untested and the Government will follow with interest the progress of trials in Europe and the United States.

[Stephen Pound (Ealing North) (Lab)]

I am sure that I speak for the whole House and beyond in our universal approbation and congratulations to the Minister on her new position.

May I possibly seek to influence the Minister? As one who attended the natural funeral of the late Tony Banks and saw his wickerwork coffin, plaited with ivy, being carried forward to the bosky dell, I could not help thinking that from dust we come and to dust we shall return. What happens to our body is not actually the most important thing in the world. The soul is rather more important. I would not suggest following the silver-tongued leadership of the hon. Member for Southend West (Mr Amess) and creating a whole new world of urban parks where once bodies lay and disintegrated, but I reiterate that I have utter confidence in the Minister and repeat my congratulations on her appointment.

[Mrs Grant]

I am most grateful to the hon. Gentleman and will give serious thought to his important comments and observations on that type of burial.

There is currently no legislative power or duty to regulate the new processes that I described in England and Wales. They fall outside the Cremation Act 1902 because the processes concerned are not seen as constituting the burning of human remains.

I want to make it clear to my hon. Friend the Member for Southend West that burials will, of course, continue to be an option in England and Wales. In the case of burial grounds situated in London, there is the specific legislation to which he referred—section 74 of the London Local Authorities Act 2007, which permits the reuse of graves subject to certain conditions, particularly that the last burial must have taken place more than 75 years previously. Where reuse is possible, a practice known as “lift and deepen” takes place, as he mentioned. Existing remains are lifted to deepen the grave, and the new remains are buried on top.

Indeed, the City of London corporation applied for and was granted a “faculty”, which is a special authorisation by the Church authorities, to reuse old graves in consecrated areas of the City of London cemetery in the London borough of Newham, where the last burial had taken place more than 75 years previously. Signs were placed in the area for several years explaining the intention to clear and develop it and asking people to declare an interest in the graves of their loved ones.

In 2005, the previous Government conducted a survey of burial grounds. It indicated that existing burial grounds could remain in operation for approximately 30 years on the basis of current levels of demand. Of course, it is fundamental that people should be laid to rest with dignity and respect. I am aware of the difficulties that some burial authorities are experiencing both with a shortage of burial space and in finding practical and affordable alternatives, particularly in some urban areas. However, we have not yet reached the stage where the position is critical or requires Government intervention.

Indeed, after careful consideration of all those factors, I do not consider that introducing a policy of reusing graves is critical at the moment. Nevertheless, my officials have offered help and advice to burial authorities, and guidance has been issued for burial ground managers so that they can make the best use of their cemeteries. I will, of course, continue to keep the matter under constant and careful review.

Question put and agreed to.

20:00

House adjourned.