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Oral Answers to Questions
(12 years, 1 month ago)
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Dan Jarvis (Barnsley Central) (Lab)
1. What steps he is taking to ensure that foreign conglomerates carry out their responsibilities to UK pension-holders.
The Minister of State, Department for Work and Pensions (Steve Webb)
As this is the first session of DWP questions since the announcement of the untimely death of Malcolm Wicks, I hope that you will allow me, Mr. Speaker, to place on record, on behalf of the whole ministerial team, our appreciation of Malcolm and all that he contributed to our debates on pensions and welfare.
The Pensions Regulator has “anti-avoidance” powers to take action against employers when they have acted to avoid supporting the scheme. That includes taking action in foreign jurisdictions when necessary. For example, four financial support directions were issued last year against companies in north America in the Nortel case.
Dan Jarvis
I thank the Minister for his response, and for meeting my constituent Alan Hunton and me to discuss the matter. He is aware of my concern about foreign companies that have purchased and asset-stripped businesses in the United Kingdom. In some cases, those firms have discarded their pension responsibilities in such a way as to endanger the pensions to which their employees are entitled. Will the Minister explain how he is working with the Pensions Regulator, and with his colleagues in the Government, to curtail such predatory behaviour?
Steve Webb
This is indeed an important issue. I can assure the hon. Gentleman that the Pensions Regulator has engaged during the last 12 months, and continues to engage, with more than 1,100 schemes that are linked to overseas employers. Between April 2010 and August 2012, it has exercised its powers on at least 10 occasions in relation to such schemes.
Andrew Bridgen (North West Leicestershire) (Con)
The Minister is aware of a case in my constituency in which the BMI pension fund was placed in a pension protection fund by Lufthansa. In this case, Lufthansa voluntarily paid over £84 million in compensation to the fundholders. However, under current HMRC rules the money is being treated as income, and the lifetime and annual allowance rules are being applied to the compensation. Does my hon. Friend agree that the position is unfair and should be reviewed by HMRC?
Steve Webb
I am grateful to my hon. Friend for raising that case. I have corresponded with Treasury colleagues about the issue, and, subject to their consent, I shall be happy to share with him the reply that I have just received.
Stuart Andrew (Pudsey) (Con)
2. What progress he has made on the Government's disability strategy.
The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey)
Fulfilling Potential, our disability strategy, is being co-produced with disabled people. We published “Fulfilling Potential—The Discussions So Far” and “Fulfilling Potential—Next Steps” on 17 September. Our key themes, which we intend to make a real difference, are early intervention, choice and control, and inclusive communities.
Stuart Andrew
Can the Minister explain what the role of the disabled people’s user-led organisations will be in the strategy?
Esther McVey
I can indeed. User-led groups will be a key element in everything that we do. It is essential for disabled people and their organisations to be at the heart of that. We have also created a £3 million fund, and I was delighted to be in Redbridge last week when we delivered £1 million of it.
Sheila Gilmore (Edinburgh East) (Lab)
An important part of the disability strategy is to get people into work. Can the Minister tell us what proportion of the people in the work-related activity group who have been mandated to join the Work programme have actually found work?
Esther McVey
The figures have not been published yet, but as soon as they are published, I will give the hon. Lady the information.
Philip Davies (Shipley) (Con)
There are many excellent disability organisations in the Bradford district, notably the Bradford and Airedale mental health advocacy group. Can such groups join the disability action alliance to help with the Government’s strategy, or will they be excluded from it?
Esther McVey
We are trying to reach out to as many user-led groups as possible. Those who want to become part of the alliance should visit fulfilling.potential@dwp.gsi.gov.uk. Everyone is welcome: we want the strategy to be embedded in all our local communities.
Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)
Given the cumulative impact of welfare reform on disabled people and the criticism of the Joint Committee on Human Rights, can the Minister explain how the disability strategy will comply with the United Nations convention on the rights of persons with disabilities?
Esther McVey
It fully conforms with the UN rights. In fact, we are a world leader in that regard. It has been noted that we are—as I have said—reaching out to all disability groups and disabled people, and I have given the House the address of the website.
Karen Lumley (Redditch) (Con)
3. What recent steps he has taken to expand the new enterprise allowance.
The Minister of State, Department for Work and Pensions (Mr Mark Hoban)
Because self-employment is the right option for many unemployed people, on 22 October we expanded the new enterprise allowance so that additional jobseekers could take part. We have also extended it so that jobseekers can take part from the first day on which they claim jobseeker’s allowance, rather than having to wait for six months.
Karen Lumley
In Redditch, more than 40 people have taken up the opportunity to be mentored under the enterprise allowance scheme. What else can be done to encourage more jobseekers to start their own businesses?
Mr Hoban
My hon. Friend has made a good point. I think that we should try to give good examples to jobseekers about where they can start businesses. Under Get Britain Working, we can set up job clubs to encourage people to see self-employment as an option for the future. I think that that is a good route out for many people with great skills.
Bill Esterson (Sefton Central) (Lab)
Self-employed people in my constituency are experiencing increasing difficulty in finding work because of the Government’s austerity measures. Does the Minister accept that the bureaucratic requirement for self-employed people to produce two forms of evidence relating to their income is making it very hard for them to claim benefits and to find a way back into work?
Mr Hoban
We try to do as much as we can to reduce the burden of red tape on businesses. That is why the Government set the red tape challenge and introduced the one in, one out rule. All those measures lift the red tape burden from businesses to help them to focus on what they should be focusing on—creating jobs and wealth.
Claire Perry (Devizes) (Con)
22. One great barrier for people in work and indeed for people not in work is the cost of child care. Would the Minister look at allowing people on the new enterprise allowance to deduct the cost of child care from their tax bill? That could be taken out of the profits of their company when it was up and running. Will he meet me to discuss the idea further?
Robert Halfon (Harlow) (Con)
5. What recent assessment he has made of the barriers that prevent jobseekers getting back into work.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
Jobseekers can face a number of barriers to work, about which my hon. Friend has spoken to me on a number of occasions. Those include a lack of work experience, a lack of essential computer skills, an incomplete education, which leaves them ill qualified, or coming from a family where worklessness is entrenched across generations. We are taking cross-Government action to tackle all those barriers, and reforming the benefit system so that it more closely resembles life in work, rather than people having to face those huge barriers.
Robert Halfon
Since 2011, the Department has through procurement encouraged its private suppliers to hire apprentices, and 2,000 apprenticeships have been created as a result. Will the Secretary of State share his success with other Departments, so that we can roll out this programme across Whitehall and remove barriers to work?
Mr Duncan Smith
I take this opportunity to congratulate my hon. Friend on the huge work that he has done in encouraging apprenticeship starts. I know that he is particularly keen on that and I take a real steer from him. I also remind him and the House that, since we brought in our changes, over the past two academic years more than 950,000 apprenticeships have been offered by over 100,000 different employers. On top of that, the youth contract offers 160,000 wage incentives for those who wish to start apprenticeships. Therefore, the scheme has been a major success for this Government. The coalition has done far more than the previous Government.
Hywel Williams (Arfon) (PC)
Will the Secretary of State concede that the greatest barrier to returning to work is the lack of jobs locally and that that is particularly the case for people with long-term sickness and disability?
Mr Duncan Smith
The hon. Gentleman is right—those people face particular difficulties. The Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Wirral West (Esther McVey), referred to those earlier. Our job is to ensure that we help all those people to overcome those difficulties. Organisations such as Work Choice and Remploy, which are helping to get people back to work, are hugely important. We are making big strides in that regard. The simple answer is that still not enough people with disabilities are back in work, although the situation is improving. I take the hon. Gentleman’s point. We all want to ensure that disabled people join mainstream work and get a full life out of it.
Mr Julian Brazier (Canterbury) (Con)
In welcoming my right hon. Friend's last answer, may I particularly urge him to look at organisations such as the Shaw Trust when trying to assist disabled people into work, rather than having focus desks in jobcentres?
Mr Duncan Smith
I absolutely agree. It is important to extend the net as widely as possible. My hon. Friend is a huge campaigner for public sector organisations and he is right about the Shaw Trust, which I have visited. It is a phenomenal organisation. We will use the trust and every other organisation we can. In fact we set up desks in jobcentres, which were manned by the Prince's Trust on behalf of all other charities, so that we could extend that net to enable anyone who needed it to get support, not just from the Government but from other organisations.
Mrs Mary Glindon (North Tyneside) (Lab)
The unemployed former Remploy workers in my constituency have seen little or no help from the DWP or Remploy since they lost their jobs. What will the Secretary of State do about that?
Mr Duncan Smith
I am very happy to take any particulars from the hon. Lady and to hear more detail from her, but the really successful part of Remploy is the part of the organisation that works to get people back to work. It has had a very successful record. We have put extra money into that organisation. We have made more money and more support available to try to get people who were working in the factories at Remploy back to work. However, I must say that during the period that the Government she supported were in office, next to no support was given to people who left Remploy when it closed up to 29 factories.
Joan Walley (Stoke-on-Trent North) (Lab)
6. What assessment he has made of the recommendations in the Harrington report that have not been implemented; and which such recommendations he plans to implement.
The Minister of State, Department for Work and Pensions (Mr Mark Hoban)
The work capability assessment was introduced by the previous Government through the Welfare Reform Act 2007, for which the hon. Lady will doubtless have voted. There have been two independent reviews by Professor Harrington. We implemented, or are implementing, all his recommendations on how to improve the WCA.
Joan Walley
It is impossible to convey the distress, heartache and anxiety caused by this Government’s failure to get a grip on Atos. Whatever the Minister might say about the spirit of the Harrington recommendations, it is essential that he get back to me with clear details on the availability of audio-recording equipment, the recruitment of mental health champions in all offices around the UK, how we will ensure judges give full feedback to DWP decision makers, and advising sick and disabled claimants that they can submit evidence.
Mr Hoban
We are implementing the Harrington recommendations, so the things that the hon. Lady mentions are happening in assessment centres across the country. For example, audio recordings are available if people request them. Progress is being made, therefore, but the hon. Lady needs to recognise that it was the previous Government who set up the WCA and recruited Atos. We are trying to make the system work better and be fairer so as to get the right outcome for all claimants.
Charlie Elphicke (Dover) (Con)
Does the Minister welcome Professor Harrington’s comment in his latest assessment that things have noticeably changed for the better? I have heard it said that 40% of appeals are successful. Is that right, or is the proportion lower than that?
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
19. On the “World at One” on 11 October the Minister claimed that one of the reasons for so many successful appeals and wrong decisions was claimants withholding medical evidence. Given that the average time for assessment and appeal is 31 weeks—almost eight months—will he explain exactly what evidence he has for that assertion?
Mr Hoban
There are situations in which new evidence is brought forward by claimants. We all should recognise the importance of getting people into work, to give them the hope and the improvements in their well-being that work brings. We should also, therefore, all recognise the importance of finding ways to improve the system, and I would hope that the hon. Gentleman would welcome our efforts to improve it.
Mrs Anne McGuire (Stirling) (Lab)
Last week in Scotland, the Daily Record ran a story about Kieran McArdle and the death of his father, Brian. Brian was paralysed down his left side, blind in one eye and unable to speak properly, and yet was declared fit to work. Atos said in response that
“our trained doctors, nurses and physiotherapists strictly follow the guidelines given to them by the Government”.
Given the crescendo of complaints about the implementation of the work capability assessment, should the Minister not abandon his mantra that progress has been made and instead accept his responsibility and undertake a fast and fundamental review of the test, as called for by the shadow Secretary of State, my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne)?
Mr Hoban
Our condolences are with Mr McArdle’s family at this time, and I believe that the Secretary of State is writing to his son, Kieran, in response to his letter, which was delivered to the Department late last week. We know that going through the WCA process can be difficult for claimants and their families, but we and Atos go to great lengths to make it as fair as possible. That is why we are undertaking this process of refinement, taking the system left to us by the previous Government through the Harrington reviews and ensuring we improve it so that it is fair. The previous Government set up this system, and Opposition Members should not shirk responsibility for that.
Mrs McGuire
I am getting weary of the charge that this contract is somehow—[Interruption.] No; the reality is that we would not have managed the contract in the way this Government are managing it. Although the work capability assessments have been controversial to say the least, Atos, which delivered that contract, has recently been awarded two out of the three contracts for the personal independence payment. Did the company enhance its bid by naming disability organisations with which it would work, and what due diligence was done to test the authenticity of such assertions before awarding the contracts?
Mr Hoban
The right hon. Lady might be weary of that charge, but she will have to get used to hearing it. This Government are taking forward the changes that are necessary to get this system to work well. I think all Members on both sides of the House recognise one thing, however: as the evidence demonstrates, it is better for people to be in work where possible so that they can look after their families and provide dignity. That is exactly what we are trying to do in getting this process right. We are making progress, and we await Professor Harrington’s third review, which is due in the near future. Let me just say this to the right hon. Lady: when Atos bid for the PIP contract, it made it very clear that it would look to work with disability organisations to improve outcomes. We should try to work together on these matters, rather than make partisan political points.
Mr Marcus Jones (Nuneaton) (Con)
7. What steps he has taken to introduce a new sanctions regime for jobseeker’s allowance.
The Minister of State, Department for Work and Pensions (Mr Mark Hoban)
A new sanctions regime for jobseeker’s allowance was introduced on 22 October. The new regime is clearer and tougher. For example, someone who has turned down a reasonable job offer three times in a year will lose their JSA for three years. Those who can work should work.
Mr Jones
I thank my hon. Friend for that answer. In my constituency, many low-paid, hard-working people get more than frustrated with this cohort of people who continually refuse to take up work. Will he go into a bit more detail about the sanctions now in place to deal with able-bodied jobseekers who continually refuse to take up work they are able to undertake?
Mr Hoban
My hon. Friend is right to highlight the frustration among those who are working at seeing people who can work turn down jobs and simply get away with it. That is why we have introduced a new, tougher regime of sanctions, so that someone who turns down a job without good reason for the first time will lose their benefits for 13 weeks. That then escalates so that someone who turns down a job three times in a year will lose their benefits for three years. That is a very clear sanction, it is a very clear deterrent and it sends a very clear message that we expect people who have reasonable job offers to work and pay their own way.
Alison McGovern (Wirral South) (Lab)
We are talking about sanctions, carrots and sticks, and the Work programme is supposed to help people back into work. A constituent who had been on the Work programme and recently found part-time work has contacted me. He was concerned that the Work programme had been little or no help and that, although his employment was due to his own hard work, the Work programme contractor was paid anyway. What has the Minister done to prevent this deadweight loss?
Mr Hoban
The hon. Lady should examine some of the schemes that the previous Government introduced, under which people were paid regardless of the outcome—regardless of whether they helped people get back into work. Our Work programme pays people by results; it ensures that contractors are paid only where people get jobs, and sustainable jobs at that.
Lorely Burt (Solihull) (LD)
8. What steps he is taking to protect members of pension schemes from being incentivised to transfer their pensions.
The Minister of State, Department for Work and Pensions (Steve Webb)
The Government have worked closely with the pensions industry to address concerns regarding incentive exercises. As a result, an industry code of practice was published in June, which we fully support. A monitoring board has been established to evaluate the effectiveness of the code.
Lorely Burt
I am grateful for that answer. Can my hon. Friend provide evidence on the number of companies that have signed up to the code of practice? Is it achieving its objectives?
Steve Webb
I am grateful to my hon. Friend for that. The industry’s response to the code has been very encouraging. Some 49 individual firms and, perhaps more importantly, 14 representative organisations have publicly signed up to support the code, and the figures are growing. The supporters include the major employee benefit consultancies engaged in these exercises and their representative organisations.
Mr David Crausby (Bolton North East) (Lab)
Auto-enrolment of pensions is a wise and overdue step forward, especially for low-paid employees. However, with workers changing jobs an average of 11 times in their working lives, does it not make much more sense for them to park their pensions in low-cost aggregator schemes? If not that, what will the Minister do to ensure that fundholders will not have incurred high charges throughout their working lives as a result of numerous transfers?
Steve Webb
The issue that the hon. Gentleman rightly raises is one of the many loose ends left for us by the previous Government. When auto-enrolment was set up, they simply left us with a situation where people could accumulate a dozen small pots and leave them fragmented. We propose under auto-enrolment that where people leave behind a small pot it will, by default, transfer to their new employer, so that they will accumulate what I have called, in technical terms, a big fat pot.
Mr Peter Bone (Wellingborough) (Con)
9. How many people have found jobs through Jobcentre Plus since May 2010.
The Minister of State, Department for Work and Pensions (Mr Mark Hoban)
Since May 2010, more than 8.6 million claims for jobseeker’s allowance have ended, of which an estimated 68%—or more than 5.8 million—saw the claimant enter work.
Mr Bone
I have good news for the Minister: another 2,000 are coming off jobseeker’s allowance because of a new development in my constituency—well, between my constituency and the Corby constituency. It is supported by Wellingborough council, East Northamptonshire district council, Higham Ferrers council and Rushden council—all Tory councils—but it is opposed by Labour Corby council. Can the Minister explain that?
Andrew Gwynne (Denton and Reddish) (Lab)
How many unemployed people now go through the fast-signing procedure at Jobcentre Plus and therefore do not get to see an employment adviser?
Mr Hoban
We must work out how much support jobseekers need to get into work to ensure that those who need the most support get into work quickly. The hon. Gentleman might also want to know that more people came off the unemployment register in Corby last month than in any other constituency in Northamptonshire.
Diana Johnson (Kingston upon Hull North) (Lab)
11. When he plans to announce the recipients of universal credit whose children will be eligible for free school meals.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
We are working closely with all the Departments that administer the staggering number of passported benefits—some 25 benefits in England, as well as about 20 in Scotland and Wales. The administration of passported benefits and determining who will receive them is the responsibility of various Departments—in the case of free school meals, it is the Department for Education. With different eligibility criteria all over the place giving rise to the massive complexity that has built up over the past few years, we are looking to simplify the system under universal credit while ensuring that those benefits continue to be available to the families who need them most.
Diana Johnson
Does the Secretary of State agree with the Church of England’s Children’s Society, which states that all children in families receiving universal credit should be eligible for free school meals? If he does not, why not?
Mr Duncan Smith
I do not agree, because that would mean a huge increase even on the numbers with which the previous Government left us. If we did that, it would include an extra 2.5 million children and an estimated cost of up to £1 billion. I wonder whether the hon. Lady has talked to her hon. Friends on the Front Bench about whether that is another spending commitment they would like to make.
Sir Bob Russell (Colchester) (LD)
The previous Labour Government left some 3.9 million children living below the official poverty line, about half of whom did not qualify for free school meals. Is it not time that the children who are most in need got the free school meals that they did not get under the Labour Government?
Mr Duncan Smith
The introduction of universal credit will hugely help families with the lowest incomes. Something like 80% of the money is transferred to the bottom 40% on the income scale, so that helps hugely straight away. Secondly, it is very important that we have an opportunity for Departments—they will do this in discussion with us—to consider how best they can ensure that those most in need get the money and support they require.
Julie Hilling (Bolton West) (Lab)
13. If he will make it his policy to begin monitoring the number of people who die as a result of (a) illness and (b) suicide whilst awaiting the result of employment and support allowance appeals.
The Minister of State, Department for Work and Pensions (Mr Mark Hoban)
My Department publishes information on ESA appeals when they have been heard by Her Majesty’s Courts and Tribunal Service. We have no plans to capture or publish official statistics relevant to the specific circumstances described. In July, we published data on the number of deaths of incapacity benefits recipients. They include claimants awaiting appeal where benefit is still in payment.
Julie Hilling
With Atos failing on 40% of its work capability assessments, with an estimated 30 to 80 people dying each week between assessment and appeal, and with 6% of doctors surveyed reporting that they have patients who have either attempted or committed suicide as a result of work capability assessments, does the Minister not think that he has a duty to monitor the effect of his policies?
Mr Hoban
As I said in answer to earlier questions, we are monitoring the effect of our policies. We are ensuring that the work capability assessment is fit for purpose and that is why we asked Professor Harrington to carry out a third review to ensure that the process is right and fair. The hon. Lady should also remember that the work capability assessment is an assessment of people’s ability to work, not a diagnostic test.
Nadhim Zahawi (Stratford-on-Avon) (Con)
Will the Minister confirm that all Atos doctors, nurses and physiotherapists are fully trained and registered with their relevant professional body?
David Mowat (Warrington South) (Con)
14. What recent discussions he has had on the auto-enrolment charging regime for employees.
The Minister of State, Department for Work and Pensions (Steve Webb)
It is vital that people are enrolled in schemes that offer transparent and value-for-money charges. The National Employment Savings Trust’s low charge structure has set a benchmark, prompting several competitive alternatives in the market, and I have called for providers to guarantee not to enrol people into high-cost legacy schemes.
David Mowat
The Minister will be aware of the recent Cass business school report that says that many older defined-contribution schemes charge 3% or more. That is six times the best practice of newer schemes, and it is costing many tens of thousands of people the chance of having a decent pension. Will he act to ensure that people cannot be auto-enrolled into those schemes—by using either a kitemark or a charges cap?
Steve Webb
On the sort of legacy schemes that my hon. Friend refers to, I am pleased to announce that, only today, another provider—Fidelity—has said that fees in its default funds will not exceed 1% and that existing scheme members will have the opportunity to switch out of their current funds. That follows Aviva’s statements that its schemes will have a charge of not more than 1%. It will not allow auto-enrolment into any older-style schemes. I encourage other firms to follow suit.
Kelvin Hopkins (Luton North) (Lab)
Auto-enrolment schemes will still be subject to stock market vagaries, the effects of varying interest rates and inefficiencies of scale. Is not what we really need a 100% state system, where we get defined benefits, as well as defined contributions, and efficiencies of scale and best possible value?
Steve Webb
Two sorts of risk are associated with pensions: financial risk and political risk. We have had SERPs—the state earnings-related pension scheme—which successive Governments cut and cut again. So that scheme did not provide any guarantee either. I want a balance of risks for people, a state promise and a private sector entitlement as well.
Mr Speaker
I say to the hon. Member for Harrogate and Knaresborough (Andrew Jones) that the choreography of when to stand up is an important parliamentary skill, which he is now developing.
Andrew Jones
16. I am developing it as fast as I can, Mr Speaker.
Can the Minister update the House on how employees have responded to auto-enrolment?
Steve Webb
Yes. The first firm to auto-enrol was RBS bank, which did so in July. It had 86% scheme membership before auto-enrolment. That has now risen to 93%. The early signs are encouraging.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)
We now seem to have a consensus across the House on the need for a charge cap. The leader of the Labour party has called for a charge cap on old-style legacy schemes, and the hon. Member for Warrington South (David Mowat) has just done the same. Can the Minister confirm that, when he refers to Aviva charging no more than 1%, that is an average and does not apply to all schemes?
Steve Webb
On the hon. Gentleman’s first point, this is another of the loose ends left by Labour on auto-enrolment. When Labour legislated, it put in practically no quality requirement at all. So Labour required millions of people to auto-enrol but set practically no standards for what they were auto-enrolled into. This is one of the many issues that we are actively tackling.
Gregg McClymont
The Minister has not answered the second part of the question, so I will ask it again. He just told the House that Aviva—I do not single out Aviva, as this is a broader issue—is charging no more than 1% on its schemes. My understanding is that that is an average of 1%, so a scheme could charge 0.4% and another could charge much more. The hon. Member for Warrington South, the leader of the Labour party and I are calling for a cap on old-style legacy schemes. Why does the Minister not get on with this, so that everyone can have a decent retirement scheme?
Steve Webb
Let me clarify the specific point. The statement by Aviva is that
“its schemes for automatic enrolment will have an average total product charge of less than 1%... It will not allow auto-enrolment into…older-style schemes.”
On the charge cap, the danger of the hon. Gentleman’s idea of having, say, a 1% across-the-board cap is that someone can tick the box with 0.99%. Actually, many in the market will offer below that. There is a danger that people will be misled if they are just below the cap, when many lower prices are available in the market.
Gavin Barwell (Croydon Central) (Con)
15. What recent assessment he has made of the level of employment.
The Minister of State, Department for Work and Pensions (Mr Mark Hoban)
There are more than 29.6 million people in work—the highest number since records began over 40 years ago.
Gavin Barwell
In my constituency, unemployment is down by nearly 10% since its peak in February this year. We clearly need to do better still. Does my hon. Friend agree that, contrary to some suggestions, the evidence shows that that is not down to an Olympic blip, but that we are seeing welcome progress month on month, with more and more people finding work?
Wayne David (Caerphilly) (Lab)
What assessment have the Government made of the increasing level of part-time employment?
Mr Hoban
The most recent unemployment figures indicated that 80% of people who work part time actually want to work part time. Many find that part-time work meets their needs in terms of flexible working and returning to the labour market. We need to find more full-time jobs, but we should recognise that 80% of people want to work part time and the labour market is able to accommodate them.
Pauline Latham (Mid Derbyshire) (Con)
17. What progress his Department has made on its plans to support separated families.
The Minister of State, Department for Work and Pensions (Steve Webb)
The Government have already announced a £20 million investment in the development of support for separated families in the current spending review period. This will include provision of an online distributable web application to be launched later in the autumn, and up to £14 million for the new innovation fund to support separated families.
Pauline Latham
I thank the Minister for that answer. Will he reassure the House that the £14 million innovation fund will be spent on projects that will ultimately benefit children, and will he explain how that will be achieved?
Steve Webb
Yes. We have had 100 expressions of interest from voluntary groups and charities, and we have whittled that down to about 30. All are trying to build on existing work that enables parents, when they are separating, to deal with each other in a mature way in the interests of the children. That is the central aspect of our new strategy.
Kerry McCarthy (Bristol East) (Lab)
When family breakdowns occur, grandparents, aunts, uncles or other relatives often have to step into the breach and a kinship care situation arises. Will the Minister assure me that he is talking to his colleagues in other Departments to make sure that when that situation happens, particularly in an emergency, support is given to those who step up to the plate?
Steve Webb
I agree that we need to support kinship carers, such as grandparents. One change that our Department has made is that, for example, where a mother is going out to work and is not using the national insurance credits that she would have gained for receiving child benefit, they can be passed to a grandparent, who may not be of pension age, to make sure that they are not financially disadvantaged. That is just one of the things we are doing to support that important group.
Jonathan Evans (Cardiff North) (Con)
18. What steps his Department is taking to ensure that older workers with little private pension provision are not disadvantaged by the introduction of auto-enrolment.
The Minister of State, Department for Work and Pensions (Steve Webb)
Our research shows that even under the current rules 99% of savers will get back at least as much as they put in under auto-enrolment, and around 70% will get back twice as much. In addition, our state pension reforms will support planning and saving for retirement by delivering a simpler, single, flat-rate pension set above the basic level of the means test.
Jonathan Evans
I accept that those were the calculations made in 2010 as part of the auto-enrolment review, but since that time we have seen investment returns fall so much that the Financial Services Authority is ordering the industry to downscale its forecasts and we have also seen annuity rates fall. Have the Government recalculated their figures to take account of that?
Steve Webb
The short answer to the hon. Gentleman’s question is no. However, one important point I would raise is that if someone only builds up a very small pension pot, they have a legal right to take it, in most circumstances, as a cash lump sum with a quarter tax-free. Even someone later in life can get an employer contribution tax relief—a lump sum taken with a tax-free contribution. That will be attractive, even in later life.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
20. What steps he is taking to tackle the causes of social breakdown.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
Last week we published the social justice outcomes framework, which has a set of indicators that highlight our priorities: to eradicate family breakdown, educational failure, worklessness, addiction and crime, and to grow the social investment market—a big area for us. The framework will measure our progress towards achieving these aims, shifting the policy focus and spending towards outcomes rather than inputs.
Stephen Metcalfe
Can my right hon. Friend tell the House how projects supported by the innovation fund will tackle social breakdown?
Mr Duncan Smith
Indeed I can. The innovation fund was set up by me when I came into the Department. It consists of approximately £30 million of seedcorn funding to enable voluntary groups, charities and organisations—beyond the normal organisations that one comes across in the work process—to show that their programmes, which help people to deal with drug addiction, family breakdown or gang violence, actually work, to prove that concept, and to set them up to be able to run those programmes. At least 11 social impact bonds have come out of this and we have just launched a second round.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Does the Secretary of State agree that much social breakdown stems from intergenerational worklessness? Is he as enthusiastic as many Opposition Members are about the Heseltine review, “No Stone Unturned”? Will he ensure that he takes a positive role in bringing some—indeed, most—of those recommendations to fruition?
Mr Duncan Smith
When one of the big beasts from the past roars, it is always difficult not to be incredibly enthusiastic about what they are roaring about, so I accept the hon. Gentleman’s invitation to express my interest and support for the report. Obviously there are details in it, but he makes the vital point that in too many communities there are families of two and three generations that have been beyond the work cycle. This is about getting them back into the idea of work not just for the money but because their whole lives disintegrate without it. I agree with him and will certainly make sure I tell Lord Heseltine how supported he is.
Gemma Doyle (West Dunbartonshire) (Lab/Co-op)
21. What assessment he has made of the effectiveness of the youth contract; and if he will make a statement.
The Minister of State, Department for Work and Pensions (Mr Mark Hoban)
The youth contract was introduced in April 2012 to provide additional support worth almost £1 billion to unemployed young people over the next three years. Although it is too early to make any judgments of its effectiveness, we have commissioned an external evaluation of the youth contract to examine delivery and outcomes, and the first report will be available early next year.
Gemma Doyle
I notice that the Minister gives a cautious response. Is it true that millions of pounds that we should be using to get young people into work are sitting unallocated and helping no one, because the Government cannot get employers on board with the youth contract?
Mr Hoban
A number of young people have been helped by various aspects of the youth contract. Twenty young people in the hon. Lady’s constituency have had work experience as a consequence of it, and another group has been helped into work as a result of the sector-based work academies. I hope that she is doing all she can in her constituency to champion the youth contract and to get more young people into work.
Bob Blackman (Harrow East) (Con)
23. What assessment he has made of results of the housing benefit demonstration projects.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
The demonstration projects are testing direct payment of housing benefit to social rented sector tenants in six areas across England, Scotland and Wales. Their purpose is primarily to help people manage their rent in advance of a move into work and the introduction of universal credit. We have commissioned an independent action research-based evaluation of the projects, and the results of initial research will be published in early December.
Bob Blackman
I thank my right hon. Friend for his answer. Will he elucidate on some early learning that has come from the second learning report, which was recently published via the learning network?
Mr Duncan Smith
That is a lot of learnings, but I will do my level best to help my hon. Friend. I shall tell him what we know so far. Some of these are early figures, but interestingly, after all the scaremongering about how people would be unable to cope, which, as we know from the local housing allowance, is not the case, the centre at Sheffield Hallam university has found so far that only 2%—less than people thought—of claimants moved because of eviction or a landlord refusing housing to housing benefit tenants, and few claimants gave financial reasons for actually moving. So we are making some good discoveries. We are on the right track and heading in the right direction.
Teresa Pearce (Erith and Thamesmead) (Lab)
24. What discussions his Department has had with Baroness Grey-Thompson following the publication of her report on the effect on disabled people of the introduction of universal credit.
The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey)
Since Baroness Grey-Thompson’s report was released, I have attended meetings with her twice where the contents of her report have been discussed.
Teresa Pearce
“Holes in the Safety Net”, the report just mentioned, indicated that about 450,000 disabled people lose out under the universal credit rules. This number was also raised by my hon. Friend the Member for Aberdeen South (Dame Anne Begg), the Chair of the Work and Pensions Committee, in a recent Westminster Hall debate that the Minister attended. Will she listen to these two highly respected women and amend her plans?
Esther McVey
We have been listening very much. We found some of the reports to be highly selective and quite skewed. They did not take into consideration how much extra support was going to people with disabilities, but we are listening, there is transitional protection and we will be releasing the assessment criteria later in the year.
Mr David Ward (Bradford East) (LD)
The Minister has no doubt read today’s copy of Bradford’s The Telegraph and Argos and the letter from Mr Barry Thorne about his son. He felt compelled to write the letter following the comments from Dame Tanni Grey-Thompson. The fear is that those with clearly defined medical concerns, such as his son Stephen, will feel threatened and fearful at the prospect of reapplying and being interviewed. Are those fears unfounded?
Esther McVey
I believe that those fears are unfounded. Everybody tries to put information into the public arena that is meant to help, but frequently they do not, and instead raise fears. The whole reason for having a face-to-face interview is so that the claimant can explain clearly why they might need the benefit.
Yvonne Fovargue (Makerfield) (Lab)
25. Whether he plans to withdraw eligibility for housing benefit from people aged under 25.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
My right hon. Friend the Chancellor of the Exchequer will announce the Government’s expenditure plans in the autumn statement in a few weeks. Until then all discussion about further reform remains, as it always will do, somewhat speculative.
Yvonne Fovargue
Would not removing entitlement to housing benefit from people aged under 25 increase youth homelessness and youth unemployment?
Mr Duncan Smith
As I said, we are happy to look at all these proposals. We are discussing them right now, as has been made clear by my right hon. Friend the Prime Minister and by the Chancellor. But it is worth putting a few features in the public domain. The key issue is that young people who are not eligible for benefits do all sorts of things such as sharing flats and working hard. They use much of their expenditure, on low pay sometimes, to get themselves accommodation. What we are looking to do is make sure there is parity—fairness—in the system so that those who are in a slightly different situation do not get an advantage which is not necessary. It is worth telling the hon. Lady something about that group. About 400,000 claimants who are under 25 are receiving around £2 billion a year, and shared accommodation rates extend to under-35s. That is a lot of money and it is worth looking at.
Greg Mulholland (Leeds North West) (LD)
The Department’s own family resources survey shows that only 10% of under-25s live independently. When we take out all the essential exemptions for people who cannot live with family, the number covered would be very small, so why are we talking about a policy that does not add up economically?
Mr Duncan Smith
As I said previously, we are looking at all this. Anyway, entitlement would never be removed from those who are already on housing benefit. The review is about flow and about re-establishing fairness in a system which many think has become unfair and does not help those who are not eligible for such benefits. I accept that there would be people who would be ineligible. That is the point of examining the system and figuring out how the policy would go, but like all policy reports, it is worth looking at. It deals with an element of unfairness and the thing about the benefits system is that if it is unfair, people who should support it will not support it, such as taxpayers.
Lilian Greenwood (Nottingham South) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
We have been rolling out the innovation fund, which has so far been very successful, as I said in answer to an earlier question. About 11 social impact bonds have now been launched. The successful bidders in the second round, Prevista, Social Finance and 3SC, will deliver support for our most disadvantaged 14 and 15-year-olds, restoring hope and aspiration to young people in care who are disengaged from school and involved in gangs, crime and drugs. It is a very, very good project.
Lilian Greenwood
Dr Sue Atkinson, a mental health professional in my constituency, recently told me about the appalling misjudgments that she and her colleagues have witnessed, when their clients’ needs and capabilities have been completely ignored in the work capability assessment process. Why will the Secretary of State not act now to review and revise a system which is clearly failing?
Mr Duncan Smith
There is an awful lot of lost memory among Opposition Members. It was they, when they were in government, who set the process up. It is this Government who have made all the alterations, thanks to Professor Harrington, that have improved the situation. We are doing exactly what the hon. Lady requests. I wish she would speak to members of her Front-Bench team and avail them of that information.
Andrew George (St Ives) (LD)
T2. Disability Cornwall has expressed concern to me that its good name has been used by the company Atos when bidding to undertake the personal independence payment assessments, when in fact no such discussion regarding a potential local partnership has ever taken place between Atos and Disability Cornwall. Does the Minister agree that this may have resulted in Ministers being misled? Will the matter, therefore, please be investigated?
The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey)
To correct my hon. Friend, what the contract said was, “Should we win the contract, the sort of people we would look to negotiate with would be Disability Cornwall”—[Interruption.] The right hon. Member for Stirling (Mrs McGuire) is passing comments from a sedentary position; she may be thinking of a different matter altogether. In regard to Disability Cornwall, Atos’s position was that should it win the contract, it would look to negotiate with Disability Cornwall.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
May I first associate everyone on the Opposition Benches with the words of commemoration for our much treasured colleague, Malcolm Wicks, who is sorely missed?
Will the Secretary of State confirm that the introduction of universal credit is proceeding according to its original timetable?
Mr Duncan Smith
I can indeed. As we have said, we will start the process nationwide in October, although we have introduced an earlier start for a pilot programme, as the right hon. Gentleman is aware, because he came into the office to talk to me about it. He knows very well that, as I explained then, the four-year process will be completed exactly as we have intended, on time and on budget.
Mr Byrne
That is curious, because last year the Secretary of State told us that every new claim for out-of-work support would be treated as a claim for universal credit from next October, but the Minister of State, the hon. Member for Fareham (Mr Hoban), told Parliament on 26 October that the rules for universal credit from 2013 onward are still “under development.” What on earth is going on? On Atos, on caps on pension charges and now on universal credit, it does not appear that the Secretary of State has got a grip.
Mr Duncan Smith
If the right hon. Gentleman does not mind, I must say that that is a rather pathetic question. The reality, as he knows very well—he came into my office to discuss these matters and we showed him exactly what we are doing—is that there is no change. The reality is that over the four years we will bring universal credit completely online—it will be completed by 2017. I wish he would spend more time working on his brief, rather than writing books on China.
Julian Sturdy (York Outer) (Con)
T3. Like all hard-working taxpayers, I support the Government’s attempts to reduce benefit fraud. However, I have recently received correspondence from a terminally ill constituent whose support has been wrongly withdrawn. Will the Minister assure me that those who truly deserve support, such as my constituent, will benefit from our introduction of a fairer welfare system?
The Minister of State, Department for Work and Pensions (Mr Mark Hoban)
My hon. Friend makes an important point. That is exactly why we have been working with Professor Harrington to implement the findings set out in his report. One of his findings relates to cancer sufferers, which is why we published new guidance last month on how they should be treated under the work capability assessment.
Fiona O'Donnell (East Lothian) (Lab)
T6. Many of my constituents who devote a great deal of effort to providing Atos with detailed medical supporting evidence will be deeply disappointed with the Minister’s earlier answer. What steps is he taking to ensure that Atos takes full account of medical evidence when determining work capability assessments—
Fiona O'Donnell
I appreciate that the Minister is eager to answer and look forward to hearing from him. I ask that because at the moment Atos is simply ignoring that evidence.
Mr Hoban
What the work capability assessment does is assess people’s ability to work. It is a review of their capability and functionality, not a diagnostic assessment. That is why the assessment takes place. Of course, it is right that claimants bring along medical evidence, but it must be read in conjunction with the Atos assessment. Decisions about eligibility for employment and support allowance are made by DWP staff, not Atos.
George Hollingbery (Meon Valley) (Con)
T4. The Government have made it clear that although they are keen that most people should be able to deal with the direct payment of housing benefit, that will not be appropriate for all. Will my right hon. Friend reassure the House, and those outside who are concerned about women’s refuges and their futures, that direct payment may be waived in those circumstances?
Mr Duncan Smith
My hon. Friend raises a very important issue. We are already in discussions with such groups and have made it clear that anybody suffering domestic violence will immediately be taken through the system and the money will be paid directly. The refuges, as we have already said, will get their money and there will be no hesitation. That is an absolutely critical area and it will be provided for completely by universal credit.
Mr Stephen Hepburn (Jarrow) (Lab)
T9. My local citizens advice bureau is getting 30 new work capability assessment cases every week, and 80% of them are won on appeal. That is because the Government are forcing sick people who have cancer or brain damage or who are dying back into work. It is a disgrace. When will this barbarity end?
Mr Hoban
As I have said a few times today—I will continue to say it—this process was put in place by the previous Government, a Government the hon. Gentleman supported. What we are looking to do is ensure that those people who can work get the support they need to get into work, rather than abandoning them to a lifetime on incapacity benefit, which he seems to think is the better option.
Duncan Hames (Chippenham) (LD)
T5. Is the disabilities Minister satisfied that the proposed descriptors for the personal independence payments adequately recognise the impact of Crohn’s disease, colitis and irritable bowel syndrome on the daily lives of our constituents who live with those conditions and the invisible disabilities that they endure?
Esther McVey
I am indeed. As my hon. Friend will know, it is not about the condition, but about how each individual person copes with the condition; and yes, I am happy with the criteria.
Mark Durkan (Foyle) (SDLP)
T10. The Fair Pensions report, “Whose Duty? Ensuring effective stewardship in contract-based pensions”, highlights the relative lack of quality standards being applied to UK schemes, as opposed to other jurisdictions such as Australia. The Minister referred to active steps being taken in relation to auto-enrolment. Do those steps extend to re-visiting actively the qualifying criteria and the default fund guidance?
The Minister of State, Department for Work and Pensions (Steve Webb)
The hon. Gentleman is right to raise the important issue of governance. We do not think that we have a significant problem with the early stages of automatic enrolment for the biggest firms. They are coming in at a low cost and are well governed. The issue will arise further through the process and we are indeed looking at the quality of schemes into which people are auto-enrolled, including charges and governance.
Andrew Jones (Harrogate and Knaresborough) (Con)
T7. What progress is being made to ensure that work capability assessments are sensitive to fluctuating medical conditions such as stroke care?
Mr Hoban
My hon. Friend makes a useful point. Professor Harrington highlighted in his second review the issue of fluctuating conditions. We are working on an evidence base to look at descriptors for fluctuating conditions, to make sure that they are taken properly into account in the work capability assessment.
Dame Anne Begg (Aberdeen South) (Lab)
When the Government started to move people from incapacity benefit to employment support allowance, provision was made for those who were particularly or very disabled so that they would not have to go through the work capability assessment and would go straight into the support group. However, a number of my constituents have been moved from incapacity benefit and on to the work-related activity group of ESA without first going through a work capability assessment. How widespread is this, how many people is it happening to, and why is it happening?
Mr Hoban
I would be grateful if the hon. Lady supplied me with the evidence she mentions. There are clearly situations in which people go straight into the support group without undergoing a work capability assessment. It depends on the information supplied when they originally make the application.
George Freeman (Mid Norfolk) (Con)
T8. The scandalously high rate of youth unemployment was perhaps one of the previous Government’s worst legacies, and my constituents warmly welcome the creation of 1 million new jobs and 600,000 apprenticeships. Does the Secretary of State agree that in rural areas young jobseekers face particular challenges in accessing small, fast-growing companies in the rural economy, and will he join me in supporting the local voluntary big society initiative launched by The Norfolk Way—it started a work club and enterprise bursary in which local entrepreneurs support jobseekers—in Mid Norfolk last week?
Mr Duncan Smith
I pay tribute to the work that my hon. Friend does in his area. I absolutely agree with and support what he says. It is really interesting that youth unemployment was rising in the previous Government’s last six years, even in a time of growth. They fiddled with the figures so that anybody who was unemployed for more than 10 months went on a course; most of them ended up returning to unemployment, where they started from zero again. The then Government deliberately and falsely capped the figure. We are honest about it and tell the truth.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
We have been told that Professor Harrington’s recommendations on the introduction of mental health champions to improve work capability assessments have been implemented, yet only two mental health champions cover the whole of Scotland and both of them are based in the central belt. What steps have Ministers put in place to measure the effectiveness of mental health champions?
Mr Hoban
We have introduced a mental health champion in every single assessment centre throughout the country. We have asked Professor Harrington not only to look at new changes, but to review changes that have already been proposed and to monitor their effectiveness. We will continue to follow that process.
Damian Hinds (East Hampshire) (Con)
On the housing benefit demonstration projects, what assessment has been made of potential budgeting accounts—so-called jam-jar accounts—to help people manage all their finances and build up a savings pot?
Mr Duncan Smith
My noble friend Lord Freud has already discussed with all the financial institutions how to construct systems that support people who may have budgeting issues. The phrase “jam-jar accounts” is an unsophisticated term for such systems, but by and large they help people apportion the money necessary for their rent, food and so on, so that they can see that money flow in and then take it out. On housing benefit, a key area of the local housing allowance will be that we will not allow people to build up arrears of debt. We will intervene early to make sure that that does not happen, which should help landlords understand that we will support them.
Kate Green (Stretford and Urmston) (Lab)
Ministers assured us that the flexibilities introduced for lone parents on jobseeker’s allowance under Labour would continue, yet the number of lone parents who have been sanctioned has risen dramatically. In a written answer on 24 October the Minister said that the reasons for sanctions were exactly the same as those for other jobseekers. Can the Secretary of State explain exactly how those flexibilities are being properly applied and what training is being delivered to personal advisers in Jobcentre Plus?
Mr Hoban
I think we all believe that it is important that where lone parents can work, they should work, because that helps to boost their income and that of their family. Guidance is given to personal advisers on jobseeker’s allowance to ensure that the sanctions regime is applied appropriately to lone parents, as in the case of all jobseekers.
Mr Edward Leigh (Gainsborough) (Con)
What, hitherto, has been the fraud and error rate in child benefit?
Mr Duncan Smith
It would be pretty negligible because it is paid to everybody, and it would therefore be impossible to figure it out. Across the board in the Department for Work and Pensions, we are beginning to see a downward pressure on fraud and error. My hon. Friend will be pleased to see that over the next few years we will be saving considerable amounts of money.
David Wright (Telford) (Lab)
How many people who have been medically retired from their jobs with severe conditions are being put through the work capability assessment and having their benefits attacked?
Mr Hoban
I do not have the precise figures to hand, but I will look into them and write to the hon. Gentleman. It is important to remember—I think there is agreement on both sides of the House about this—that working helps many people’s medical conditions; there is very strong evidence to support that. That is at the heart of the work capability assessment that Labour introduced when in government, and we are trying to sort out the problems with it.
Jake Berry (Rossendale and Darwen) (Con)
With 70% of social housing tenants having no access to the internet, will the Secretary of State update the House on what progress he is making for a low or no-cost social housing tariff to be overlaid on the existing BT Basic package to enable social housing tenants to access universal credit online?
Mr Duncan Smith
In fact, many more people access the internet daily than a lot of people think. Some 78% of all benefit recipients access the internet, and about 48% do so on a daily basis. Obviously it is our job to try to get that figure up, because if people cannot access the internet that affects their employment prospects given that 92% of all jobs require some computer skills. This is an opportunity and, yes, we are looking at that passported benefit to make sure that those who need the money get the money directly.
Angela Smith (Penistone and Stocksbridge) (Lab)
Universal credit is due to be up and running in less than a year. Surely by now the Secretary of State should be able to give us some detail about who will be eligible for free school meals.
Mr Duncan Smith
We are talking to the Departments involved about how best they want to make this work. They will make it work, and we will come forward very soon with some very clear indication of how it is going to work. The hon. Lady should rest assured that the purpose of this is to make sure that those who need and deserve the money get the money, and I can guarantee that that will be the case.
Dog Micro-chipping
Gareth Johnson (Dartford) (Con)
It is a pleasure to present this petition on behalf of the pupils and staff of Our Lady of Hartley primary school, an excellent school in my constituency. The children there held a first-class debate on the subject and collected signatures at the school gates. The children have asked me to present this petition to the House.
The petition states:
The Petition of pupils and teachers at Our Lady of Hartley Primary School,
Declares that it is sensible to have all dogs micro-chipped as puppies; further that the Petitioners believe that this will reduce the amount of lost or abandoned dogs and will also help to ensure that the owners of dangerous dogs can be held to account as the Petitioners believe it is the owners, not the dogs, who are at fault; further that the Petitioners do not wish for micro-chipping to be made compulsory but wish it to be strongly encouraged and made accessible for all in terms of cost.
The Petitioners therefore request that the House of Commons urges the Government to consider measures to encourage dog owners to have their dogs micro-chipped and that the Government seek to reduce the cost of micro-chipping puppies.
And the Petitioners remain, etc.
[P001127]
Business of the House
(12 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Leader of the House of Commons (Mr Andrew Lansley)
With permission, Mr Speaker, I should like to make a short business statement.
The business for tomorrow will now be:
Tuesday 6 November—Motion to approve the Second Report 2012-13 from the Standards and Privileges Committee, followed by Second Reading of the European Union (Croatian Accession and Irish Protocol) Bill, followed by motion to approve European documents relating to Banking Union and Economic and Monetary Union.
The business for the next day will be:
Wednesday 7 November—Opposition day [8th allotted day]. There will be a debate on regional pay in the NHS, followed by a debate on the criminal injuries compensation scheme. Both debates will arise on an Opposition motion.
The business for the rest of this week remains unchanged, as follows:
Thursday 8 November—Debate on a motion relating to the medium-term financial plan for the House of Commons administration and savings programme, followed by general debate on stimulating growth through better use of the prompt payment code. The subjects for these debates have been nominated by the Backbench Business Committee.
Friday 9 November—Private Members’ Bills.
I will, as usual, announce further business during the business statement on Thursday.
Mr Speaker
The hon. Member for Wallasey (Ms Eagle) does not wish to contribute. We are grateful to the Leader of the House, and if there are no questions—this is almost unprecedented in respect of anything said by the Leader of the House or any other Government representative—we shall move on.
Growth and Infrastructure Bill
21:56 - The House divided: - Ayes: 305 / Noes: 213 - Question accordingly agreed to.
The Secretary of State for Communities and Local Government (Mr Eric Pickles)
I beg to move, That the Bill be now read a Second time.
Two years ago, the coalition Government were formed to take the country from difficult times to better days. In the coalition agreement, we pledged to build a new economy from the rubble of the old, to support sustainable growth, balanced across all industries and parts of the country, and to champion enterprise and aspiration. We pledged to shift power from unelected quangos to elected representatives, communities, neighbourhoods and individuals. Most urgently, we pledged to take immediate action to tackle the deficit and get the public finances back on track.
Mr Clive Betts (Sheffield South East) (Lab)
Will the Secretary of State give way?
Mr Pickles
I will give way in a few moments.
Since those heady days of May 2010, the economy has been buffeted by the problems of the eurozone. All western economies face the ongoing consequences of the banking collapse and the last decade of boom and bust. The world has changed, however, and so must we. The west is slipping down international league tables as emerging economies push ahead with energy and drive. Countries that make it will be those that step up to long-term challenges to get the economy growing, build more homes for a growing population, and provide factories, offices and infrastructure for the 21st century.
Kelvin Hopkins (Luton North) (Lab)
The Secretary of State talks about building more homes. Tens of thousands of homes could be built on land banks, but builders are holding back until the economy recovers and house prices increase, so that they make more profit.
Mr Pickles
I am sure the hon. Gentleman was delighted to see the latest figures that show a net increase of 11% in the number of homes—the biggest increase since 2007. I hope that he will work hard to persuade fellow Labour Members to get behind the Government’s schemes.
Simon Hughes (Bermondsey and Old Southwark) (LD)
Will the Secretary of State confirm that, whatever details the Bill contains to allow greater flexibility in housing development, the Government are absolutely committed to having more affordable homes in England, and for more of those homes to have social or target rents for constituents such as mine?
Mr Pickles
My right hon. Friend can rest assured that the Government are confident of being able to deliver 170,000 homes, and of ensuring affordable homes for those who need housing. That is considerably better than in any of the past 10 years when the Labour party was in power.
Mr Pickles
I will, of course, give way to the Chair of the Communities and Local Government Committee.
Mr Pickles
No, it is accountable to Ministers and directly to this House, which I think restores the political balance.
The coalition has taken a number of measures to ensure that Britain can compete in a global world. The Local Government Finance Act 2012, which received Royal Assent last week, provides new incentives for councils to support enterprise and local firms, through the local retention of business rates. Local enterprise partnerships are ensuring that local councils work hard with local businesses to bring about growth. We are also looking in detail at Lord Heseltine’s practical recommendations on how we can further devolve power and funding. Through the wide-ranging Localism Act 2011, we are abolishing unelected quangos such as the Infrastructure Planning Commission and regional assemblies, replacing them with democratic accountability at national, local and neighbourhood levels. We are also scything through the reams of planning red tape imposed by Labour’s Planning and Compulsory Purchase Act 2004, Planning Act 2008 and Local Democracy, Economic Development and Construction Act 2009.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Will the Secretary of State reassure my constituents, many of whom have fought hard for traditional community and village greens? He will know that some of the developers are absolutely ruthless. In Huddersfield, a company called Padico has bought up bankrupt stock and then spent enormous amounts of money trying to reverse a High Court decision about a village green. He knows how ruthless some of the developers are, so will he say whether our traditional village greens will be more vulnerable as a result of this Bill?
Mr Pickles
The national planning policy framework actually strengthens green spaces.
Mr Peter Bone (Wellingborough) (Con)
Is the Secretary of State aware of how much work his Minister of State is doing to unfreeze the blockages that some projects face because of red tape? Only recently our hon. Friend visited Wellingborough to cut through the red tape facing the Wellingborough East development and help with the Skew Bridge retail development, which is opposed by Labour in Corby.
Mr Pickles
I am delighted to hear about the magnificent work done by my hon. Friend the Minister of State. I have to say though, it comes as no surprise to me that he is working very hard indeed.
Robert Halfon (Harlow) (Con)
Will my right hon. Friend confirm that, despite what is being said in the media, the planning guidance hands back local power to local people, in particular through the neighbourhood plans?
Mr Pickles
Of course it does, and it is pleasing that so many local authorities now publish a plan much more quickly and in a much better way than under the old system.
To return to the national planning policy framework, we have streamlined 1,000 pages of planning guidance down to a mere 50 pages and opened up the planning system, which is no longer the preserve of lawyers, town hall officers and non-governmental organisations, but there is more to do.
Mr Jim Cunningham (Coventry South) (Lab)
Will the right hon. Gentleman give way?
Mr Pickles
I think it would be reasonable to make a little progress now.
Now some reforms can be delivered by circular and some by order, while others rightly require primary legislation in Parliament. The Bill we are introducing today has three key themes: boosting Britain’s infrastructure, cutting excessive red tape and helping local firms to grow. Let me deal with each in turn.
Mr John Redwood (Wokingham) (Con)
I welcome the wish to get on with sensible infrastructure development, and I see that there are provisions to speed up planning permissions for power stations. As EU carbon dioxide regulations will entail the closure of a lot of necessary power stations quite soon, how much quicker will things be under the new procedures? We need to get on with it.
Mr Pickles
The new procedures remove a lot of the old regulations, which have been superseded by time, and make it much easier for those providing power to adapt to modern conditions. Technologies have improved, and the new procedures will enable us to adapt to them.
Mr Jim Cunningham
Is the Secretary of State aware that in Coventry there is a considerable need for social housing in particular? Does he have any incentives on offer to unlock more housing and make a bit of progress?
Mr Pickles
I am sure the hon. Gentleman will be pleased that Coventry has made enormous strides in recent months to ensure that planning applications—particularly for large sites—have improved considerably, so that they are now pretty close to meeting all the necessary requirements. I am sure that he will be delighted with the additional effort the Government have made on social housing and that, as someone who cares about it deeply, he will have felt highly embarrassed by the failures of his Government.
Mr Crispin Blunt (Reigate) (Con)
May I thank my right hon. Friend and his colleagues for the assurances that they have given so publicly about the green belt? I represent a constituency that is wholly within the metropolitan green belt, where the green belt is at its narrowest around London, and he will understand the anxiety of my constituents over this matter. What concerns does he have about threat to the green belt posed by the regional spatial strategies that were introduced by Labour?
Mr Pickles
The regional spatial strategies represent the single greatest threat to the green belt. In them, the Labour Government imposed housing targets on local areas that would effectively have ripped up vast sections of the green belt. We are consulting on the strategies, and I assure the House that I have a completely open mind on that consultation. Once it is over, we will come to a decision on their future.
Kick-starting infrastructure will not only promote construction jobs but ensure long-term, natural expansion. The Bill will unlock billions of new investment in energy projects through repealing outdated energy laws. Thankfully, the Energy Act 1976, which sought to restrict gas use because of the energy shortages at the time, is now redundant. We no longer have to legislate in that way to keep the country’s lights on. This Bill will allow companies to vary consents to incorporate the latest technology and to make their plants more energy efficient.
The Bill will remove the excessive red tape that hinders superfast broadband from being rolled out to local homes and businesses. It will especially help those parts of rural Britain facing a digital divide. As hon. Members will recall, it was telecommunications deregulation in the 1980s that created the modern communications industry that we enjoy today. Measures such as abolishing the special TV licences for satellite dishes and introducing permitted development rights for those dishes are the reason that we have television channels such as Sky News and our own beloved BBC Parliament channel. Satellite dishes can be put up without planning permission. Why should not we be able to do the same with 21st-century broadband technology?
Dr Sarah Wollaston (Totnes) (Con)
My constituency covers part of the Dartmoor national park, where there is real concern about a proliferation of radio masts. Does the Secretary of State accept that there is good evidence that national parks around the country already work sensitively to promote rural broadband?
Mr Pickles
And I am sure that they will under this Bill. These regulations are not a free-for-all. All that they will do is apply the prior approval regime. Local planning authorities will be able to object to inappropriately placed posts and wires. For the sake of clarity, given the appalling scaremongering by the shadow spokesman in the Labour party on these issues, I should like to point out that these measures do not relate to 4G. We are a long way from considering 4G improvements; these measures relate exclusively to broadband, and to ensuring that my hon. Friend’s constituency has an equal chance with those of constituencies in other parts of the country that have broadband.
Guy Opperman (Hexham) (Con)
I represent the constituency that contains the Northumberland national park. Kielder forest has more than 200,000 trees but no mobile phone or broadband coverage whatever. The Forestry Commission says that it is the only place in the country where it cannot contact its representatives at all. We welcome these provisions.
Mr Pickles
I shall give way to the hon. Gentleman, who I am sure will entertain us.
Bill Esterson
When the Under-Secretary of State for Communities and Local Government, the hon. Member for Grantham and Stamford (Nick Boles) gave evidence to the Select Committee a few weeks ago, he was asked repeatedly about how the issue of the correct size of extensions in back gardens would be dealt with. He made it very clear that planning departments would rely on people to dob their neighbours in if they had exceeded the permitted size. Does the Secretary of State think that this will lead to the snoopers’ charter that his colleague suggested when he gave that evidence?
Mr Pickles
That question might have sounded like a good idea earlier this morning, but this is the wrong Bill, the wrong matter and the wrong debate in which to raise it. If the hon. Gentleman writes to me, no doubt we will do our best to help.
In an internet age, Britain must be able to compete virtually; otherwise, businesses will literally select another country at the click of a mouse. We live in a connected age, but technologies also make our society interdependent. Everyday families take for granted the “just-in-time” technologies that stock our supermarkets and drop off internet deliveries to our doors. To make them work, however, we need to build and provide the storage depots, warehouses and rail exchanges, and the supporting energy infrastructure to keep the economy moving.
The number of large-scale business and commercial applications taking over a year to determine is rising, so this Bill will allow an alternative process to decide nationally significant business and commercial projects within 12 months of the start of examination. Existing requirements to consult local communities will be retained, as will democratic checks and balances.
Mr Pickles
Of course I will give way to the very distinguished gentleman. [Interruption.] Or were there two distinguished Members standing together?
Mr Speaker
On this occasion, I believe the Secretary of State is referring to a former Minister of State—with no disrespect to the hon. Member for Northampton South (Mr Binley), whose distinction is universally known.
Mr Raynsford
I am grateful to the Secretary of State for giving way, and hope this will not cause him any difficulty with his colleague. How will “nationally significant developments” be defined? What definitions will be used to decide whether developments are nationally significant and thus fall within the remit?
Mr Pickles
First, there are national policy statements, in addition to which we are going to consult. Let me be absolutely clear that it is our ambition to ensure that, providing local authorities put together a planning performance agreement with these large developments, this measure will not be necessary; it is there to help. I give way now to my distinguished hon. Friend.
Mr Binley
I am grateful and I understand why my right hon. Friend gave way to a much more distinguished Member than me.
Let me refer to the issue of infrastructure—not only of utilities, but housing. I know that my right hon. Friend is very aware of the need to build on brownfield sites first, so can he tell me what work his Department is doing to ensure that, when planning permission is given, proper surveys of brownfield sites in a given area are undertaken before greenfield sites are built on?
Mr Pickles
That is a reasonable point. My hon. Friend will know—I know he is an assiduous reader of these things—that the national planning policy framework indeed lays out a test to look at brownfield sites. In a few moments, I shall come on to a few additional measures that will make my hon. Friend even happier than he is currently.
John Healey (Wentworth and Dearne) (Lab)
May I press the Secretary of State on the point raised by my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford)? The Bill extends to commercial and business developments the system for nationally significant infrastructure projects. The Secretary of State has just said that there will be national policy statements for reference, so is he saying that national policy statements will be prepared for commercial and business developments? Otherwise, I think he might have mis-spoken; perhaps he could make himself clear.
Mr Pickles
There are obviously national policy statements—full stop. In addition, we are consulting on where these should bite in. We will be looking most carefully at those authorities that have not been able to meet these targets, but there is a big distinction—[Interruption.] We are not including housing or eco-towns. We are not suddenly going to impose big developments without local people having a say. That is the difference between Government and Opposition Members.
Cutting excessive red tape is the Bill’s second theme. The Bill will enable us to implement the reforms recommended by the Government’s Penfold review, which examined the multiple, overlapping development consents that were needed for many projects on top of planning permission. While much of the review is being implemented via secondary legislation, other parts require primary legislation. The Bill removes or streamlines duplicate regimes for highways, rights of way, and town and village green registration.
Let me stress, for the avoidance of doubt, that we are maintaining the strongest protection for England’s village greens. Indeed, the national planning policy framework has created a new planning protection for valuable green open spaces. However, we will need to prevent the registration system from being misused to hinder and slow legitimate, planned development. A review conducted by the Department for Environment, Food and Rural Affairs in 2009 slammed
“the existence of two parallel systems”
—village greens and planning—
“between which there is minimal communication”.
It added that, in the view of the Government of the day,
“this seems to be problematic”.
The problem lay with the last Government’s Commons Act 2006. Labour DEFRA Ministers told Parliament in 2009 that there would be a consultation to streamline the confusing regime and that the results would be published in 2010, but nothing happened. I wonder why. Perhaps the former Secretary of State for Environment, Food and Rural Affairs, the right hon. Member for Leeds Central (Hilary Benn), will take the opportunity this afternoon to apologise to the House for his tardiness.
We are also reforming special parliamentary procedure to remove a duplicate consent regime, introduced as a result of the poor drafting of the Bill that became the Planning Act 2008. As the Ways and Means Committee in this House and the Chairman of Committees in the other place have stated,
“since the 2008 Act did not amend the 1945 Act, we now have a statutory framework which is internally contradictory.”
The Bill removes that overlap, while retaining parliamentary safeguards for land with genuinely “special” historic and parliamentary protection, such as National Trust and common land.
The Bill also cuts red tape by allowing the renegotiation of economically unrealistic section 106 agreements. These measures go hand in hand with changes to secondary legislation on which we have consulted. In our sights particularly are affordable housing requirements that were negotiated at the height of Labour’s unsustainable housing boom. Now that the Brown bubble has burst, bringing us back to reality with a bump, we recognise that 75,000 homes, with planning permission, are lying unbuilt.
Mr Pickles
Not for a while.
Unviable section 106 agreements have led to no development, no negotiation, and no community benefits.
Mr Pickles
I will give way in a moment. I ask the hon. Gentleman to be patient, and allow me to develop my point.
More affordable housing will be delivered by the unlocking of those stalled sites than would be delivered without our reforms. The new powers will be used when negotiation is not already under way, and, as the House knows, it has the opportunity to send a clear message to all parties to get round the table and start negotiating now. We can all have pie-in-the-sky targets, but the hard truth is that the houses will not be built unless the sums add up. The reforms will complement our affordable housing programme, which will lever in £20 billion of housing investment over the spending review period.
I will now give way to the hon. Member for Easington (Grahame M. Morris).
Grahame M. Morris
I am grateful to the Secretary of State. He is very kind. Does he accept the view of David Orr, the chief executive of the National Housing Federation, who says that the abolition of the section 106 agreements is likely to cost us 35,000 affordable houses each and every year?
Mr Pickles
Only in the fantasy housing figures. The truth is that 41% of local authorities have already started these negotiations. That is one of the reasons why we have seen the number of houses start to increase. Eighty per cent. of authorities are willing to negotiate. Some lack the skills and experience to do so. We are willing to help there, but the truth is that, if we have a 50% target and nothing is built, 50% of nothing is nothing. The idea is to move things on. We have found in the negotiations that, rather than have a 30% target, many authorities have dropped to 26%. Many have managed a little higher than that, but they have shown flexibility to get the whole process moving.
Simon Hughes
Of course none of us wants stalled sites and there are many of them, but will the Secretary of State be helpful, as his Ministers have indicated, and ensure that we have a much more transparent check on what developers say is economically viable? Our experience on the south bank is that they say certain things are not economically viable. They then build the housing and flog it off at higher prices that were not revealed at the beginning.
Mr Pickles
Of course this is not going to be done on the basis of a developer’s word—developers will have to demonstrate clearly to an inspector that the current targets are uneconomic. I believe that we will get more social houses built because of this measure and I believe that we will have more affordable houses. We have put additional sums in, as my right hon. Friend will recall, and fairly soon the schemes will be going out to tender.
Mr John Redwood
I think that this is the best bit in the Bill. It is so obvious that we have to allow the developers and the council to decide what is affordable and realistic. It may be that in some cases all we can get built is houses for sale. What is wrong with that?
Mr Pickles
There is absolutely nothing wrong with that, but I am afraid that a strange municipal machismo has grown up—if one authority managed 40%, another would say, “Well we managed to negotiate 50%.” It is wholly unrealistic.
Mr Pickles
That is absolutely right. That goes to the heart of what we are doing. We are pleased to be introducing healthy competition.
Sir Paul Beresford (Mole Valley) (Con)
Does my right hon. Friend accept, from his experience of local government, my experience and that of the Minister, that one of the concerns many of us may have is that for a planning authority and a planning committee to understand what is economically viable will be difficult? There may be a slight flaw and a problem there.
Mr Pickles
I think that is precisely how we got into this problem. That is why we are looking to developers and local authorities to work together in open negotiation and, to use the words of the hon. Member for Warrington North (Helen Jones), to be much more competition and market-oriented. We want to get a degree of realism into the process.
Bob Blackman
Does my right hon. Friend agree that it is not just the targets on the percentage of affordable housing and the mix of dwellings, including flats, that are important? The targets on design, density and everything else that goes with it are crippling the market right now. Those decisions were taken years ago, when the housing boom was at its height.
Mr Pickles
My hon. Friend makes a reasonable point. I want to make it clear that we do not want to go back to the bad old days when we were doing swaps. I think we should be building real communities, which means that there should be a mixture of market houses and social houses. That is the way real communities live together. To get that mix right and to get social housing moving, we need, again in the words of the hon. Member for Warrington North, greater competition and a much more market-oriented approach.
Our approach is working. Official figures show that more affordable housing is being provided under the coalition Government than under Labour. On average, a third more affordable housing has been built every year than during Labour's last decade.
Local authorities have an important role in promoting development and shaping where it should go.
Mr Pickles
I say I will give way for the final time more often than Frank Sinatra said he would be performing for the last time. Therefore, I want to make it clear that, until I have moved off the planning stuff, I will not take any more interventions.
The Bill will make it easier for councils to choose, if they wish, to dispose of surplus land held for planning purposes, thus helping get more brownfield land back into productive use. Councils will also be given more local discretion over when they review the planning conditions for mineral sites, rather than following rigid, centrally-set targets.
The Localism Act 2011 has also given councils more control over local plans to determine where development does, and does not, take place. Some 65% of planning authorities have now published an up-to-date local plan. That is great progress, but the planning system needs to be fair and responsive to applicants and local residents. Alongside tackling the small number of councils whose performance on planning is exceptionally poor, we want to deal with those councils that insist on demanding large amounts of unnecessary paperwork to support planning applications. The Bill will therefore ensure that information requests from councils are genuinely related to planning and proportionate to the scale and nature of the development proposed. The reams of documents demanded have now got out of control. They do not make the planning system more accessible; they achieve quite the reverse. So this practical reform will save everyone time and money.
Planning includes a quasi-judicial process which, of course, puts fairness at its very centre, yet in some cases it is taking far too long for that process to be concluded. Justice delayed is justice denied. Unreasonable delays are unfair to both applicants and local residents because of the uncertainty delays create. The Bill will therefore help speed up planning decisions where councils have a poor record in deciding applications. This will be a help to localised planning, as it will make the worst councils up their game.
The planning system is at times Kafkaesque, with applicants having to wait months, sometimes years, for different pieces of consent from different people. Our proposed change squares with localism. In a quasi-judicial system, there should be minimum standards of due process. That principle is no different from that for the intervention powers that address rare cases of public service failure such as on best value, care homes or education. In the longer term, however, our goal is that no council should find itself in a position where these powers need to be used.
The Bill also contains a series of measures to help local companies grow. We want to help companies introduce a new employment status that gives employees a stake in the company. Employee-owners will benefit from shares in the company worth between £2,000 and £50,000, as well as a different set of UK employment rights than for normal employees. This is particularly aimed at fast-growing small companies and enterprises that will benefit from a flexible work force. We are currently consulting to ensure that appropriate safeguards are in place so people fully understand the consequences of this new type of contract. Only the enemies of aspiration would oppose this modern embrace of co-operative values.
The Bill also provides for tax stability in the business rates system. Business rates are the third biggest outgoing for local firms after rent and staff, but an unpredictable business rate revaluation would be costly to British firms, so this Bill reschedules revaluation to 2017. This will give businesses five years of tax stability and certainty, leaving companies looking to grow and improve the economy free to concentrate on delivering growth. This revaluation comes off the back of Labour’s unsustainable property boom. Rents have been falling, but at any revaluation that would be offset by a soaring multiplier.
There is a popular misconception that postponing the revaluation means delaying falling rate bills. That is not the case. The postponement will be revenue-neutral. It is most important to stop a game of Russian roulette with municipal finances. Initial Valuation Office Agency estimates suggest that the revaluation would see up to 800,000 firms paying more in business rates, with only 300,000 paying less. The decision will avoid local firms and local shops facing unexpected hikes in their business rate bills over the next five years. Places that would be particularly hard hit are small shops, petrol stations and public houses. We cannot know with complete certainty without spending £43 million on a revaluation, but there is a significant risk of the revaluation going very wrong and harming growth. Small and medium-sized firms will be the hardest hit if we do not take action. Without action, there will be massive volatility, which, in itself, could close down businesses and, at the very least, discourage business investment. This reform will provide certainty for business to plan and invest, supporting local economic growth. So these measures complement the local retention of business rates, go hand in hand with the Localism Act’s reforms to small business rate relief and build on the abolition of Labour’s “ports tax”, which threatened to sink Britain’s export trade because of a botched, unfair revaluation.
Andrew Gwynne (Denton and Reddish) (Lab)
I share the Secretary of State’s desire to try to use this mechanism to boost our high streets. However, I get a bit lost by his argument, because many small shops in a town centre such as Denton had their business rates set on the basis of their rents before the recession and would benefit from a revaluation on the basis of the current lower rents.
Mr Pickles
The hon. Gentleman should not be mocked for not understanding this, because the misconception is a common one. If London values went down enormously, we would have to adjust the multiplier to ensure that the same amount of money was in the system as whole. Initial estimates of the multiplier suggest that a massive increase would be required, so those very places that have seen a drop in rents—a drop in rateable values—could find themselves paying much more through this process. That is the very nature of it. He may recall that when a revaluation took place last time the values had gone up so high that there had to be a small reduction in the multiplier to compensate. Our feeling is that the multiplier would be likely to have to go up considerably, which is why we have taken the unusual decision of trying to do the revaluation against a more stable position.
Kate Green (Stretford and Urmston) (Lab)
None the less, businesses in my constituency have expressed dismay at this announcement. What analysis has the Secretary of State, or his Department, carried out on the geographically distributional spread of the impact of this measure?
Mr Pickles
We cannot definitively model geographical spread. All we can do is rely on our officials’ best professional judgment and initial reports—I stress that they are initial—from the Valuation Office Agency. Big changes are likely to be seen, even within an area. We can see what has happened in the City. We recognise that banks and a lot of financial institutions are likely to see a colossal drop in their rates bill, but compensating that will be enormous increases in other parts of London to pay for it. So the hon. Lady’s constituents should not feel aggrieved. They should feel that we have taken a sensible decision, and we hope that we can get broad consensus on it.
The measures I have outlined today will help Britain compete in a global world. They will support local firms, local jobs, local housing and local regeneration. They will remove the unnecessary red tape that holds our country back and they will ensure that sustainable development goes hand in hand with environmental safeguards and democratic checks and balances We are speeding up the system, cutting excessive regulation and giving employers a helping hand to compete on the global stage.
We are being true to the aspirations that brought the coalition Government together. We are taking the bold action needed to fight for Britain’s future and ensure that we succeed in a changed and uncertain world. We are promoting economic growth, rebalancing our economy, backing the industries of the future and allowing Britain to compete in a modern, 21st-century world economy. I commend the Bill to the House.
Hilary Benn (Leeds Central) (Lab)
That was a valiant attempt by the Secretary of State to try to pretend that the centralisation of power at the heart of the Bill is nothing more than a bit of his muscular localism. The truth is that the whole House knows where the Bill comes from. It is the product of the Government’s panic over growth during a summer in which Nos. 10 and 11 Downing street thrashed around, trying desperately first to find people to blame and then to find things to do about the state of the economy and the longest double-dip recession since the second world war.
It is the Secretary of State who has been told to try to explain what on earth the Bill is for, and it certainly cannot be described as a growth Bill. First, it will not help to get the economy back on track. For example, he mentioned housing. Members should remember that construction output is estimated to have declined by 2.5% in the three months until September—there is a sector in trouble—and if the Government wanted to boost growth and tackle the housing crisis, the Secretary of State could have adopted our proposal to use the proceeds of the 4G auction to build 100,000 new affordable homes. He could also have repeated the bankers’ bonus tax to build 25,000 affordable homes. What would those two measures do? They would take people off the waiting list and unemployed building workers off the dole queue. The Bill does not do that.
Secondly, in a survey in the summer when the construction industry was asked—and it ought to know—what the main deterrent to investment in infrastructure was, what did 60% of the respondents say?
Hilary Benn
No, they said it was the lack of clarity from the UK Government.
Thirdly, the reason we have been one of only two G20 countries in a double-dip recession is not the planning system but the Government’s failed economic policies. The Secretary of State is in a very uncomfortable position today as his whole argument, which is that the Bill will give us growth, has been undercut by the Prime Minister. Let me remind the House of what the Prime Minister said in the summer:
“If you could legislate your way to growth, obviously we would. The truth is you can’t.”
That is what the Prime Minister said.
Robert Neill (Bromley and Chislehurst) (Con)
Against that background, will the right hon. Gentleman explain why under the Government of whom he was a member the UK fell from fourth to 89th in the global rankings for the burden of Government regulation? How would he put that right if he were in our place?
Hilary Benn
I do not know which survey the hon. Gentleman means, but as he knows, we did a great deal.
Robert Neill
I mean the World Economic Forum’s global competitiveness report—those reports run from 1997 through to 2012-13. I can show it to him if he would like to see it.
Hilary Benn
As the hon. Gentleman has a wee bit more time on his hands these days, I would very gladly read a copy of that report. He knows that the previous Government did a number of things to boost the economy and economic development, and he must acknowledge that when the coalition Government took over, the economy was growing. The Chancellor’s spectacular achievement has been to put that growth into reverse.
This is a flawed and incoherent Bill that shows why the Prime Minister was right to say that it is not possible to legislate for growth. It is no wonder that Sir Merrick Cockell, the Conservative leader of the LGA, described it as a missed opportunity. The only thing that will grow as a result of the Bill will be the power of the Secretary of State, who is mentioned 144 times in just 45 pages—that is going some.
Now, why is that? The truth that the right hon. Gentleman would not utter is that the Bill marks the death of his commitment to localism—the localism that he used to proclaim with such passion and sincerity. It is actually a Bill that says, “You know what? You can’t trust local people to take the right decisions, so we’ll take the decisions.” It was noticeable that clause 1 was the bit of the Bill that he was most reluctant to talk about. It is extraordinary. Ministers have tried to dress it up today—the Under-Secretary of State for Communities and Local Government, the hon. Member for Grantham and Stamford (Nick Boles), who has responsibility for planning, did so when he appeared before the Communities and Local Government Committee—as a minor change that will be used sparingly in a few authorities, apparently, he said, for a maximum of one year. But the Bill says none of those things. Nowhere does it say that. The Government are making this up as they go along. What the Bill does say is that the right hon. Gentleman would take for himself the power to decide on planning applications and cut local communities right out of the process for as long as he likes.
Angela Smith (Penistone and Stocksbridge) (Lab)
Is it not noticeable that the Secretary of State refused to give way to answer the key question: how would he define what a failing local authority is in planning terms?
Hilary Benn
If my hon. Friend bears with me a moment, I shall come presently to precisely that point. The first question that the House must ask the Government is that if they are to propose such a fundamental change to the way in which planning decisions have been taken since 1947—that is about 60 years of local decision making—the Secretary of State must have had really strong evidence on why such a change is needed, so where is the evidence? I will make this very easy for him, and I will happily give way. Can he name one example of a so-called failing planning authority? Will he name an authority now?
Mr Pickles
As the right hon. Gentleman knows and, more particularly, as other Opposition Members know, I have been more than helpful to those Members who have had trouble with planning authorities and I have done my best to move things along, but I am very happy to name the worst, which is Hackney.[Official Report, 6 November 2012, Vol. 552, c. 5-6MC.]
Hilary Benn
That is extremely interesting. If the Secretary of State can name what is in his view a failing planning authority, he must know the criteria for judging a failing planning authority, yet the criteria are nowhere in the Bill; he is allowed to make them up as he goes along. Officials watching this will be thinking, “Oh, my goodness, he shouldn’t have done that,” because he has just fettered his discretion and the consultation that he will probably have to undertake in deciding which are failing planning authorities.
Mr Pickles
I also made it absolutely clear that, of course, we are working with the LGA and local authorities to define this, and we are prepared to consult on it. But the right hon. Gentleman asks what the worst planning authority is, and I have named it. Whether that will be regarded as a failing authority will be a matter of consultation.
Alison Seabeck (Plymouth, Moor View) (Lab)
Will my right hon. Friend give way?
Hilary Benn
Perhaps my hon. Friend will just bear with me for a second, as I am very interested further in the Secretary of State’s answer because he has not defined the worst. I have here before me a list of the slowest decision makers on all applications and the slowest decision makers on major applications. The top three—or the bottom three, depending on our interpretation, in those two categories are Stratford-upon-Avon, Stafford and Warwick for all applications, and for major applications Torbay, Kensington and Chelsea, and North Norfolk.
Government Members really ought to see where their authorities are in the league table that the Secretary of State is in the process of making up as he goes along. They may well find that, unless we remove clause 1, planning decisions will be taken not by locally elected councillors—that is my definition of localism—but by the Planning Inspectorate. The truth is that if he knows the criteria he should make them clear now. Clause 1 will in effect give the Secretary of State the ability to nationalise planning decisions in respect of as many authorities as he likes. It will completely change the basis on which planning applications have been traditionally considered by local communities. That is the very opposite of the localism that he used to speak about, because decisions will be taken not by councillors but by the Planning Inspectorate on behalf of the Secretary of State. There will be a strong reaction when the first local authorities discover that the power to decide has been taken away from them by the Secretary of State under the Bill.
Mrs Anne Main (St Albans) (Con)
The right hon. Gentleman needs to go back a little in history and look at the imposed housing targets that local authorities were expected to deliver. This scaremongering—that the Secretary of State, in a micro-managing sort of way, will look at every planning authority and decide the plans himself—is frankly ridiculous. I sincerely hope that the right hon. Gentleman gets back to the real nub of the argument, which is that the coalition Government are trying to get away from imposing things on local people and are letting them choose how they want their areas to develop.
Hilary Benn
I say to the hon. Lady that it is not ridiculous; it is what clause 1 says. If she has not read the clause, I suggest that she does so carefully. On housing targets, the truth is that under the new arrangements the figures that local authorities will have to come up with for housing numbers in their area will not be very different from the figures produced by the regional spatial strategy, because there is still the same housing need. That is certainly the case for the authority in Leeds, because I have spoken to the chief planning officer about that.
The truth is that if hon. Members read the Bill, they will see that the Secretary of State will decide which authorities will lose the right to decide applications for themselves, he will decide what kinds of applications will come to him for decision, and he alone will take the decision in the place of local councillors. Of course, there will be no right of appeal—something the Bill also states.
I want to turn, as my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) invited me to a moment ago, to the grounds on which the Secretary of State may designate authorities. Clearly, he has made up his mind; he is just not telling us how he has done it. The clause gives him the power to do that anywhere, on any basis, for as many authorities as he likes, and there will be no check or balance from anybody else.
As for the criteria, when the Minister with responsibility for planning appeared before the Select Committee he said that speed and poor quality measured by decisions overturned by the Planning Inspectorate would be the factors that Ministers would take into account. On speed, I am genuinely puzzled. First, councils currently decide 82% of applications within eight weeks and 93% within 13 weeks. Those are the facts. The percentage of applications approved reached a 10-year high in 2011-12. Secondly, developers can already appeal to the Planning Inspectorate on grounds of non-determination in the required time under section 78(2) of the Town and Country Planning Act 1990. What does the Bill add to that power? Thirdly, there is a practical problem, as the planning Minister had to admit. He said that there was a wrinkle in the statistics. The data on timeliness do not take account of planning performance agreements. As hon. Members will know, that is where developers and councils jointly reach agreement to say, “Hey, this development could take a bit more time to approve. Can we agree, in effect, to set aside the time limits?” Instead of there being a simple measure, the Secretary of State will have to decide whether he thinks the reason given by an authority, when decisions are apparently slow, is good enough to justify his not taking the power away from them.
Bill Esterson
In an intervention a few minutes ago, the Secretary of State said that he would be working with the Local Government Association. Of course, the LGA has said that the barriers to growth are nothing to do with the planning system. Does my right hon. Friend intend to come on to that point—I am sure he does—and comment on the fact that it is the lack of funding that is the problem, not the planning system?
Hilary Benn
I certainly will come on to that point, but those conversations with the LGA will be jolly interesting. The Secretary of State is apparently going to say, “Can we sit down and talk about the criteria? By the way, whatever they are, they have to include Hackney, because I have just told the House of Commons that Hackney is the worst of the lot.” He has fettered his own discretion and will regret that answer.
The argument that this proposal is like the regime for failing schools falls at the first hurdle. We can judge whether a failing school is improving, because it will still be treating the children, but if we take responsibility for planning applications away from local councils and decide them centrally, we will have no way of knowing whether the planning authority is improving because it will not be taking any decisions. That is nonsense. And as for quality, I say to the Secretary of State and the Minister with responsibility for planning that there can be no real measure of it, because it is a matter of opinion and local democratic accountability, which is why we have had local decision making on planning applications for 60 years.
Robert Neill
Where was the local democratic accountability in the regional spatial strategies?
Hilary Benn
I accept the hon. Gentleman’s argument. The regional spatial strategies meant that local authorities had a responsibility to build houses. He has to acknowledge, however, that the regime before us, which I recognise he played an important part in setting up, will produce exactly the same numbers. That is because the same number of people will need to be housed and there will be the same increase in population. They are two different ways of doing it. However, it is the Secretary of State who has made great play of localism but who is now turning it on its head.
If the Secretary of State is thinking of using as his proxy the speed and percentage of planning applications overturned, people should, as I have indicated, go away very quickly and see where their local authorities are in the league table. To add insult to injury, however—this is pretty bad—he is taking the power to require local authorities to do all the work in connection with applications, even though they will not be taking the decisions and even though the Planning Inspectorate will be paid the fees. That is what he is doing in the Bill.
These are the same planning officers in whom the Secretary of State, in effect, had no confidence to start with—that is why he chose to designate authorities. It is therefore crystal clear what the clause is about: it is about his saying, in respect of councils whose decisions he does not like or which he thinks are being too tardy, that it is the elected council members whom he does not trust. That makes the purpose of the clause plain. He is saying, “I want this power because I think I’m in a better place to take decisions than the local communities themselves.” That is why the clause is so objectionable.
Mr Betts
My right hon. Friend makes a good case against the Secretary of State taking from local authorities the power to determine planning applications. He has also pointed out that the applicant will lose the right to appeal. When this matter came before the Select Committee, the Minister with responsibility for planning accepted in effect that the consultation arrangements for local communities would not have to be the same as if the local authority was taking the decisions, but that the statutorily required level of consultation would apply, which could be somewhat less. Local communities could suffer in that way as well.
Hilary Benn
My hon. Friend, who chairs the Select Committee so ably, is absolutely right. That is another example of how local communities will lose out as a result of this change.
I am genuinely surprised that the Secretary of State has turned out like this, especially given what he said in his speech to the Conservative party conference last month. He explained, in a purple passage, why, alongside the bust of Disraeli and the poster of Winston Churchill, he had a photograph on his wall of Che Guevara smoking a large Havana cigar. He told the delegates:
“It is there to remind me that without constant vigilance, the cigar-chomping Commies will take over. Well, that isn’t going to happen on my watch.”
Well, it has happened—with this Bill. There are a couple of words for what he is doing. It is a concept much loved by communist parties the world over. It is called democratic centralism—telling other people what to think and do. The powers he is asking the House to give him in clause 1 are, frankly, enough to make any self-respecting democratic centralist slap him on the back in gratitude and give him a cigar to chomp on. In no time at all, he has gone from claiming to be the friend of localism to taking a hammer and sickle to local democratic decision making. He fools nobody by trying to describe it as muscular localism. The really puzzling question is whether this is a genuine conversion. The House must ask itself whether the Secretary of State decided of his own volition to dump everything that he previously believed in. I doubt it; I suspect that the truth is rather different.
I think the truth is that the Secretary of State lost control of planning policy during the summer. He told us just a few months ago, “Here’s my shiny new national planning policy framework. It’s fit for a new century”, and he must have been bewildered to read those unattributed briefings suddenly appearing in the newspapers—the criticisms of his shiny new planning system from the Prime Minister and the Chancellor of the Exchequer, and I bet he was particularly irritated by the summonses to attend urgent meetings at 10 Downing street. Whoever was in charge of planning policy over the summer, I do not think it was the Secretary of State.
Charlie Elphicke (Dover) (Con)
Does the right hon. Gentleman count it a success that the previous Government had a planning policy which ran to 1,300 pages? Does he not think it is a success that the policy these days is much simpler and accessible to all?
Hilary Benn
I made it very clear, I think in my first speech after taking on my new responsibilities last autumn, that everybody is in favour of sensible rationalisation. I have never opposed that, but the Government have to get it right, and the Bill self-evidently does not get it right. I suspect that the Secretary of State’s heart is not really in these changes; maybe the planning Minister’s heart is. I do not know whether the Under-Secretary of State for Communities and Local Government, the hon. Member for Grantham and Stamford, smokes cigars, but a photo of him smoking one ought to go on the Secretary of State’s wall behind him as a reminder of what can happen if he lets down his guard.
Mr Raynsford
I have been following my right hon. Friend’s remarks with considerable interest. Does he think it significant that the ministerial team surrounding the Minister is entirely different from the one that sat with him in the early period, when he was formulating the national planning policy framework? Might that also be an indication of what has happened in Government?
Hilary Benn
That is an extremely interesting suggestion by my right hon. Friend, and only those on the Government Front Bench can say whether that is the case or not.
Clauses 2 and 3, which I do not think the Secretary of State mentioned, would allow the planning inspectorate to award costs. What is the purpose of this? Perhaps the Minister could say when he winds up. How can he assure us that it will not turn into a tax on local democratic decision making? Why should the Planning Inspectorate want to impose costs of its own volition, when developers can already ask it to do so under the law as it currently stands?
Mr Andy Slaughter (Hammersmith) (Lab)
Does my right hon. Friend agree that the purpose of clause 2 is possibly similar to that of clause 1, which is to blackmail local authorities into giving in to the worst property developers, and that this is a belated compliment to the Conservative Property Forum, which has given £4 million to the Conservative party over the past few years?
Hilary Benn
I can only say to my hon. Friend that I do not know whether there is any connection between the two things, but it is quite an interesting pair of clauses. What are they for? Why do Ministers apparently want to make it easier for the Planning Inspectorate to fine councils for the decisions that they have made?
Clause 5 proposes significantly to weaken the contribution that section 106 agreements make to the much needed provision of affordable housing. If section 106 really was the cause of stalled housing developments, why does the clause focus only on the affordable housing requirements, rather than other section 106 requirements—for example, contributing to transport, other infrastructure or new schools? I ask because, as my hon. Friend the Member for Easington (Grahame M. Morris) pointed out, the National Housing Federation tells us that 35,000 affordable homes are provided each year because of section 106 agreements, yet the Secretary of State failed to make the case that the lack of house building is because of the affordable housing element.
Where is the evidence? This will be a familiar theme in this debate. We are told that there are 1,200 sites and 75,000 homes that are stalled. Apparently the figure comes from something called the Glenigan database. When I asked the planning Minister if he would publish it so that we could see for ourselves the information on which the statement is based, he refused to do so. So we cannot see—[Hon. Members: “Why?”] Apparently it was something to do with commercial confidentiality, but are we as Members of the House not entitled to see the evidence base on which the policy is allegedly founded?
Perhaps that is why, when the planning Minister was sensibly asked by the Select Committee how many of these sites were stalled because of section 106 requirements, he came over all vague.
He said:
“It is very difficult to say. It is quite hard to say why nothing is happening.”
Let us look at what others have to say about section 106. The chief executive of the Homes and Communities Agency stated in a letter to my hon. Friend the Member for Sheffield South East (Mr Betts), who chairs the Committee:
“We are not aware of any current issues relating to section 106 agreement on the very small number due to start on site this financial year.”
What about the National Housing Federation? It has stated: “No evidence has been provided to suggest that planning obligations are routinely stalling development.”
What about the Council of Mortgage Lenders? It has stated:
“We are not convinced that section 106 obligations are necessarily the key sticking point”.
Well, if it is difficult to quantify and really hard to say why nothing is happening, and if the HCA does not think it is a problem, the National Housing Federation does not think it is a problem and the Council of Mortgage Lenders, which ought to know, does not think it is a problem, what is the purpose of clause 5? Everyone knows what the real problem is: people cannot get mortgages or raise deposits, so developers are not building houses because they do not think that they will be able to sell them if they do.
The Government admit that clause 5 will reduce the number of affordable homes built, which is why they have come up with an extra 300 million quid. If that really is the cause of the problem, I do not for the life of me understand why the Government do not just approach the developers on the 1,200 sites and offer them money to get them moving and bring forward the affordable housing numbers that were previously agreed. To reduce the number of affordable homes through the Bill and then come up with £300 million to try to replace the lost homes in an alternative way seems to me to be an extraordinarily roundabout way of addressing the problem. The truth is that everyone wants to get stalled sites moving. As the Secretary of State has acknowledged, to be fair, many local authorities have demonstrated that they are perfectly willing to enter into negotiations with developers in order to vary the conditions relating to affordable housing because they, too, want to get the homes built, and Leeds is one example of that.
The other thing that is puzzling about clause 5 is this: what will it give developers that they do not already have? I hope that the Minister will answer this when he responds. Under the existing arrangements, could not a developer who wants to change the affordable housing requirements on an existing permission simply put in a new application with the lower figure and then, if it is turned down by the council, go to the Planning Inspectorate on appeal and cite the new provisions on viability set out in paragraph 173 of the national planning policy framework?
What is the problem that this clause is trying to solve, and will it work? I doubt it. This is my last point on section 106 agreements. For a measure that is supposed to speed up movement on stalled sites, it might result, as the Royal Town Planning Institute has pointed out, in the very opposite. A developer that hopes to reduce the affordable housing obligation will now have a clear incentive to wait for the Bill to reach the statute book rather than entering into negotiations with the local authority—in other words, delay.
Mr Redwood
Does the shadow Secretary of State agree that, given the weakness of the banks and the problems in the credit markets, section 106 deals will be far less generous than they were prior to the boom going bust?
Hilary Benn
Of course, and the fact that local authorities have been willing to renegotiate the section 106 affordable housing requirements is proof of that—[Interruption.] Well, lots of them have done so, and no doubt the planning Minister will tell us about those that have not.
Mark Pawsey (Rugby) (Con)
Why does the right hon. Gentleman think so many local authorities have been unwilling to renegotiate section 106 agreements up to now? Will the Bill not encourage them to do so?
Hilary Benn
The hon. Gentleman says “so many”, but the Government have not given us the evidence. The whole Bill is based on supposition, what was whispered in someone’s ear, what was in the newspapers and what the Prime Minister fulminated against. We are legislating, and we should do so on the basis of evidence. I look forward to seeing that evidence.
The third leg of the Secretary of State’s assault on local democracy is clause 21. It, too, gives him wide powers to take planning applications away from local communities. It significantly extends the lists set out in the Planning Act 2008 by including business and commercial projects, as we have heard. We have seen the lists the planning Minister gave the Select Committee, but can he or the Secretary of State clarify whether that would include major retail or leisure developments? I will happily take in intervention. Any takers? No? It is interesting that we have not received an answer.
Do the Government intend to develop national policy statements for the new categories? The Secretary of State floundered when my right hon. Friend the Member for Wentworth and Dearne (John Healey) asked that question earlier.
What is this change for? The press notice issued by the Department on 6 September states:
“Thousands of big commercial and residential applications to be directed to a major infrastructure fast track”.
It only took about a month for that policy to change—another example of the Government making it up as they go along—because residential applications appeared to be pulled from it, as clause 21 now makes clear. Instead, the Government seem to have decided to make greater use of their call-in powers, as the planning Minister set out in his statement last week, but that will have the same effect—Ministers, not local people, will decide what happens in their community.
The Bill Committee will no doubt explore the extent to which the Government intend to use that call-in power to deal with applications for residential developments. If they call them in, Government and Opposition Members will suddenly find that, as a result of the change in policy, their local councils are not taking the decisions. Given that call-in powers have existed for a very long time, will the Minister who responds to the debate explain what the clause gives Ministers that they do not have already under existing planning law? How will the Planning Inspectorate cope with the additional work load? It is a mess.
Charlie Elphicke
My reading of the clause is that it is directed at projects of a national significance, particularly in the field of energy, which will cut through the problems with getting power stations built. That is important. The lights are likely to go out in 2015, because the previous Government were asleep at the wheel on power station developments, which are needed to keep our lights on.
Hilary Benn
I say gently to the hon. Gentleman that we made changes to the system and that one of the groups that we brought into the new national set-up was, indeed, energy. The Government’s provision does not change how decisions are taken—it adds big commercial applications. We await an answer on whether that will include leisure and retail. The hon. Gentleman needs to consider that carefully.
A number of other clauses give rise to concern and will be scrutinised carefully in Committee. Clause 7 seems to propose to scrap the special protection enjoyed by our national parks and areas of outstanding natural beauty, and to allow telecoms companies to install cabinets and masts wherever they want. First, the Secretary of State told us earlier not to worry and that that applies only to broadband, but could he please point to where in clause 7 it says that that is the case? It does not.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
Does my right hon. Friend see the irony, as many Opposition Members do, in the fact that the Government, after a great hue and cry over wind farms last week, are now intent on dismantling the very special place of our national parks in British culture?
Hilary Benn
My hon. Friend is absolutely right, and that is why those who care passionately about the national parks are so concerned about the clause.
Secondly, the Secretary of State said that the clause would make no change to the power of planning authorities to object. I draw his attention, however, to the Department for Culture, Media and Sport press notice of 7 September, which says that the Government will legislate to do a number of things, one of which is to ensure that
“broadband street cabinets can be installed in any location other than a SSSI”—
in other words, in national parks and areas of outstanding natural beauty—
“without the need for prior approval from the local council”.
The notice then goes on to say, in paragraph 5(c), that
“overhead broadband lines can be installed in any area without the need for planning or other permission”.
No wonder there is great confusion and concern about this clause, because it is not clear what the Government’s policy really is. Section 109 of the Communications Act 2003 refers to the use of “electronic communications apparatus”, not “broadband boxes and cabinets”. I listened carefully to the Secretary of State, and he did not give one single example—again, there was no evidence—of the problem specifically in relation to national parks and areas of outstanding natural beauty. As he should know, the national parks want broadband to be rolled out, but they want it to be done in the right way. I can give him lots of examples of national parks authorities that are taking precisely this approach, but here is just one: in the past five years, North York Moors national parks authority has approved 94% of planning applications and notifications for telecoms equipment. Where is the problem and where is the evidence? In the light of this, I can entirely see why the English National Park Authorities Association and the Campaign for National Parks want the clause removed. The current protection to which the Secretary of State must have regard—conserving the beauty of our national parks and AONBs—cannot be allowed to be undermined by the Government’s desire to look as though they are doing something about growth.
The Secretary of State used to boast that he was protecting village greens, but his proposals will make it much more difficult for people to register them. For instance, there is the positively Kafkaesque proposal that the moment a planning application is published, someone can no longer seek to register a green. Since the first that most people will hear of an application is when it is published, this seems to be a pretty clever way of stopping people exercising their rights, unless they happen to be mind readers. In a very small number of cases there is a problem—that is why we published the consultation paper when we were in government—but this is a heavy-handed, disproportionate and clumsy measure, and we will table amendments in Committee to create a more balanced way forward.
Damian Collins (Folkestone and Hythe) (Con)
Does the right hon. Gentleman recognise, as many of us do, that the provision for registering village green status is routinely used by people who are serial campaigners against any type of development in their area and causes huge delay and cost in the planning system?
Hilary Benn
Having looked at this when I was Secretary of State, I recognise that there are some such cases, but there are also lots of others where the provision in the Commons Act 2006 is used quite properly to protect in perpetuity the public’s use of green space—village greens and so on—which they have had the right to enjoy for many years. Like lots of things, it is about getting the balance right, and this clause, as formulated, has not got it right; that is certainly the view of the Open Spaces Society.
I listened very carefully to what the Secretary of State said about delaying business rates revaluation. We all want to support measures that will help businesses at a difficult time, but we will want to scrutinise this in Committee to understand the balance of the argument. It would be extremely helpful—I put this to him in all sincerity—to see his and the Department’s assessment of who would gain and who would not, because a lot of businesses are saying that an earlier revaluation would help them. It would also be of assistance if he could set out the impact of a change on the finances of local authorities now that the Local Government Finance Act 2012 is on the statute book.
Mr Pickles
The right hon. Gentleman makes a very reasonable point. Of course we will publish an impact assessment and the calculations of the Valuation Office Agency on Report.
Hilary Benn
That is extremely helpful, and we look forward to seeing those documents.
Amid all the centralisation, there are some clauses that seem sensible and that we will support—the Secretary of State smiles—such as those on the energy industry, on removing the anomaly on disposal of land for less than best consideration, on the review of minerals permissions, and on allowing the process for stopping up or diverting highways and public paths to run alongside the planning process— which is perfectly sensible recommendation of the Penfold review. Overall, however, the bad in the Bill far outweighs the good.
That brings me to clause 23, which is an absolutely astonishing proposal. Labour Members are in favour of businesses giving shares to employees and think it a jolly good thing. We do not, however, need the Bill for that because companies are already perfectly free to give shares to their workers. The clause does something completely different, and, for the first time that I can recall, employers will be allowed to buy their way out of legislation that protects their workers. The legislation is explicit and there is a tariff—[Interruption.] I hear the cry of “voluntary”, and we shall come on to whether that is the case.
The fact is that for between £2,000 and £50,000, a company can pay to strip its workers of their rights. That is what the clause does. Never mind cash for questions; this is cash for repeal. What on earth is the connection between giving an employee shares, and taking away their fundamental rights in the workplace? Given the wording of the clause, some might say that such a change could happen only if the company and the individual agreed on it. That, however, is true only for existing employees at the time the legislation comes into force. Their choice will be quite simple: take the cash and lose the rights, or lose the cash and keep the rights. Many of them will ask, “How lucky do I feel today and when I think about the future of the company?”
The Government have made it crystal clear that in future employers will not have to get an agreement and will be able to offer only contracts involving shares. It means that the only way someone will be able to get a job with that company is if they give up their rights—[Interruption.] The Under-Secretary, the hon. Member for Grantham and Stamford, shouts from a sedentary position that it is a choice, but one feature of this Bill seems to be that those who are sponsoring it have not actually read it.
A Treasury background note published at the same time as the Bill states that
“new start-ups can choose to offer only this new type of contract for new hires.”
The English is a bit dodgy, but I think it refers to new workers whom a company is taking on—[Interruption.] The Under-Secretary says it is a choice, but—
Madam Deputy Speaker (Dawn Primarolo)
Order. It is unhelpful in a debate to have Ministers shouting from the Front Bench, and then for their question to be answered when the rest of us are not exactly clear about what is going on. If you wish to make a point, Minister, you should step up to the Dispatch Box; otherwise, I hope that the right hon. Member for Leeds Central (Hilary Benn) will concentrate on his speech and ignore the heckling.
Hilary Benn
I was trying to encourage the Under-Secretary to provide clarity to the House, Madam Deputy Speaker, but I take your strictures.
If someone wants to take a job but finds that it is offered only on the basis that they give up their employment rights, that is not a choice. If that is all an employer offers to someone who is unemployed and wants to do the right thing and contribute to the economy, that is no choice whatsoever. As for shares, what if the company is not listed on the stock exchange? Who will assess the value of those shares? They could be worthless. Who will buy them? Will they carry voting rights? The Secretary of State said nothing about any those points this afternoon, and the House must ask why holding shares should mean that someone loses the right to protection against unfair dismissal. What is the argument for that?
Huw Irranca-Davies (Ogmore) (Lab)
I wonder whether my right hon. Friend can help me to understand this despicable proposal and explain where in the Nuttall report it is stated that someone has to sacrifice their employment rights and protections in order to extend share ownership? I have read that report in detail and cannot find it anywhere.
Hilary Benn
My hon. Friend is absolutely right; the Bill has nothing to do with that report at all and is about something else entirely. Why should holding shares mean that someone has to give up their right to redundancy payment? What is the argument for that? Why should they give up their right to apply to undertake study or training?
The Government rightly remind us how important it is to have the right skills for the future. Without a hint of irony, however, the background note published at the same time as the Bill tries to claim that this measure is particularly aimed at small and medium-sized companies
“that benefit from a flexible workforce”.
In clause 23 we find that one right workers will lose is the right to request flexible working. You could not make it up, Madam Deputy Speaker, except that that is exactly what the Government are doing.
The director general of the CBI described, in very polite terms, this provision as a “niche idea”—a pretty underwhelming endorsement. The clause will, however, be a lawyers’ paradise, because one of the consequences of it—if it passes into law—is that dismissed employees who find themselves in the position of being employee owners will try to shoehorn their unfair dismissal claims into the rights that are still left to them. That is exactly what will happen—the clause will not even work in the way the Government intend.
One might think that the Employee Ownership Association would sing the praises of the Bill, but, of the clause, it has stated:
“There is no need to dilute the rights of workers in order to grow employee ownership”.
The clause is Beecroft by the back door, and Labour Members oppose it. When the Minister winds up the debate, will he give me a very simple assurance on process? The Government are currently consulting on the employer-owner idea. Will he therefore promise the House that they will make any amendments to the clause either in Committee or in remaining stages in the Commons?
In conclusion, the Bill is not a growth Bill. It will not get the economy moving and will not build infrastructure. It is a “must be seen to be doing something” Bill. The tragedy is that the only thing it does is take power from local people and locally elected councillors and give it to developers and the Secretary of State. Today marks the halfway point of this Parliament, and all we have to mark the occasion is a shoddy, clumsily cobbled together, half-baked Bill. That really shows, and I urge the House to reject it.
Madam Deputy Speaker (Dawn Primarolo)
Order. I remind Members that there is a 12-minute time limit on Back-Bench contributions to this debate, starting from now.
Nick Herbert (Arundel and South Downs) (Con)
I welcome the Secretary of State’s aims for the Bill—boosting infrastructure, cutting red tape and helping local firms to grow are laudable ambitions. I should like to focus on four aspects of the Bill: first, the balance between localism and centralism; secondly, the importance of securing proper infrastructure, both national and local, to support development; thirdly, the importance of the Government’s broadband programme, including in national parks; and fourthly, the overall role of the planning system against the background of wanting to promote growth.
First, on localism, clause 1 allows, as has been noted, direct applications to the Secretary of State if a council is placed in what could be described as special measures. The criteria for so placing a council have yet to be set out. However, I hope we remember all the reasons why, over the course of the past two and a half years, the Government felt it was important to devolve power to people and communities, not least in housing and housing policy.
Devolving power in planning decisions is also important, because there is a great danger that people will feel that decisions may be taken away from them. If decisions are taken away from local communities, the danger is that responsibility is also taken away—the responsibility of community leaders to take decisions that are sometimes difficult. Another danger is the paradox of the top-down housing targets of the previous Government. The very high stated housing numbers that were never achieved did not deliver, but merely set up conflicts between local communities and the Government.
Mrs Main
Not only did the previous Government create conflict within communities, they skewed how communities developed. Developers moved into my constituency to deliver the targets—particularly density targets—and we ended up with heaps of flats, which were bought speculatively, but not enough of the family homes that the communities wanted. I therefore welcome this Government’s approach. We can actually start to determine what we would like to be built rather than be told what to build.
Nick Herbert
My hon. Friend expresses eloquently one virtue of ensuring that decisions can be taken on a local basis.
The power of the Government’s changes to the planning system, which were set out in the Localism Act 2011, is this: they introduced the idea of neighbourhood planning, with communities judging for themselves where best to site housing and what is necessary for their areas. Neighbourhood planning is an incredibly good concept. I would like to see it flourish, but it is in danger of being undermined by a series of things. I hope that the Government will look again at the neighbourhood planning process and how it might be boosted, because it is the right way to provide sustainable levels of housing provision.
First, the concept has been undermined by the continuation of regional spatial strategies. I know that there has been a problem with the European Union holding up the effective abolition of the strategies, which has been legislated for by this House. However, while they remain in place—for instance, the south-east plan affects my constituency—the danger is that, in the absence of effective local plans, the countryside can be vulnerable to speculative housing applications, with communities powerless to oppose such applications, which, if rejected by local authorities, can be appealed to the Planning Inspectorate. The consequence of such applications is that the process whereby communities come together over planning in the neighbourhood is undermined, with local consent—which can be built for reasonable levels of housing—undermined too. The swift abolition of the regional spatial strategies is therefore essential if the process of neighbourhood planning is to proceed.
Second is the issue of expense. The Government provide some support to local communities to proceed with neighbourhood planning, but it is an expensive process. More support—not necessarily financial—has to be provided to local communities. That issue is not addressed in the Bill; it usefully could be. Such support is essential also from district councils. Some councils are unwilling to yield power. Localism is not a process whereby power is simply handed down to elected district councils; where possible, power should be placed in the hands of the people and communities. That is being undermined by some district councils that do not wish to support the process of neighbourhood planning.
Thirdly—this issue has already been raised in the debate—there is the question of whether the overall housing numbers set by the regional spatial strategies will simply be reinstated if the assessment of housing need undertaken by district councils comes up with the same number. We need to take a close look at the instructions being given to district councils as they assess housing need. Otherwise, the very principle that we set out in the Localism Act 2011—that regional spatial strategies should go and that powers should be handed down to local communities—will, in effect, be undermined. If the Planning Inspectorate ends up taking decisions that should have been taken locally and imposes the same numbers as those proposed previously, nothing will be gained and localism will be undermined.
It is worth restating the virtue of the neighbourhood process. It means that communities will plan responsibly, with local democratic buy-in to the housing levels arrived at, because there will have to be a referendum. I know from my area that where parish councils are setting up local plans, they are—perhaps for the first time—looking carefully and responsibly at where a sustainable level of housing provision could be sited. The sustainable provision we wish to see in future years will be threatened if we slip back into a top-down approach, which is clearly the risk in clause 1.
Martin Horwood (Cheltenham) (LD)
I commend the right hon. Gentleman on the points he is making. Does he agree that one of the problems is the difference between housing need and housing demand, which in some areas is virtually insatiable, and that it was important for the national planning policy framework that local councils should be given the power to balance economic growth with social and environmental requirements, even though this has not yet been taken very seriously by many local planners?
Nick Herbert
My hon. Friend puts his finger precisely on the right point. If that balance were not achieved properly, it would be possible to come up with huge projected levels of housing in the areas I represent, because there is an almost infinite demand for housing from people wishing to come and live in West Sussex. Unless that balance is achieved, there will not be a sustainable level of housing provision in the local area.
The Bill rightly focuses on the need to secure national infrastructure, and on the importance of speeding up decisions so that that can be achieved. I strongly support that, but I want to talk about the related issue of the levels of local infrastructure necessary to support housing development. I represent a rural constituency with no large towns; it has only villages, small towns and countryside—and important countryside, at that. It already has problems with congested roads and, in some villages, of over-subscribed local schools, although I am pleased to say that the latter issue is partly being addressed by the Government’s policy of allowing free schools to be set up.
Worst of all, however, is the problem of sewage. The levels of development in some villages have not been matched by adequate sewerage provision. When combined with the lack of an adequate water supply in the area, that can result in sewage flowing though people’s gardens after not particularly heavy rainfall. There is inadequate local infrastructure to support the present level of housing provision in those villages. What are we going to do to ensure that proper levels of infrastructure are put in place to support the necessary additional development?
There is a general acceptance in the communities I represent that additional housing is needed. There is a lack of affordable housing in the villages, and people recognise that some additional housing will be necessary. The question is whether it will be provided on a sustainable basis with proper provision for the infrastructure necessary to support it. I want to ensure that the provisions in the Bill will continue to allow funding for such infrastructure provision, so that the appropriate level of development can go ahead.
A further issue relating to infrastructure is that of broadband. West Sussex is a rural county that is relatively close to London—my constituency is only 50 miles away—and it is surprising that it should contain three of the four “not-spot” areas in the country, in which broadband can barely be obtained at all. One of them is in my constituency, where broadband provision is already very poor. I therefore strongly welcome the Government’s measures to secure a reasonable level of broadband speed and 100% coverage across the country, followed by a high level of provision of superfast broadband. Such provision will be essential if we wish to foster local economic growth and the levels of infrastructure provision that businesses require in today’s connected world.
Such broadband provision is no less important in national parks. The outstanding landscape of the South Downs national park is in my constituency, and the communities in the park will also require high-speed broadband. Farmers who wish to diversify, for example, do not want to be disadvantaged, and the local economy will not be sustainable unless such broadband provision is secured. Last year, I raised the issue of a local farmer who was paying huge sums of money for broadband provision, which was creating an impediment to the successful diversification of his farm enterprise. I therefore welcome the proposals to improve broadband provision.
I am concerned about the provision in clause 7 that will override the key purpose of a national park to conserve beauty, and I would like to hear more from the Government about that. I need to understand more about the practical effects of that provision, and about the precedent that it will set. I need to be persuaded that it will not damage the landscape, which it is so important to preserve, although I of course see the importance of securing improved broadband provision.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
I support my right hon. Friend’s remarks. My constituency contains areas of outstanding natural beauty, and the provision could be interpreted as undermining the protections that are at present afforded to his and my constituencies. Will he join me in asking the Government to look at the measure carefully, to ensure that it does not set a precedent for other projects?
Nick Herbert
I am grateful for my right hon. Friend’s remarks. She expressed herself in the same way as I have sought to express myself—by seeking reassurance that these provisions will not damage the landscape. The whole purpose of these high landscape designations, whether they be areas of outstanding natural beauty or national parks, is that they ensure a level of protection that cannot be overridden. That is their very purpose, so we need to be careful before legislating for any provision that might then set a precedent for further erosion of such protection in future. I simply say that we need to be careful and that I need to be persuaded of the benefits of these measures.
My final point is about the role of the planning system in relation to growth. There is a simple fact here—that we have had high levels of growth with the existing planning system in this country under Governments of both persuasions over the course of the last few decades. The planning system is not in itself necessarily an impediment to growth, and the lack of growth cannot be laid at the door of the planning system. Nevertheless, in an increasingly competitive world—despite the fact that we can observe Britain’s projected growth as being higher than that of our European partners and approaching that of the United States—we need to compete with the best. That means that any blockage on the speed of planning decisions needs to be removed. I welcome Lord Heseltine’s review to that effect. He said that it was not about undermining the principles of the planning system; it was about ensuring that it works more speedily. That is what I suggest we need to focus on—policy clarity and speeding up decisions, not undermining the process in its entirety.
Joan Walley (Stoke-on-Trent North) (Lab)
I welcome the contribution of the right hon. Member for Arundel and South Downs (Nick Herbert). Unlike in the opening speech from the Secretary of State, the right hon. Gentleman has, I suspect, reflected the genuine concerns of many Government Members about whether the safeguards are sufficient and whether the importance of sustainable development is recognised, as it barely features in the Bill. I very much hope that we will have an opportunity to look at some of the issues raised.
If anyone ever wanted a master class in how to oppose what a Government are doing, they need only look at the contribution of the shadow Secretary of State, my right hon. Friend the Member for Leeds Central (Hilary Benn), as he provided exactly that. He absolutely made mincemeat of the hot air we heard from the Secretary of State, and we saw what this Bill is really about.
I rise to speak to the inquiry into “Sustainable development in the national planning policy framework” and draw the House’s attention to the recent Environmental Audit Committee inquiry, which is available to the House this evening. In that report, we examined the extent to which the national planning policy framework reflects sustainable development principles. On the strength of the evidence we received, we collaborated with the Select Committee on Communities and Local Government—I see in his place my hon. Friend the Member for Sheffield South East (Mr Betts), who I know is going to make an important contribution later—to press the Government, in producing their revised version of the NPPF, to ensure that there is no potential for confusion about the equal importance of all three aspects of sustainable development. It is clear from the interventions so far that this is at the top of Members’ priorities. Sustainable development is not just about the economy; it is about social and environmental considerations, too.
While we recognised the rights of local councils to determine what constitutes sustainable development in their area, we concluded that they need a national planning policy framework that does not push them to regard economic dimensions as predominant. We thus called for a clear definition of sustainable development. Perhaps naively, when the initial flawed proposals were superseded by a much more acceptable NPPF, we welcomed it. Uppermost in our minds—this stemmed from the relevance of the Brundtland report, the further benefits of the 2005 sustainable development strategy of planning policy statement 1 and was in light of preparations for the Rio+20 conference that was taking place at the time—was the need to accept the primacy of environmental limits. Indeed, what we wanted was to see local councils include in their local plans a requirement for some types of development to include environmental gain.
Additionally, and perhaps not surprisingly, as ours is a cross-cutting Committee—a concept which I believe is increasingly no longer cherished, understood or aspired to by the Government—we wanted the final version of the NPPF to be signed off not just by the Department for Communities and Local Government, but by Ministers in other key Departments. They would include the Department for Environment, Food and Rural Affairs, the Department for Transport—we heard just now about the importance of local transport structures—the Department for Business, Innovation and Skills, the Department of Energy and Climate Change, the Cabinet Office and the Department for Culture, Media and Sport. Above all, in view of its strategic significance, they would include the Treasury.
Our other key reports, most notably the one on the green economy, reach the same conclusion. We continue to urge the Government to back green growth, rather than locking us into short-term fixes with no regard for future long-term costs and environmental degradation, which is what the Bill will do. After barely six months, we have seen a complete turn-around on the Government’s part. This is a truly irresponsible Bill, which I think reveals the Government in their true colours. Members who sat through the presentation that we have just heard have every right to be concerned. The Bill shows the Government abandoning any claim to be the greenest Government ever, and it undermines their position on the world stage, where the Prime Minister and the Deputy Prime Minister seek to take forward the principles of the sustainable development goals at the United Nations negotiations.
Damian Collins
I welcome the placing of growth at the heart of legislation such as this. One of my criticisms of the proposals for the sites of the new nuclear power stations that were drawn up by the last Government was that the process involved no consideration of the local economic benefit of building a new power station. In the case of Dungeness in my constituency, that was much to the detriment of the consideration of the benefits of that site.
Joan Walley
The point is well made. Investment in power should be for the benefit of the whole community; the aim should not be for the profits to go into the hands of a very few people.
The Government cannot lead by example abroad if they cannot back up their principles with deeds at home. I believe that the Bill condemns a whole generation of people who desperately need jobs and hope for their own future now to a waste land without jobs and homes, and no say whatsoever in local affairs. So much for localism. This way lies a real threat to our parliamentary participatory democracy.
We have a U-turn on localism, a set of incoherent proposals for the financing of investment in new homes, and an NPPF which, in the light of the Bill, we shall be hard-pressed to find fit for purpose. We have a Secretary of State for Communities and Local Government—I am sorry to see that he is no longer present to listen to the argument—who is taking responsibility for the ability of his friends the developers to get their own way, and a fast track to development and the profits that come from that, without any of the responsibilities for the people, the places, the footpaths, the heritage and the environmental protections which his Department ostensibly promotes. That is a very flawed definition of localism.
I assume that Parliament will vote for the Bill tonight. Incredibly, just as we forgo all rights to planning safeguards and local democracy, it seems that the Secretary of State has not already taken enough of the cake. He is just not satisfied. As we heard from my right hon. Friend the Member for Leeds Central, the shadow Secretary of State, he is venturing to trump employment rights in the workplace as well. I feel very strongly about that. We need only read the notes issued by his Department to realise how justified he feels it is to prevent people from going to employment tribunals by the back door. He is dressing it up as employee ownership, but in all but a very few cases it will be a smokescreen for depriving people of rights at work. The Government ought at least to be transparent about that.
Let us look at what the Government are doing. They are introducing drastic measures to kick-start a building programme, or so they tell us. As we have heard, it is necessary to look no further than the Local Government Association to see that the Government have got it wrong. We have been told already that
“Approval is in place for 400,000 new homes and councils are green-lighting planning applications at the fastest rate in a decade. The big problem is that developers can’t borrow to build and first-time buyers can’t get mortgages. Taking planning decisions away from local communities and placing them in the hands of an unelected quango isn’t going to fix that.”
That was a quote from Sir Merrick Cockell. The Government should be listening to find out how to address these issues.
I have many concerns about the lack of activity in construction, but the Bill will not deal with them. I am also concerned about the Climate Change Act 2008. As well as centralising the system and undermining local government, the Bill will fail to tackle climate change. I hope that there will be an opportunity in Committee to see whether duties can be placed on the Secretary of State when national policy statements are drawn up to consider climate change, whether section 19 of the Planning and Compulsory Purchase Act 2004, which deals with the duty on climate change and local plans, can be strengthened to link to the Climate Change Act, and whether an obligation can be created with regard to the survey of plans so that carbon issues are considered. Those are all issues that need to be addressed constructively in Committee and in the other House.
Mention has been made of the concerns of local authorities, as if they were not strapped for cash enough with all that is happening under the comprehensive spending review. How on earth will they be able to carry out their responsibilities? I fear that the Bill paints a picture of a local community where there are few affordable homes. We have seen already how people in London will be forced out of the capital to cheaper homes elsewhere. There is no joined-up consideration by the Government of where we need the social housing.
I believe that the Bill will create a situation in which commons and village greens become something to resist rather than to celebrate, where the community is busy trying to develop ideas for a balanced community through a neighbourhood plan but where those who want to develop in the area can go straight to central Government, and where it may be easier to reduce or block people’s access to the countryside by changes to procedures on rights of way. I have sat through many debates about rights of way, footpaths and stopping up orders and how to get people to keep their local footpaths. This Bill could take all that away.
Our Committee had real misgivings about the NPPF at the time. We did what we could to change it for the better. Now that it is in place, what is needed is stability to allow local authorities time to get their local plans in place and to develop procedures to co-ordinate with one another under the NPPF “duty to operate” on higher-than-local issues, which were previously dealt with in regional spatial strategies. On that, we need look no further than the fact that the DCLG, when it got rid of those strategies, also got rid of the environmental appraisals that were required. There is no joined-up approach to all this. Instead the goalposts are being moved again. The NPPF was sold on the importance of local decision making in planning matters, but the Bill takes control and influence away from local authorities and centralises planning decisions. I believe that it is just plain wrong.
John Howell (Henley) (Con)
I want to take us back to the Planning Act 2008. There was a sense that it had an element of a fast-track system in it, but it is instructive to learn that business leaders believe that it has had no effect. We moved on and introduced the Localism Act 2011 and the national planning policy framework to lay the foundation for an improved planning system. These aim to deliver a simpler, faster, less bureaucratic system that is also infinitely fairer. It cannot be right that only those in the know knew what it was they should know. It is right that the system broadened that out so that we can all have a share in the planning system.
The first phase is complete. The Localism Act 2011 is through, and the nation is now busy planning. The national planning policy framework is through, too, and it has laid the foundations for a simpler and quicker system. However, as the Secretary of State has said, there is still much more to do. What is going to happen to the remaining 6,000 pages of guidance, which the committee chaired by the Under-Secretary, my hon. Friend the Member for Grantham and Stamford (Nick Boles), is tackling, and how are we going to speed up the system? We must also encourage councils to deliver.
The planning system has failed to deliver the infrastructure that the UK requires. I am not alone in saying that: some 97% of business leaders questioned in a CBI and PricewaterhouseCoopers survey said that the planning system had failed to deliver, and 76% regarded the planning regime as a significant barrier to infrastructure development.
Tristram Hunt
The hon. Gentleman is setting out an interesting narrative. Is he seriously suggesting this Bill was planned before the summer recess?
John Howell
Yes, I am suggesting that parts of this Bill were planned before the recess. Its proposed changes are a natural result of the changes we introduced through the Localism Act and the national planning policy framework, and if the hon. Gentleman looks more carefully, he will see the links between the bits that came before and the bits that are coming now.
The Local Government Association stance that planning is not the problem is fundamentally misleading. It is based on an analysis—I use that term loosely—of 400,000 planning permissions that have been granted, but we are not told whether they are viable or even where they are. We are asked to believe that 400,000 houses have been given planning permissions and are ready to go today as if nothing stood in the way.
Grahame M. Morris
Does the hon. Gentleman accept that the two points he has raised are not material planning considerations?
John Howell
I accept that they may not be planning considerations, but they are certainly considerations in whether to move a development forward. The issue is that the planning permissions have been given but the houses have not been developed.
The problem lies not in the planning permissions that have been given, but in those that have not been given. The cost of producing rural planning applications is higher than the cost of those in other areas, and the Country Land and Business Association states that in many cases local planning authority staff clearly hope that the applicant, if faced with enough demands for expensive reports and surveys, will withdraw the application. In practice, that frequently does lead to withdrawal, especially in respect of minor developments: for instance, a proposal costing £5,000 to implement is unlikely to justify information costing £5,000 to produce. Indeed, prospective applicants often simply do not submit a proposal in the first place, which means that desirable rural economic development does not go ahead. This tends to bring the planning system into disrepute. It is therefore right for the planning system to be accused of holding up development.
The Bill is also accused of being centralising, rather than localist. This ignores the fact that the changes are meant to be part of a double devolution. The first was a devolution down to district and borough councils’ local planning authorities. The second was a devolution down to local people, so that they could put together their own neighbourhood plans. Devolution to local people is working better than devolution to councils. At the recent neighbourhood planning seminar in Thame in my constituency, which is one of the neighbourhood planning frontrunners, I was as surprised as anyone when a little old lady said, “Isn’t planning such fun?” I hope that that feeling is occurring all around the country, as people begin to get their hands dirty in doing the planning necessary to make these neighbourhood plans successful.
John Howell
No, I will not.
Devolution to councils is being held up, either because they are incapable of dealing with it or because they are not performing well—neither is acceptable and I would expect this to be dealt with as it has been in the Bill. It is time for our councils to deliver. This approach is all part of encouraging councils, but there can be no doubt that our historical under-supply of homes, over some 20 years at least, is the result of a planning system that is not fit for purpose. That was the conclusion of the Barker review of housing supply in 2004. The Killian Pretty review in 2008 found that only five out of 64 planning applications went ahead without difficulties, with the rest often having substantial problems that either delayed them or changed the nature of the development. According to the National Audit Office, planning laws create the highest regulatory costs of any type of regulation. The Opposition have thus totally missed the point of localism, which was the double devolution down to local communities which are engaging in the production of their own local plans; they are empowered to do so and they are seizing those opportunities fully with both hands to make the best of them.
Clause 4 deals with the information requirements. There is a sense that the clause is unnecessary because other more general powers are available to ask for the right amount of information when looking at an application, but that is utter nonsense. Information requirements are now pretty wide. We have all sat through planning committees where the information requested has been wide of the mark and, in particular, has borne no relation to what might be a material consideration. I am grateful that the Bill has included information that will be a “material consideration” in the terms of the information that will be collected.
Mr Slaughter
I am slightly confused as to whether the hon. Gentleman is the same MP for Henley who said in support of a third-party right of appeal:
“We will make the system symmetrical by allowing appeals against local planning decisions from local residents, as well as from developers”.
Does he see any contrast between that view and what is in the Bill?
John Howell
I am not sure I see the relevance of the quote, but it was overtaken by time, by the way in which the Localism Act was put together and by the way in which that would have been an absurdity in how neighbourhood planning was put together. It is no use the hon. Gentleman looking up old quotes from four years ago and expecting them to somehow blow me off course, because he has not taken account of history on the way.
Let me turn now to the subject of village greens, as we have all seen how that status has been abused. In Oxfordshire, although not in my constituency, village green status has been pursued for an area that largely consists of an old gravel pit that is now a lake. It is absurd to continue in this way, particularly when legislation has given communities the ability to designate green open spaces that mean something to them. We do not require them to be the most beautiful grounds in the parish or to have special environmental significance; their significance lies in their importance to the local community. That element of the Localism Act 2011 and the national planning policy framework is sufficient.
John Howell
I will not, because I do not have much time.
The clauses that deal with section 106 agreements do not, as David Orr suggested, abolish section 106. They offer an opportunity to renegotiate section 106 agreements undertaken at the height of the boom when things were going well, and it is quite right that they should do so. It is important to recognise that when development cannot go ahead no affordable housing will be built, so renegotiating section 106 to ensure economic viability will mean that more such homes can be built. In other words, if we do not do this, we will get no section 106 affordable homes as opposed to some.
For those reasons, I think that the Bill attacks the issues correctly and in a balanced manner. It continues many of the reforms we introduced in the Localism Act and national planning policy framework and it does so in a way that I am happy to support.
Mrs Mary Glindon (North Tyneside) (Lab)
It is a pleasure to follow the hon. Member for Henley (John Howell), although he will find that I do not agree with his views on the Bill.
I have to agree with the Local Government Association that the Bill represents a blow to democracy and is at odds with the Government’s localism programme. As a former councillor and planning committee member, I fully appreciate the importance of the links between community decision making and planning. As democratically elected and accountable representatives, councillors are in the main fully aware of residents’ needs, concerns and aspirations in making decisions about how their area should be developed for economic and social benefit. Any legislation that would foster that accountability would be welcome, but in the months since the then Planning Minister, the right hon. Member for Tunbridge Wells (Greg Clark), promised in March that the national planning policy framework would support growth and allow
“people and communities back into planning”,
quite the opposite has happened.
Instead of offering local accountability, the Bill hands decision making to the unelected Planning Inspectorate and hands increased powers to the Secretary of State that turn localism firmly on its head. In Battle Hill ward in North Tyneside, a ward in which I live and which I represented as a councillor, a planning application for 66 houses on a former school playing field was rejected by the planning committee at the beginning of March. To my mind, the planning committee’s decision was quite right.
The developers have appealed, and the council has now been advised that the appeal will be heard under the new rules and that objections made at the time will no longer be relevant. I wonder what the Minister thinks of that, as many of the objections were made by local people and related to the safety of a school access road becoming a general access road and the fact that some designated open space was being lost. Where is the accountability in that?
Alison Seabeck
I am listening carefully to my hon. Friend’s local experience and paralleling it with the experience of the hon. Member for Henley (John Howell), who said that an elderly lady said that planning was fun. Planning will hardly be fun if decision making is taken from local people, as in my hon. Friend’s case, and handed straight to the Secretary of State.
Mrs Glindon
I agree with my hon. Friend, and for the people of Battle Hill this will be not a fun experience at all but a very serious one that will keep their concerns going. That is exactly what the Secretary of State is doing with planning matters in the Bill, and it is why there is such great concern about his proposals.
Local councils, on average, determine householder planning appeals in fewer than eight weeks and non-householder appeals in fewer than 13 weeks. Currently, the averages for such determinations by the Planning Inspectorate are seven weeks and 17 weeks respectively. If the Planning Inspectorate is given additional responsibilities, as set out in the Bill, to take over the designation of failing councils and in setting the viability of affordable housing requirements, that could lead to further delays and worse decisions.
Moreover, by stripping a designated failing council—whatever that might be—of its powers, the Bill will enable developers to have their applications decided by the Secretary of State, without being reviewed by the local authority and with no right of appeal against the Secretary of State’s decision. No wonder the Local Government Association has misgivings about the Bill. There is nothing in it to say what criteria will be used to define a failing council, as has been said a number of times today. The LGA would, quite rightly, rather central Government gave support to councils that might have performance issues ahead of any intervention. I fully support the LGA in its premise that it makes more sense adequately to fund locally accountable decision making than to fund a quango, such as the Planning Inspectorate, to make such decisions.
It is well documented that planning is not the problem for growth. What is actually needed is investment to build houses and infrastructure, and the Bill does not provide scope for real growth. It will weaken the ability of councils to negotiate with developers on desperately needed affordable housing within local developments under section 106 agreements, with, as my hon. Friend the Member for Easington (Grahame M. Morris) and the shadow Minister have said, an estimated loss of the building of 35,000 affordable homes a year—a statistic that does not bode well for the 4,500 people on the waiting list of North Tyneside council.
With the Bill, the Secretary of State is reneging on his promise to let councillors and communities run their own affairs. May I say as an aside, Madam Deputy Speaker, that that undemocratic attitude is rubbing off on one of his favourites? The elected mayor of North Tyneside, who now, having only 12 members on a council of 60, with 43 Labour members and four Liberal Democrats, has at great expense to the people of North Tyneside engaged counsel to put a new interpretation on the powers of elected mayors, so that she can ignore the two-thirds majority rule. So our mayor, like the Secretary of State, has become something like a dictator, taking decision making away from the majority of democratically elected members and, ultimately, the electorate.
There are many more problems with the Bill, but the fact that it will make the planning process far less democratic and will seriously threaten future housing and infrastructure development, with no real growth—except, as the shadow Minister said, in the Secretary of State’s powers—tells me and, I hope, the House that the Bill should not get our support.
Annette Brooke (Mid Dorset and North Poole) (LD)
My starting point is that I want to support and achieve growth in our economy and good-quality infrastructure, but I also want good-quality local planning decisions. I have reservations about certain aspects of the Bill, and I seek reassurance.
As the hon. Member for Stoke-on-Trent North (Joan Walley) reminded us, a great deal of time was spent on the Floor of the House and in various Committees debating the national policy planning framework, which has only recently been approved—in particular, the need for a definition of sustainability that encompassed environmental, economic and social factors. Personally, I was very pleased with the final wording and outcomes. I thought it was an example of good government: Government listening and making changes to the draft document as a consequence of consultation.
In our consideration of the Bill, we must not lose sight of the underlying principles that we have only just agreed. I am concerned that the Bill appears to propose a massive shift away from local decision making to a centralised approach. At the very least, there should be a clear evidence base for the proposals, as well as full scrutiny of their potential outcomes. In addition, the question should be asked: can we achieve the stated objectives in a better, more effective way that would be compatible with local decision making and local community involvement?
I would like to look at four of the areas in the Bill concerning planning, the first of which is the designation of a local planning authority, with the Planning Inspectorate making the decisions. It is interesting to note the cross-party Local Government Association view of this proposal as counter-productive, centralist and at odds with localism. That raises the question of whether planning is the problem, and I am not at all sure that I would follow entirely the analysis made by the hon. Member for Henley (John Howell).
Clause 1 provides the Secretary of State with a wide-ranging power to remove planning decisions from the local level, but it does not provide any detail of the criteria. What scale of intervention are we talking about? Are we talking about intervening on a handful of authorities, or dozens of authorities? That is highly significant. We are asked to think about speed and quality of decision making. Clearly, there is a lot of variation in council performance in meeting the time targets on both minor and major applications, but we need a starting point to look at the reasons, with the Department—perhaps it has done so already; I would be happy to learn of it—working with the local authority and asking: what is it that is holding up the authority’s decision making? What is it that means councils are missing the determination targets for eight weeks and 13 weeks?
I represent an area that includes some small district councils. Their planning departments have a heavy work load in relation to the number of officers employed. The question of whether that is a matter of the council reallocating its resources, or adequate resources being provided, needs to be addressed. All in all, it seems to be a massive decision to take planning decisions from a local authority, but I am not at all sure, from what I have heard, that it is as big as it sounds. It could just be sensible intervention: working with local authorities, establishing the facts, proceeding, and then, perhaps at the end of the line there may be a case for taking stronger action with one or two authorities. However, my reading suggests that the Bill could permit a massive intervention.
I am concerned about the potential scale of the changes to section 106 agreements. Section 106s have delivered affordable housing. We know that councils are already overwhelmingly responding to changed economic circumstances, including renegotiating section 106 agreements voluntarily, and they can do that within the context of their local plans. I am not clear on the evidence that it is the affordable housing element of section 106s which, on a very large scale, is holding up planning applications. If we had that evidence, it would be much easier to make a good decision. We need to identify and sort out the problems. A big worry about losing section 106 housing requirements is that there will be no general consideration of development plan policy, such as the need for homes at a range of prices in local communities. The National Housing Federation mentions the rural exception sites, for example, which are of course very dear to my heart.
The policy could be counter-productive, and I ask the Minister to address that concern. There is a risk of stronger local opposition to developer plans if the perception grows that new developments will be just for expensive new homes, or, as in my area, for more second homes, and that local people will end up with no affordable homes. Having an assurance that there would be homes for local young people would mean that the community could sign up to them, and that is important.
There could be further delays to housing, with developers waiting for the Bill to be implemented.
Annette Brooke
I would like to proceed.
Enforced renegotiation means that benefits from 106 agreements may be lost for ever, regardless of the needs and views of the local community. If renegotiation outcomes were in line with local planning policies, I cannot see why a local council would not renegotiate on a voluntary basis. Developers’ profits will rise, but how transparent and independent will the appraisals be of the viability of a development with and without the section 106 obligations? It is important to have mixed communities of housing. One of my favourite places that I visit is a large housing estate. As I knock on the doors, I do not know which house was built originally as social housing and which was built originally as private housing—that is what we must aspire to. My problem is that even if the developer finds that a development is not economically viable and we all agree with that in a transparent way, we would lose that social housing. Could the £300 million not be targeted to make sure that the local planning authority keeps the housing it needs?
Annette Brooke
I am indicating clearly that a large number of areas need to be scrutinised very carefully, and that it would be wrong for me not to raise my concerns.
I want to look at positive measures, too. For example, Eastleigh council has worked well to secure affordable housing, achieving the mixed developments to which we aspire. It has worked with developers to offer a guaranteed purchase model for developers that have sites with existing planning permission but which are unsure whether they could sell the houses and where, as a result, development has stalled. The council offered to act as a purchaser of last resort if the developers could not sell them. The developers then went ahead and built new homes, and so far the council has not had to buy any new stock, and will rent out any it does purchase at a discounted rate. There is a lot of scope for innovation, if we truly believe in localism and give those powers to local councils.
On the designation of town and village greens, I have examples of applications holding up development, but I do not have overriding evidence that it is the case. The evidence is anecdotal. That again is why we need to scrutinise the proposals carefully. Through neighbourhood plans backed up by the national planning policy framework, the local designation of green open spaces is a good way forward. We have to move from one system to the other, however, and I am concerned that the transition will not be a smooth one, because there remain cases in all our constituencies where we want open spaces protected but where, for example, the neighbourhood plan has not been worked up sufficiently. Some major groups are not satisfied with the explanations given so far, and we must come up with clear reassurances and a clear outline of the transition from one system to the other. Urban green spaces, as well as the long-established village greens, are very important, so we need these assurances. I ask Ministers to address that point tonight.
Finally, on electronic and communications infrastructure, there are fears that the proposals could cause serious damage to designated landscapes, including national parks and areas of outstanding natural beauty. As I know from my own constituency, where access in rural areas is lagging, the Government are right to prioritise broadband access in rural areas, but it must be possible to roll out superfast broadband in these areas and conserve beauty at the same time. Again, I am concerned about irreversible damage. We have to get this right.
We should also consider historic urban locations that could be damaged by inappropriately placed street cabinets, which, under the proposals, as I understand them, could be placed in any areas other than sites of special scientific interest. Throughout this, I am thinking of both urban and rural areas, because the same theme applies to both. Is there evidence that the proposals will deliver what the Government—and I—want? It is a difficult time. We have rightly scrapped regional spatial strategies, and we have introduced many excellent measures, but they need time to bed in. We need time to look at each case carefully, to consider the evidence and to look outside the box—for example, at lifting the cap on local authority borrowing in order to jump-start the housing market.
Stewart Hosie (Dundee East) (SNP)
This is the Growth and Infrastructure Bill, but it could more accurately be described as the English local government (planning change) (miscellaneous orders) Bill with some additional provision for energy, which is important, and, in clause 23, what the Government euphemistically call “economic measures” but which appear mainly to be another attack on employee rights. It certainly is not a Bill for growth in any way, shape or form. If the Secretary of State really wanted the factories, offices and infrastructure he spoke of in his introduction, instead of this mishmash of a Bill, the Chancellor would be reintroducing the industrial buildings allowance to provide a real incentive for the supply-side investment that will bring the necessary economic enlargement.
The Bill is a bit of a guddle. Paragraphs 11 to 23 in the explanatory notes describe those bits that are executively devolved, fully devolved and reserved, and those elements, mainly in clauses 17 and 18, that require a legislative consent motion from the Scottish Parliament. I shall speak about the reserved and devolved parts later. Given that much of the Bill relates to this matter, however, I want to start, unusually, by looking at the changes proposed to the English planning system, mainly to determine the Government’s thinking.
The Government are suggesting the option to make planning applications directly to the Secretary of State when the local planning authority is designated to be performing poorly. On the other hand, the Scottish Government are concentrating on improving planning authority and other stakeholder performance by linking fees to performance, and are committed to performance across the entire planning service. They have worked with local government agencies and the private sector to introduce a new planning performance framework that carries a firm commitment to continuous improvement.
The Scottish Government have also drawn a clear link between performance and planning fee levels. Authorities that do not improve will have their fees reduced, and the Scottish Government are pursuing the legislative powers to do that. They already have a system that allows the applicant to appeal on non-determination of a planning application. I ask the Minister, therefore, why the UK Government have chosen to allow applications to be made directly to the Secretary of State, rather than linking performance to the fees demanded by local authorities or LPAs, in order to improve poorly performing councils.
The Bill suggests broadening powers to award costs at planning appeals. The Scottish Government have not considered that change necessary in Scotland, and instead have concentrated on streamlining the appeals process in an effort to reduce costs. In 2009, they streamlined the appeals process even further precisely to prevent developments from becoming bogged down in lengthy and expensive inquiries. Why, then, have the Government chosen to broaden the powers to award costs, rather than to take different steps to streamline the appeals process, which is a sensible thing to do in any circumstances?
Under the Bill, the Government have also proposed limiting the power of LPAs to require supporting information for planning applications. In England, LPAs can specify the content of applications, but provisions in the Bill attempt to limit that. In Scotland, the Government specify the content of applications in national regulations. Under clause 4, the UK Government plan to go about this by amending the primary legislative framework governing what local authorities can ask for in support of a planning application so that such requests are reasonable and relate to matters likely to be material planning considerations.
The regulations in Scotland specify what accompanies an initial application and allow additional information to be requested when the planning authority considers it necessary to determine the application. That might well be in response to information required by statutory consultees. The emphasis on pre-application discussion between applicants, planning authorities and statutory consultees to identify information requirements in advance seems to make sense. Will the Minister explain, therefore, why the UK Government have chosen to amend primary legislation to limit information, rather than going down the route of national regulations, which would allow information to be required over and above a de minimis level, where it is necessary to determine an application?
The Bill also allows for the reconsideration of economically unviable section 106 affordable housing obligations, with the sensible objective of freeing up stalled housing sites. In Scotland, we have the power to modify or discharge section 75 planning obligations—the direct equivalent of section 106 agreements—whether or not they relate to affordable housing. Whether in England, Wales, Northern Ireland or Scotland, however, the problem with freeing up stalled affordable housing sites has little to do with the planning system, and far more to do with the unavailability to developers, including housing associations, of the lending required to start or complete sites. Would Government time not have been more constructively spent trying to free up cash from the banks and lenders to allow those developments to proceed? I believe, and I hope the Minister can confirm, that the Scottish Government already have the powers to modify or discharge planning obligations equivalent to those under section 106, and I hope he can confirm that nothing in the Bill would change that.
On the major infrastructure changes—non-planning changes—clauses 17 and 18 relate to the ability of the Secretary of State to vary consents for generating stations granted under section 36 of the Electricity Act 1989, and therefore to avoid the need for the full panoply of consent application requirements to apply for changes in a proposal. The existing consent power is executively devolved and the related power under planning legislation for Ministers to direct that planning permission is deemed to be granted for any development that receives consent under a section 36 order. That removes the need for separate planning application and was devolved in the Scotland Act 1998. It therefore makes sense that the Bill should include provision for Scotland, although because of its devolved nature, the provision clearly needs to be ratified by the Scottish Parliament.
Clause 15, however, repeals section 14 of the Energy Act 1976 which requires developers or operators to give written notice to the Secretary of State for proposals to establish or convert electricity generating stations to be fuelled by gas or by petrol. An initial look would suggest that this is a minor removal of red tape where a section 36 consent under the Electricity Act would be required in any event. I wonder whether the Secretary of State did not rather overstate the ripping-up of the red tape to which he referred in his opening remarks.
There is also the opportunity here to correct the anomaly in the Town and Country Planning (Scotland) Act 1997 where, when granting consent for offshore wind farms, Ministers cannot at the same time direct that planning permission for onshore ancillary development be granted. A joined-up approach to that makes sense but because, as I said, many of these things are executively or fully devolved, that will also require a legislative consent motion from Scotland.
There are only two economic measures in the Bill. One is clause 22 which postpones the next non-domestic rating revaluation from 2015 to 2017. The argument is that that provides certain businesses with increased certainty about their business rates bill and allows them to focus on running their businesses. At face value that is sensible, and I am sure that Scottish Ministers will take their own decision on the equivalent revaluation postponement or not in good time.
Clause 23 is the key to the Bill. It represents another erosion of employee rights. I am all in favour of employee share schemes. Such an incentive is good. Employees owning a part of the business that they work for makes sense. At no time ever have I thought that that should be purchased at the cost of the removal of the basic rights that everybody else takes for granted, and I am deeply concerned about that. Even the briefest look at the explanatory notes tells us that in return for this new employment status, employees will have to forgo certain unfair dismissal rights, meaning that in certain circumstances they can be dismissed in a way that would now be unfair. That seems utterly ridiculous.
Employees will forgo statutory redundancy pay, on the off-chance that the shares that they have been awarded may have some value—any value—or, indeed, any market at all for them. That raises a serious question. Should there not be an open market, do the Government intend that the business buy that stock back, which might put the employer in an invidious position at that point? In order to become an employee owner, certain rights to flexible working will be forgone. As we heard earlier, businesses—we all know them—want their employees on occasion to be able to work flexibly. This is an important drive forward, and the provision is a huge reversal of that trend.
Employees will also have to forgo certain rights to request study and training. The next time a Conservative or a Liberal bemoans skills shortages in a company, sector or geographic area, we should remind the governing parties that they are asking people, in return for being an employee owner, to give up the right to request study and training leave—precisely the opportunities that people need to get the skills that their employers require now and in the future.
Giving up the right to go back to work early after maternity or adoption leave is incredible. We all understand that businesses have costs when they put interns or temps in when someone is away on maternity or adoption leave. I have never had a single employer say to me, “I don’t want my employee who is off on maternity leave to come back earlier.” Normally employers are desperate to get back their experienced staff, so the idea that the ability to become an employee owner will mean having to forgo the ability even to request coming back early is ridiculous.
I hope the Minister can answer the technical questions that I posed. I look forward to hearing what he has to say.
Mr David Ruffley (Bury St Edmunds) (Con)
Rahm Emanuel, President Obama’s former chief of staff, said that one should never let a good crisis go to waste. He was right in the following respect: the economic crisis that this Government inherited in 2010 should allow us to be radical in our thinking, radical in our approach to economic growth policy, and radical in our approach to more and better infrastructure, for it is more and better infrastructure that will drive up productivity and total output.
It is two years since the Government announced the national infrastructure plan, and it is fair to say—I say this in a spirit of friendly candour—that it has not been progressed as rapidly and as efficiently as Ministers would have liked. In September this year the Public Accounts Committee looked at the regional growth fund. Of the £1.4 billion allocated, it found that only £470 million had been paid out; £364 million had been parked in intermediary bodies under an endowment programme. Only £60 million out of the £1.4 billion had found its way into front-line projects. It was calculated that that had bought 5,200 jobs. So a lot more remains to be done in driving through and delivering those projects.
There are signs that Ministers in this Government get it. I had the advantage of going to visit the new roads Minister, the Under-Secretary of State for Transport, my hon. Friend the Member for Wimbledon (Stephen Hammond), with my hon. Friend the Member for Waveney (Peter Aldous), who is in his place. When we indicated that the excellent proposal to toll the A14 around Cambridge was one that we wanted to see earlier rather than later, the Minister was able to assure us that he had knocked 12 months off the initial timetable for when concrete would be poured. He also helpfully indicated that that road toll project would not be a compulsory road toll on heavy goods vehicles, and there was a clear sense of urgency on the part of that Minister.
What about the Bill before us? To what extent will it speed up and make more efficient the delivery of the infrastructure that all of us, in all parts of the House, want to see? I agree with my right hon. Friend the Member for Arundel and South Downs (Nick Herbert), who is not in his place but who made an excellent speech, that we should not get carried away with the idea that more residential housing development will give us a permanent boost to long-term trend growth of the UK economy. If I may say so, we have heard too much in this debate about residential housing development. In my view, the reason that we have less of it is insufficient demand from buyers, insufficient capital being supplied to developers, and the state of their balance sheets. It would therefore be a mistake to bet the farm, so to speak, on housing development getting the UK economy going.
My hon. Friend the Member for Henley (John Howell) offered an explanation for the backlog of planning consents of around 400,000 for residential and other developments and said why that is not really as bad as it sounds. In my part of East Anglia, no developers have been beating a path to my door to say that we are not building enough homes because of a lousy council or a sclerotic planning regime. Furthermore, I understand from the Local Government Association that the approval rate for residential and commercial planning applications is now at a decade high; 87% were approved in 2011-12.
I must say that I am not a doctrinaire localist and, therefore, do not view some of the clauses in the Bill with as much trepidation as some of my colleagues on the Opposition Benches. I am more concerned about legislation that works and gets the planning system moving. Therefore, on clause 1, I will say only that, although the Secretary of State is taking quite wide powers, it is ridiculous to suggest that they will be unfettered, because subsection (8) makes it perfectly clear, in paragraphs (a) to (d), that guidance will be published setting out what constitutes a poorly performing authority. That is set out in the Bill and will come in time, so I do not think that we should get too excited about it.
However, those wide powers should be concerned with designating local planning authorities that are failing because they are tardy and inefficient in disposing of business. I would not want to see—I am sure Members on both sides of the House agree—a planning authority put into special measures simply because it had not built enough houses in a particular area, according to the lights of the Minister involved. I would find that pretty offensive, and it would certainly not be to the liking of my constituents.
I declare an interest, as I represent one of the United Kingdom’s great and iconic market towns, Bury St Edmunds. There has been a cross-party petition to keep that jewel in the crown of the east of England special. We already have a local planning agreement from the Conservative-led St Edmundsbury borough council, planning for a smaller number of residential homes in the next 20 years than was insisted upon by the previous Administration’s regional strategy. We have been able to use local council power to come up with a compromise that satisfies local housing demand. The last thing I want to see is any ministerial power being used to overturn the decisions of councils simply because they do not appear, in the Minister’s view, to have approved enough residential homes.
Clause 21 has already been mentioned. I am very relaxed about it. If we want to get the big infrastructure projects moving, whether energy reactors, rail electrification or increased aviation capacity, it seems to me to be perfectly legitimate and proper to give Ministers the power to fast-track those kinds of major national projects in the interests of efficiency, given the economic problems we face and the fact that we need to give nationally significant infrastructure projects a shot in the arm.
That brings me to a big national infrastructure project that we have not heard much, if anything, about today: the vexed issue of creating more aviation capacity. I think that it is now viewed as a mistake that my party’s 2010 manifesto ruled out making any decision on a third runway at Heathrow in this Parliament. I think that the noble Lord Heseltine was absolutely correct to say—I summarise colloquially—“Get a move on. Let’s make a decision sooner rather than later.” I also agree with the Mayor of London that we should not just go headlong towards building aviation capacity for the sake of it but should weigh up having a third runway at Heathrow with other options, as some colleagues, such as my hon. Friend the Member for Richmond Park (Zac Goldsmith), have suggested, such as extending Stansted or Gatwick or maybe even having a new airport in the Thames estuary. But we need to get on with it. It seems to me that any discussion of growth and infrastructure in this Chamber demands a grown-up, civilized, intelligent and well-informed debate about how aviation capacity can not only boost short-term growth, but improve long-term trends in GDP growth.
I want to say something about a type of infrastructure that is very dear to the hearts of those of us who are worried about broadband apartheid. I mean the parts of apparently affluent rural Britain—parts of which are in my constituency—where there are concerns that they will be left behind not only on superfast broadband, but on any kind of fibre-optic access at all. There seem to be clauses in the Bill that would allow fast-tracking, whether through compulsory purchase orders, the purchase of land or planning applications, so that we could get those fibre-optic channels dug out. I was lobbied on that question by Battisford parish council only a couple of Fridays ago. There is new housing there and small rural businesses, but they cannot possibly grow and thrive if they are at the tail end of any broadband roll-out. Therefore, to the extent that it will facilitate faster broadband roll-out, I welcome the Bill.
I broadly welcome the Bill, but I also have reservations about the future and about delivery. I am glad to see my right hon. Friend the Member for Sevenoaks (Michael Fallon) on the Front Bench. He is, not only as the Tory Minister for growth, but as a man with a track record in the private sector and, in a former incarnation, as an Education Minister, a man who gets on with delivery. I hope that when he winds up the debate tonight he will give us an indication of the Government’s renewed sense of purpose in boosting economic growth and infrastructure in this country.
Mr Clive Betts (Sheffield South East) (Lab)
It is no surprise that we are talking today in this Chamber about growth, or rather the lack of growth, given the parlous state of the economy. Only today the Construction Products Association revealed that in the third quarter of this year, whatever slight improvement there might have been in the rest of the economy, construction activity declined again, in both the public and private sectors, and there is no expectation of any growth in the sector until 2014, despite all the Government initiatives and those that are proposed.
What is more surprising, however, is that we are talking once again about planning. It is only a matter of weeks since we were here discussing the revised version of the national planning policy framework, which had been subject to months of consultation. To be fair to the Government, they had listened. The Communities and Local Government Committee produced a report, which was agreed unanimously by its members, and the Government accepted nearly all its recommendations. There was a general welcome for the statement, both across the Chamber and by most outside organisations. Only a few weeks after that general agreement on the way forward for planning, we are talking about measures that were not even part of the consultation that took place over many months last year and the early part of this year. It seems that we are back to the old situation: when in doubt, blame the planners.
It was interesting to listen to the right hon. Member for Arundel and South Downs (Nick Herbert). I think that he is right: there is simply no evidence for the claim that the planning system in this country is an obstacle to growth. When the Select Committee took evidence about the national planning policy framework, we could find no such evidence, and Ministers never brought forward any. If there is any, will someone please stand up and say so? We really need to put that argument to bed once and for all. We have heard that 87% of applications last year were approved and we know that 400,000 homes could be built on sites that already have planning permission. Those are the figures and that is the current situation.
When Governments start to change, or even suggest changing, the planning system, there is always a danger that that in itself will create uncertainty, both for councils and for potential applicants, and that that uncertainty will create delay and have the opposite effect of the Government’s initial intention.
What is the situation and why are we here today? My right hon. Friend the Member for Leeds Central (Hilary Benn) got it right. Over the summer, we could almost see the wringing of hands at No. 10 and No. 11 because the economy would not move. They were worried about why there was no growth, not sure what to do about it and looking for others to blame. We could almost hear the call to the Secretary of State: “Find me some initiatives. Anything will do, so long as we look as though we’re doing something.” They came up with what can best be described as a rag-bag of measures which have not been thought through. Ministers at the Department were then given the job this afternoon of trying to justify the measures with some sort of coherence, and to work out how to implement them.
In his first appearance before the Communities and Local Government Committee, the planning Minister had a difficult job explaining why there were no criteria to justify so many of the measures and why there were still going to be consultations. I thank him for replying to us, as we requested, with the list of consultations on secondary legislation that the Government intend to undertake—there are rather a lot of them—in order to implement the measures that they think will stimulate growth in this country.
I am not going to say that this is the end of the planning system as we know it, but clause 1 is a fundamental attack on localism. This goes to the heart of what the Government have been talking about for a long time. First we had localism, which is about transferring power to local communities. I support that principle and some of the things that the Government have done. We then had guided localism, which is about giving powers to local communities and then telling them how to use them. For example, local authorities have the power to decide how often to empty their bins, but the Secretary of State knows best and will tell them how to do it. Now we have muscular localism, which is a wonderful phrase. The Secretary of State embodies it—it is his own and he has taken it to himself—and we are now able to see what it means. It is about giving powers to local communities, telling them how to use them and then, when they do not use them in the way in which the Secretary of State thinks they should, taking them back. For muscular localism, read centralism, with or without the cigar to which my right hon. Friend the Member for Leeds Central alluded.
We are in a peculiar situation. The Government have said that local plans should be at the heart of the planning system, but they are now proposing that local applications made by local developers should be judged against the local plan not by the local authority, but by the centralised Planning Inspectorate. That is a complete contradiction of the Government’s policies.
We do not know how this system will operate or whether it will have any great impact. When the planning Minister gave evidence to the Committee, he said that it might only apply to a few cases for a short period. He did not anticipate many problems and thought that councils would up their game and respond, but we do not know what criteria they are supposed to be upping their game against. We have some idea about the criteria, because the Minister mentioned the speed of applications and the number of decisions that will be overturned on appeal. He then recognised, however, that there were problems with the statistics on the planning performance agreements with individual applications, because they may be skewed in such a way that the Secretary of State would have to have even more powers to decide whether authorities were falling down on their set targets. I thought that the Government were against targets and central assessments, but how can the system be run as defined by clause 1 without centralised targets and centralised assessments? Surely they are inherent in what the Government now propose.
In effect, clause 1 abolishes—this is an attack on the fundamentals of our planning system—the applicant’s right of appeal, which has always been at the heart of the planning system. Anyone who has a planning application turned down has a right of appeal to someone independent of the body that took the initial decision.
As I said when I intervened on my right hon. Friend, the Minister had to accept that consultations on planning applications with the local community will now simply be those that are statutorily required. Most planning authorities go beyond that by calling public meetings, staging local exhibitions where people can see what an application means, and sending letters to far more people than statutorily required, but the Planning Inspectorate will not be required to do any of that. Local authorities will still have some of the requirements, but no fees to pay for them. What a situation to get ourselves into!
As for the nationally significant infrastructure projects, we do not know what they will be. We know that they will involve business and commercial developments, but we do not know whether that includes retail. It would be helpful if Ministers could tell us whether retail schemes are included and whether we are going to drive a coach and horses through local shopping centres without the local community having a say in such decisions. At present, national policy statements—I congratulate the Government on ensuring that they are now approved by Parliament—represent democratic accountability for such decisions. However, Ministers now tell us—the planning Minister was clear, for example, on office development—that there will be no national policy statements. There will be no democratic say on how the schemes should be judged and no democratic involvement in the initial decision. Ministers might seek to defend that, but it is another fundamental change.
Why—the Minister could not explain this—will business and commercial developments follow the route laid down by the Planning Act 2008, but housing will be subject to increased and enhanced call-in powers by the Secretary of State? Why is housing being treated separately? If the Government are concerned about the scale of some housing projects in various council areas, why do they not beef up the duty to co-operate, which is what the Select Committee asked them to do when we addressed these issues some time ago? This is about getting agreement for big schemes across authorities, so surely the duty to co-operate is the way forward, if it means anything at all.
There is no evidence of a problem with section 106 agreements for affordable housing. The letter that the chief executive of the Homes and Communities Agency wrote to me said that it was not an issue. Where is the evidence that there is a problem? Local authorities are renegotiating the agreements where appropriate and in line with local circumstances, but why determine the viability of individual schemes in different localities on a national basis? That is simply not acceptable. The danger is that if developers think they will get a better deal by delaying and going to the Planning Inspectorate once the Bill is enacted because fewer affordable homes will be required, the result of the measure will be the opposite of that intended. Ultimately, we could end up not only reducing the number of affordable houses being built, but, as the hon. Member for Mid Dorset and North Poole (Annette Brooke) has said, reducing mixed communities, because those schemes will all end up being private and the extra £300 million to produce affordable houses will go elsewhere. That is not acceptable either. In some areas there will be no alternative sites, other than those that currently have planning permission to build affordable homes. That is the reality.
I am also concerned about the proposals to use telecommunications equipment in the national parks. Other hon. Members have already made those concerns clear and I support them.
With this Bill, the Government are turning localism on its head. It is a fundamentally centralising measure. If the Government were able to argue that, pragmatically, it was worthwhile for them to go back on their principles because it would result in stimulating growth as intended, I would be able to understand. The likelihood, however, is that they will abandon their principles without achieving any extra growth whatsoever.
Charlie Elphicke (Dover) (Con)
I rise to welcome the Bill and to speak particularly about infrastructure issues, which I hope the Committee will explore when it examines the Bill clause by clause.
The Bill’s long title says that it is
“To make provision in connection”
with “the provision…of infrastructure”. In that context, I particularly welcome clause 7, which deals with the speeding up of broadband infrastructure provision. However, not all infrastructure comes cost-free; much of it is paid for out of public funds. Broadband infrastructure is made great use of by content providers, not all of which contribute to public funds as they perhaps should. Google, a big content provider, had declared earnings for the financial year of £2.5 billion, with a pre-tax profit, estimated on the basis of its global operating margin, of £836.7 million, and a tax charge of just £3.4 million, which is equivalent to an effective tax rate of 0.4%.
Payment for the provision of infrastructure is an important matter, particularly in the case of companies based overseas—big multinationals—which, according to Securities and Exchange Commission filings, have much higher effective tax rates in their home territories: 21% in the case of Google, whose effective tax rate over all its foreign territories is just 3.25%. The same is true of Amazon, which had declared UK earnings for the financial year of £3.9 billion, a pre-tax profit, estimated on the basis of its global operating margins, of £76.9 million, and a tax charge in the UK of £1.9 million—equivalent to an effective tax rate of 2.5%, while back in the States it had a rate of 31.2%. It is very important to tackle the abuse of the tax system and make sure that people pay their fair share to the UK authorities. I welcomed the statements that the Chancellor and Wolfgang Schäuble made about this. When the Committee considers clause 7, I hope that it will focus on how infrastructure can be paid for, because that is an essential issue, particularly when the money comes from taxpayer funds.
I welcome clause 3, which deals with the cost of compulsory purchase inquiries. In Dover we have an office building called Burlington house which is the subject of a compulsory purchase order application that will go forward in due course. There is great concern about the cost of CPOs, and it is important to speed up inquiries and ensure that resisting a CPO is not penalty-free.
Clause 5 relates to section 106 obligations. I hope that the Committee will explore in more detail the question of infrastructure contributions where a business is clamouring for infrastructure to be put in place. For example, the east Kent access extension of the A256 in my constituency cost public funds £87 million, but the contribution from the business that was clamouring for it—Pfizer, which has a plant in Sandwich—was only about £1.6 million. Business is making a very small contribution. We should be rather more robust in saying, “Perhaps you should pay a bit more for the infrastructure you’re clamouring for”, particularly when, once it is built, the company closes down its plant, losing a lot of jobs. Pfizer had declared UK earnings for the financial year of £1.8 billion and a pre-tax profit, estimated on the basis of its global operating margin, of £347 million, and it did not pay a penny in tax in the UK in the previous financial year or the year before that. We should say to large multinationals, “You ought to contribute to the cost of this infrastructure. You shouldn’t play the game of transfer pricing and royalties—you should think of helping to pay for, improve and invest in UK infrastructure, thus helping the UK to grow.”
Clause 5 deals with the important aspect of viability. My own district council in Dover has been very positive in relation to viability by engaging with developers and talking about affordable housing contributions, but I recognise that that is not true of every district council or planning authority. We need to consider the whole issue of viability and how to ensure that there are strong, overarching powers should the need arise.
On the chapter entitled “Economic measures”, I welcome the provision on employer owners, but I hope that the Committee will explore the growth side in terms of open and competitive playing fields and level markets. For example, why should Costa Coffee pay tax while Starbucks, which has declared UK earnings for the financial year of £397 million and made a pre-tax profit, estimated on the basis of its global operating margin, of £59.6 million, paid no tax at all? That is a matter of great concern. I hope that we will examine transfer pricing and the abuse of our tax system to make sure that a fair share of tax is paid in the UK as well.
Mr Andy Slaughter (Hammersmith) (Lab)
Whatever this Bill is about, it is not about growth. I have the authority of the Prime Minister on that, as he said in May this year:
“If you could legislate your way to growth, obviously we would. The truth is you can’t.”
I am afraid that, as many hon. Members have said, the Bill is about turning localism on its head and it is an utter centralisation of planning policy that has served us fairly well over the past 60 years. The question therefore is why the Government are doing it. I fear that this is about finding ways in which the rights and interests of local communities can be overridden in the interests of private profit and of vested interests. I will explain why I say that on the basis of my own experience. Given the time constraints, I will speak about clauses 1 and 5, with perhaps a digression on village greens if I have time.
I represent an area where the local authority already practises the policies that the Secretary of State would like to see in operation nationwide. That is not a coincidence; he describes Hammersmith and Fulham as the apple of his eye. The Government have already adopted many of the housing policies that that authority has set out. Near-market rents, no security of tenure, no obligation for permanent re-housing, little or no capital investment, and discrimination in allocations against those in housing need: all these policies were pioneered in Hammersmith and Fulham.
Similarly, the two guiding principles of planning there are to make every decision on the side of the developer under the catch-all title “Open for business”, and to ensure that not a single new social housing unit is built in the area despite there being 10,000 people on the housing waiting list. One might describe this approach as a little pimping for developers on the one hand, and gerrymandering on the other, and both seem to be admirably reflected in clauses 1 and 5 of the Bill. We therefore have a warning of what is to come if these policies are adopted nationally. There is some irony in the fact that local authorities currently have huge discretion in being able to put into practice many of the things that the Bill aims to achieve.
There are three opportunity areas, primarily in my constituency, on which the local authority intends to construct 22,000 new homes—in one of London’s smallest and most densely populated boroughs. These are not sustainable homes. Generally speaking, two and three-storey Victorian or Edwardian houses, or similar, are being replaced with 30-plus-storey blocks of flats. The guiding principles are that not one of those 22,000 homes should be a new social home for rent, that very few of them should be for families, and that very few should be for occupation—they are, in effect, investment properties that are principally advertised abroad. This is the developer’s agenda. These types of development, which replace affordable or low-rise housing, generate the maximum profit.
Let me give an example. The largest inner-urban development outside China is called Earl’s Court and West Kensington. It is an £8 billion development involving the demolition of 760 newly modernised affordable homes and the construction of 7,500 primarily luxury high-rise homes by Capital and Counties, a large property developer. That is a matter of such contention that there are already three judicial reviews under way or planned—on the consultation process, the planning process, and the viability issues. There is a Scotland Yard inquiry and a separate inquiry that is being run by the council’s chief executive into misconduct in public office on the basis that, given that residents of the area voted four to one against the new development, there are 22 witness statements saying that individuals were offered, as a bribe or an incentive, an early mover home in the new development in order to induce them to move. The local authority will receive £105 million as a capital receipt for giving vacant possession of an area in which 760 tenants, leaseholders and freeholders currently live. The development will take 20 years and there is no guarantee that it will ever be finished. It is being organised by shell companies, and in part by a company whose principal shareholders are the Kwok brothers, currently under arrest in Hong Kong. At best, thousands of my constituents will spend up to 20 years effectively living on a building site.
The Secretary of State talked about viability, but that cuts both ways. He meant, I believe, that local authorities are over-demanding when asking for affordable housing on sites, but equally we have the spectre of developers doing a deal and knowing that their final profit—particularly over a 20-year period—will be excessive. How do they maintain that position? They do it by ensuring that agreements contain confidentiality clauses that no one can see other than members of the council’s planning committee. Once the clauses have been viewed—under conditions of great security—members of the committee are not allowed to repeat what they have seen. Although an independent valuer suggested reappraising the public benefit, over a 20-year period, of the development I have mentioned, that was not reflected in the planning report. Members of the planning committee were not informed that that was the case, and the officer’s recommendation was to turn the suggestion down.
The Secretary of State has a role in that scheme, not just in planning call-in, but in approving a significant land sale. He has refused to meet me to discuss that, however, on the basis that the matter should be dealt with locally, and there is some irony there. In such cases, when developers snap their fingers, local authorities that take the same view as the Secretary of State in this Bill, and simply jump.
I wish to give three examples of how section 106 planning agreements have been renegotiated in my constituency. First, a 100-unit housing development near Hammersmith Broadway was given planning consent that included provision for 10% affordable housing. The developer came back and said, “I’m sorry, we can’t afford any affordable housing in this development”, and the local authority said, “Yes, that’s fine.” The development was advertised not locally but in The Straits Times as a location between Heathrow and Harrods for people who wish to have a property in the UK. Clearly, the elimination of any affordable housing units in that area helped to ensure that the development was more prestigious and luxurious.
Secondly, several areas of affordable housing were granted as part of the planning consent for the Westfield development—a major shopping centre in my constituency. The first was built when there was still a Labour authority, and is an award-winning development of 80 affordable homes. The other two areas were returned to the developer in return for other benefits, because they were “not needed” in an area with 10,000 people on the housing waiting list. Thirdly, at the St George development at Imperial Wharf, another 250 properties—affordable rented homes in the main—were handed back to the developer because they were “not needed.”
That is what can happen under present legislation if the local authority wishes. Anyone who saw the front page of The Guardian today will have seen that thousands of people are being evicted from properties in London, and in some cases made to move hundreds of miles away because there is a shortage of affordable property. Last week, The Daily Telegraph ran a story that Hammersmith council, along with two neighbouring Conservative-controlled boroughs, wished to build a middle-class housing estate using the borrowing power it would obtain because of the value of its council housing stock. At the same time, that council is selling 300 properties on the open market and hopes to raise £100 million. The money is, in part, being used to assist developers to assemble sites by compulsory purchase, in order—again—to demolish affordable homes and build luxury homes on the site. I admit that is clever, but I do not see that it is either moral or the way in which planning policy should operate.
We do not have a lot of village greens in Shepherd’s Bush, but nevertheless the local authority wishes to “sweat the asset”—its own phrase—and build on public parks. In one case, it wanted to sell a third of a public park in Hammersmith to build a car park, a bar, and commercial sports pitches that would be unusable by local residents. We do, of course, have recourse to existing legislation. When the council tried to build on Shepherd’s Bush green, for example, a successful planning inquiry was held and because it was common land, the Department for Environment, Food and Rural Affairs had the final say and the Planning Inspectorate became involved. I do not claim that the power to designate something a village green is never misused, but it is one of the few weapons in the armoury of the David and Goliath battle that takes place every week and month between local residents and developers. I would, therefore, be loth to see it legislated away in this way.
Even without the heavy hand of central Government coming in on the side of the developer, current planning policy can still be used by bandit local authorities such as mine, and by dodgy developers, to ensure that local residents always come last. Any development that takes place is unsustainable and does not serve the interests of local residents, just those of private profit. It is a great regret that, as I said in my intervention, such things are done by a number of developers who are also significant contributors to the Conservative party, and I believe that the Government have lost their way on the issue. They are putting residents last and developers first, and this Bill is another nail in that coffin.
Robert Neill (Bromley and Chislehurst) (Con)
I always appreciate forays into family history from those on the Opposition Front Benches, and I am sorry that the right hon. Member for Leeds Central (Hilary Benn) is not in his place. I imagine that democratic centralism was imbued into him at the paternal knee. His references to it were undoubtedly entertaining, although the House might appreciate a modest reality check thereafter. A reality check, it seems to me, is an old advocate, and in my experience a fair one. The weaker one’s opponent’s case, the more rhetoric they feel obliged to use. I hope that my right hon. and hon. Friends on the Front Bench will take on board the reality, which is that the Government inherited a planning system that was seriously failing. We have put in place important measures to improve things through the Localism Act 2011 and the national planning policy framework, and improvements are being seen.
Under the previous Government’s watch, the Killian Pretty review pointed out that only three out of 64 major schemes proceeded without delay and referred to the expense that that brings. This Government have been trying to put that right. A number of measures in the Bill pick up on issues that were flagged up in the consultation on the NPPF, so the suggestion that they are incompatible is nonsense. The NPPF did not require primary legislation because it was a matter of policy. The issues that were flagged up and are dealt with in the Bill do require primary legislation, so it is perfectly logical to legislate to put those measures in place.
Let me deal with clause 1, about which there has been much heat and not much light from Opposition Members. I take on board—I have no doubt the Minister will confirm this—the response by the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Grantham and Stamford (Nick Boles) to the Communities and Local Government Committee. In reality, most planning authorities do a good job, but there are issues about the capacity of smaller local planning authorities. Some matters do not require legislation, but are gradually being dealt with by good practice within the local authority sector itself. My hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) referred to the capacity of planning departments, particularly in some small rural district councils, and, increasingly, shrewd councils in such circumstances are sharing their planning departments. Those of us who have spent many years in local government hope that that will become the norm rather than the exception, and that valuable and comparatively expensive professional services will be shared across a number of planning authorities. That does not alter the position of local councillors, who are accountable to their electors as members of the planning authority, but sharing professional advice makes obvious common sense in the circumstances I mentioned.
That said, although there is good progress, and although the planning guarantee has been an important factor in raising the performance bar, a small number of local authorities consistently do not meet that requirement. As my hon. Friend the Under-Secretary of State set out, that is exactly what the Bill intends to deal with. It does not take many planning authorities to hold up important schemes. That stance is echoed by the Home Builders Federation, which does not regard the Bill as sweeping away the majority of planning authority procedures. In my experience as a Minister and shadow Minister, house builders work hard with local authorities. Good volume house builders such as Berkeley Homes and Countryside Properties generally do not end up on appeal, because they “roll the turf” first, using the requirement for pre-engagement and consultation with councillors, council officers and their communities. That works in many cases. The Home Builders Federations has stated that it welcomes
“the option of, in extremis, enabling home builders to apply to the Secretary of State where a local authority has a record of very poor performance.”
That is what clause 1 is about—it is sensible and proportionate.
Mr Raynsford
The hon. Gentleman has said twice that a small number of authorities have, in his view, an unacceptably poor standard of performance. Will he please name them?
Robert Neill
The right hon. Gentleman tries the same old trick as the shadow Secretary of State. Importantly, my right hon. Friend the Secretary of State made it clear that there will be criteria, and my hon. Friend the Under-Secretary has said there will be criteria and an objective test. I am not foolish enough to go down the route the right hon. Gentleman suggests, because I am not privy to the work that we did to develop the objective test, but I have complete confidence that the test will be a sensible one. The point he attempts to make is a bogus one, as he well knows. With every respect to him, I ought to be used to that by now.
The second point to remember about clause 1 is that, although it has been suggested there is no right of appeal, the clause shows common sense. If in a rare number of cases a decision is taken by the Secretary of State, he can hardly appeal against it—that would be nonsense. However, the option of judicial review on that decision remains. As all hon. Members know, recent experience indicates that developers and other groups have not been slow to exercise the right of judicial appeal when they think there are grounds. The safeguard that remains is therefore a significant one.
Martin Horwood
The hon. Gentleman is too wise to fall into the Opposition’s trap of naming specific authorities that, in the phrase he used, were guilty of poor performance, but will he define what he means by poor performance?
Robert Neill
I do not have all the information that Ministers have to draw a distinction, but the statutory time limits in which decisions must be taken, the planning guarantee and adherence to the mechanism of voluntary local planning agreements would be a starting point in determining performance. I have perfect faith in Ministers to develop sensible and transparent criteria, and that they will assure us on that. Those proportionate and sensible proposals complement existing policy.
The same applies to clause 2 and the question of costs. Some fuss was made about costs, but I hope it was based on a misunderstanding of the proposal. Clause 2 enables the Secretary of State to claim the costs of an appeal proceeding against unreasonable behaviour by any party to the appeal. It does another important thing: at the moment, in the limited circumstances in which costs can be awarded, there is an all-or-nothing situation—a party can get the whole of the costs or none. The position set out in subsections 2(1) to 2(5) is a sensible one. They mean that, where appropriate, a proportion of costs can be awarded, to reflect the fact that more than one party is responsible for delays in the conduct of the appeal. Currently, costs tend to be thrown away only when there is a public inquiry, but clause 2 sensibly says that costs can be awarded, when appropriate, when delays arise from written representations. That system works perfectly normally in virtually every other kind of civil and commercial litigation in this country. To introduce a similar and equally proportionate measure for planning is more than reasonable.
This Government have given local power to local authorities. The previous Government authored the imposed regional strategies and a standards regime that was often regarded as intimidatory by many councillors who spoke out on behalf of their residents, and they gave us 13 years of rate capping, to name but a few of their measures. It is understandable that local authorities felt they had no power in such centralising circumstances. We have returned genuine power in all those matters to local authorities, and it is not unreasonable to say, “With power comes responsibility.” In quasi-judicial matters such as planning, it is not unreasonable for us to say, “You must carry out the decisions entrusted to you in a timely and efficient manner.” In reality, that is what clauses 1 and 2 are about. It is nonsense for the Opposition to suggest otherwise.
I welcome other important measures in the Bill. I was particularly pleased to see the tidying up in clause 6 of loose legislation that this Government inherited from the previous one. The duplication of consents regimes needed to be dealt with.
I also welcome the provisions of clause 8, which deals with minerals planning. The ready supply of minerals and aggregates is important to the economic growth of this country. Generally, the minerals planning industry has shown good social and environmental sense in carrying out what is sometimes sensitive extraction. The extraction can happen only where the minerals exist, so giving more flexibility to local authorities in when they carry out minerals plans reviews is sensible. It is localist, but it also enables investors in minerals planning to have appropriate confidence to make the investment necessary. That is a small but critical step, because minerals and aggregates are critical to the construction industry. It will be worth flagging that up during debates on the Bill.
On business rates, I urge my hon. Friends the Ministers not to be put off by some of the specious arguments from the Opposition. The previous Government have on their track record one of the worst examples of abuse of the business rates system to the detriment of small and medium-sized businesses that I have ever come across. They obdurately refused, in the face of overwhelming evidence, to remove an effectively retrospective tax on businesses in our ports, which put firms out of business and put British workers out of jobs, and caused serious British investors, such as DFDS Seaways and others, to rethink their UK investment plans. The previous Government did nothing about that despite having the clearest evidence in front of them. One of the first legislative acts of this Government reversed that injustice and safeguarded that important British business sector. I therefore hope my hon. Friends the Ministers will take no lectures on that from Labour.
As has been amply demonstrated, there is good evidence to suggest that, because of the interaction of the rental values that are used to calculate business rates and the multiplier, it would be misleading to tell people that revaluation will automatically result in a reduction of the amount of business rate paid. I therefore hope that Ministers will not be put off course on that. It is also worth bearing in mind the other assistance that this Government have given, particularly through small business rate relief, which we extended for an unprecedented period—again, something that Labour did not do. The democratic centralists—[Interruption]—or, lest there be any confusion, what I might call the “cradle” democratic centralists, have been long on rhetoric, but rather short on evidence. I hope the House will see through them and support this sensible and constructive Bill.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
I think Ministers know that this is a rubbish Bill. We have seen no defence at all against the attacks from the Opposition Benches, particularly from the shadow Secretary of State, who, if I might say so, did a decapitation job on the Bill.
The Bill contains clauses with which I find myself in contention—namely clause 23 and its provisions to diminish workers’ rights—but it also provides us with opportunities to devolve power to the Welsh Government, so that they, too, can promote growth and boost infrastructure. I will focus on those provisions that are not currently in the Bill, but which would improve it in achieving its billing, namely the proposals behind the “Build for Wales” programme, as promoted by my party, which is a far more cost-effective alternative to private finance initiatives. The “Build for Wales” project would establish a Welsh infrastructure investment and management company to tackle the constraints on public sector investment in Wales. A not-for-distributable-profit company limited by guarantee, it would be responsible for the funding and implementation of public sector infrastructure projects, with any profits invested in other Welsh public sector infrastructure.
As the Minister will be aware, despite the fantastically vague announcement made by the UK and Welsh Governments last week, the Welsh Government are still unable to borrow and cannot raise taxes to increase their income. Indeed, if money is unspent at the end of the financial year, the Treasury can claw it back. If memory serves, the amount clawed back in that manner last year was £400 million—money that should have been redirected to the Welsh capital budgets, which have been slashed, with 42% cuts in the current spending review. Were the Welsh Government able to establish a not-for-distributable-profit company, as we have suggested, the Welsh public sector could plan capital expenditure in the long term—a prudent approach normally favoured by the Treasury. It would also lead to the creation of a specialist company with a knowledge base in procurement and negotiation with contractors, which would help to deliver projects efficiently. Finally, the fact that profits would be reinvested in other public sector projects would increase employment in the construction industry and so boost growth in the economy. I plan to table amendments to the Bill at later stages to take those points forward, and I look forward to fruitful discussions with Ministers on these possibilities.
Many clauses in the Bill as it stands evidently aim to speed up infrastructure projects by cutting unnecessary red tape and amending existing legislation. I hope that the Minister will share my view that our “Build for Wales” proposals are very much in the same vein. Clauses 17 and 18 provide powers to vary planning consents for energy infrastructure projects, which gives the UK Government a fantastic opportunity to devolve energy planning powers to the National Assembly—a provision they unfortunately failed to include in their draft Energy Bill earlier this year. As Ministers will be aware, at present the Welsh Government have powers only over proposals for energy generation projects of up to 50 MW on land and 1 MW at sea. This arbitrary set-up means that a generating station that would generate 49 MW is decided on by Welsh local planning authorities, but those generating 51 MW or more must be decided on by the Secretary of State in Whitehall.
The Pen y Cymoedd wind farm in south Wales, for example, will generate an estimated 250 MW, so the decision to grant permission for it was made by the Secretary of State in Westminster, not the democratically elected Welsh Government in Cardiff. In my constituency I have two TAN 8 areas—so-called after technical advice note 8—one of which, area G, is in Brechfa forest. Currently, two planning applications are going through: the Llanllwni project, which is below 50 MW, and the Brechfa West project, which is above 50 MW. Local people are confused—I am confused, and I am their Member of Parliament. It would be far more reasonable to extend the Welsh Government’s remit in line with that of the Scottish Parliament, so that the people of Wales have complete control over how their natural resources are utilised. I have previously argued for exactly that provision in amendments to the Localism Act 2011, during its passage through the Commons last year, and in a ten-minute rule Bill that I introduced last January. I will be tabling similar amendments to that end at later stages of this Bill’s passage.
Clause 22 postpones the next non-domestic rating revaluation, in a bid to allow businesses in England to focus on growth. As the Minister will no doubt be aware, the current situation is disadvantageous to Wales, as the Welsh Government hold no power to alter the non-domestic rates multiplier, which is currently set by the UK Government. Devolving business rates to the Welsh Government, as in Scotland, would allow them to use the rates more strategically to promote growth and incentivise local authorities to expand their economic bases. The recent business rates review, published by Professor Brian Morgan of Cardiff university and commissioned by the Welsh Government, argues for the full devolution of business rates, describing it as
“an anomaly which needs to be addressed.”
I would suggest that the Bill affords the UK Government the opportunity to correct it.
Finally, as the son of a trade union shop steward, I must express my concern about clause 23. It would create a new employment status—“employee-owner”—which would mean workers losing vital employment rights in exchange for shares in their employer’s company. Although we support co-ops and workers’ rights, they should not be transferred in this backhanded way. As my hon. Friend the Member for Dundee East (Stewart Hosie) set out earlier, in return for shares in the company to a value of between £2,000 and £50,000, workers would lose their rights on unfair dismissal, redundancy and flexible working, along with some maternity rights. The Government have rightly been accused of introducing back-door deregulation of the labour market on a huge scale with this provision. Many fear that if it is implemented, employers will use it to get round labour market laws. It is a drastic and retrograde provision, and it must be removed from the Bill.
The Bill as it stands will do nothing to promote growth and investment in infrastructure. I hope that Ministers will engage constructively with some of my suggestions this evening, which will help the Bill to achieve its aims, at least in Wales, by empowering the Welsh Government with the necessary tools to do the job.
John Stevenson (Carlisle) (Con)
I would like to make a small contribution to this important debate about what are serious issues, with the potential to benefit our economy. Even with the recent positive growth figures, it is clearly acknowledged that everything needs to be done to ensure that our economy continues to grow and expand. In itself, the Bill is no panacea for our economic difficulties; indeed, no legislation is or can ever be. Nevertheless, it is a welcome addition to the efforts to help our economy to recover, not just in the short term but, just as importantly, in the longer term. Of course we all want to see growth now, but it is critical that we have the ingredients in place to ensure that our economy has the wherewithal to expand, not just in the coming months, but in the future. Quite simply, we need modern infrastructure to achieve future growth. The Bill makes a small contribution towards that.
I wish to concentrate on two issues. In the short term, the more immediate need is to ensure that the economy continues to grow over the next few months, particularly as we have some momentum from last quarter’s growth figures. There are clear immediate benefits from continuing with the Government’s aim of simplifying the planning process. It is critical that planning applications are encouraged and, where they have merit, passed as quickly as possible. I fully accept that this is not the whole solution, but it is certainly one of them. We need to ensure that the process is efficient and that bureaucracy and red tape do not get in the way. Indeed, where councils are failing to provide such a service, it is absolutely right that the Secretary of State has the power to intervene. Arguably, where councils are failing, they are effectively letting down their communities. It is incumbent on the Government to step in and sort it out.
It is also right that, where appropriate, section 106 agreements are revisited. We live in a different economic environment now. If altering a section 106 agreement helps to bring forward a development or make it stack up financially, that is exactly what we should be doing. Indeed, even if only a handful of section 106 agreements are revisited and improvements are made to them, that will clearly be beneficial.
Another immediate issue is the postponement of the business rates revaluation. I would normally have concerns about such postponements, but I believe that, in the present climate, it is far more sensible to create as much certainty as we possibly can for businesses. They need to plan for the future, and their most common criticism of the Government involves a lack of certainty. Even more relevant in these difficult times is the fact that we must do everything possible to ensure that businesses have certainty, and if they know that their rates will stay broadly the same for the next five years, they can concentrate on their core business and plan accordingly.
As I have said, the long-term growth potential of the economy is equally important. To achieve this, we need to have infrastructure such as roads and railways in place that will allow expansion in the years to come. Clearly, we need to bring forward or encourage capital projects and serious infrastructure investment by the private business sector as well as by the state sector. One of the key areas for growth is broadband.
I have always been a great fan of the Victorians, and I am particularly in awe of the huge number of infrastructure projects that our Victorian ancestors completed. We forget that they effectively transformed this country in a remarkably short time. Their communications revolution involved the railways, which connected our great cities. For example, they connected my city of Carlisle with London, Manchester and Glasgow. That brought great benefits to businesses and consumers, and we are still reaping the benefits of that revolution today.
Broadband, from a business point of view, is the modern equivalent. Superfast broadband is absolutely vital for businesses and consumers. It will allow businesses to compete, develop and grow. In addition, it has the potential to help rebalance the country. Proper broadband infrastructure will create business opportunities in such places as Carlisle, which would then be able to compete on a more equal footing with businesses in places such as London and Manchester. Anything that will help to roll out broadband should therefore be welcomed and supported.
As I have said, changes to the planning process will have an immediate effect as well as long-term benefits for our economy. Critically, simplifying our planning process will give developers confidence that applications will be heard expeditiously. Planning applications—particularly the large ones—can be hugely expensive. It is therefore vital that we encourage businesses to plan for the future and to have confidence in the system.
James Wharton (Stockton South) (Con)
I am listening carefully to the powerful case that my hon. Friend is making. He has not yet mentioned the role of local authorities in planning. Does he agree that, whatever changes are made, it is important that local authorities and the communities that they represent should continue to have a role right at the centre of our planning system?
John Stevenson
I completely agree with my hon. Friend.
I was about to make the point that it is crucial that central Government do not lose sight of the importance of local authorities. We often talk about national issues, national solutions and national policies, but many of the solutions lie in our local communities where local solutions for local issues can be just as effective. It is therefore vital that central and local government do everything possible to encourage the upgrading, improvement and development of our nation’s infrastructure. That will go a long way towards boosting growth in the short term and the longer term. Our Victorian ancestors were hugely successful at that, and I see no reason why we cannot do likewise today. I fully support the Bill.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
It is a great pleasure to follow the hon. Member for Carlisle (John Stevenson). He and I spent many a happy afternoon on the Joint Committee on House of Lords reform, which was a hugely effective use of our time. The failure to use that time effectively is why we are here today, as the Government try desperately to fill the gaping hole in their legislative agenda.
I would like to begin at the beginning. The Government inherited a difficult economic scenario, then proceeded to make it infinitely worse by slashing capital spending, sucking demand out of the economy and sending us into a double-dip recession. Since then, they have been in catch-up mode, trying desperately to find policies that will get us out of our economic situation. Their first attempt to find a solution involved the national planning policy framework. There was no real evidence base for that proposal, but we none the less spent a happy spring and summer debating it. There was no evidence that relaxing planning permissions would give the kind of economic boost that we needed.
When we looked at the economy of Ireland, which has one of the most liberalised and disastrous planning systems in Europe, at the economy of Spain, with its equally unregulated planning system, and at the economy of Italy, it became clear that the deregulation of planning was not going to provide the economic boost that we were looking for. We went through chaos and U-turns with the national planning policy framework. It was an absurd idea, and we are now told that this legislation is the follow-up to it. I remember sitting through those debates, however, and no Minister at the Dispatch Box ever said, “Hold on, we’re going to come back with the Growth and Infrastructure Bill in the autumn. This is all part of a grand plan, an organic process, a strategy for growth.” No; we had an enjoyable debate on the framework and it was signed off, but there was no hint at that time that we would be back here debating these issues now.
We are back here debating these matters, however, and once again we have heard unpleasant abuse and ridicule being heaped on environmental and civil society groups such as the National Trust and the Campaign to Protect Rural England, which have dared to come up with objections to the growth-at-all-costs plans of this Government. The new planning Minister, the Under-Secretary of State for Communities and Local Government, the hon. Member for Grantham and Stamford (Nick Boles), has called members of the National Trust “luddites” for daring to suggest that we should value such things as beauty and planning in our natural environment.
This is a dog’s dinner of a Bill, brilliantly dismantled by the shadow Secretary of State, my right hon. Friend the Member for Leeds Central (Hilary Benn), in his clinical dismemberment of the provisions before the House. I am pleased to see that the hon. Member for Cheltenham (Martin Horwood) has beside him a copy of the report by Lord Heseltine, “No Stone Unturned”. If he turns to page 2 of that document, he will see a picture of Joseph Chamberlain, complete with an orchid on his jacket. If he turns to the final page, he will see a picture of Manchester town hall. The point of the Heseltine review is that it is a celebration of local government, of regional identity and of local civic pride. Yet, one week later, we are debating this Bill, which is all about the destruction of local democracy and the dismantlement of local action by local people.
Clause 1 is dirigiste and Napoleonic. Above all, it represents a massive U-turn by the Government from their localism agenda. We have only to look back to the passage of the Localism Act 2011, when the former planning Minister, the right hon. Member for Tunbridge Wells (Greg Clark), said that
“we should move away from a system of planning by development control, where recourse is made to the Planning Inspectorate rather than local decision makers, which is how the future of our communities has been developed. I want fewer appeals to the Planning Inspectorate and more decided locally.”—[Official Report, 17 May 2011; Vol. 528, c. 273.]
[Interruption.] It is no wonder, as my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) says, that that Minister has now gone.
Instead, we are seeing a remarkable U-turn from localism to centralism, which is stripping designated local planning bodies of their capacities. We do not know how the capacities are going to be designated in the case of failing local authorities. When the Secretary of State was asked today for an example of such a local authority, he cited Hackney. We have discovered, however, that when efficiency and the time taken to process planning permissions are taken into account, there can be no suggestion that Hackney would fall into that category. The Secretary of State was making it up as he went along.
The language being used is instructive. It is the language of special measures, similar to that used of schools that the Secretary of State for Education deems to be failing. The same relentless centralism that we are seeing from the Department for Education is now being spread to local government. Any pretence of localism has ended today. There will be an end to pluralism and an end to natural rights, with no right of appeal.
Is the Bill a solution to the problem? We understand that there are problems promoting growth, but is further deregulation of the planning system the answer? I know that this Government are not particularly interested in evidence-based policy making, but the evidence suggests not. As my hon. Friend the Member for Sheffield South East (Mr Betts), the Chairman of the Select Committee, set out in great detail, 87% of planning applications are approved and 400,000 new dwellings have approval. It is not the lack of planning policy that is preventing their development. More than 90% of applications are decided in 26 weeks. Where, then, is the problem when it comes to planning policy? As we know, the problem is the ability to gain mortgages, the lack of demand in the economy and the lack of confidence in the economy: none of these problems is going to be solved by this kind of reform of the planning system. In fact, we shall see more confusion, more disarray and more delays in the planning system as a result of yet another bout of “initiative-itis” from the Government.
Again, where is the problem with the section 106 agreements? We have heard various curious statistics from the planning Minister, the basis of which he has refused to reveal. Everyone who has something to say about construction and development and the role of 106 agreements says that there is no problem with how these matters are currently dealt with. The provisions in the Bill could slow up development, as developers wait for changes to happen and will not get on with the construction that we all want to see.
Clause 21 deals with the major infrastructure regimes. It will continue the instability and the confusion. Under the clause, businesses and commercial projects of national significance can be taken into the hands of the Planning Inspectorate. However, these will not be subject to national planning policy statements, and we do not know whether retail parks or indeed leisure parks will be included, so all that the Minister of State, the hon. Member for Hertford and Stortford (Mr Prisk), has tried to do with respect to high street development, the Portas review, city centre development and so forth could be undone at a stroke by what is in the Bill if development law suggests that retail parks assume this national development significance.
Let me deal with clause 7. As you well know, Mr Deputy Speaker, the national parks movement grew out of the inter-war sprawl when our natural environment was under attack. Our green and pleasant land was being ruined by urban sprawl and excessive deregulation. This was the precursor to the development of the green belt and the Town and Country Planning Act 1947, but also to the national parks movement. The Bill begins the dismantling of that very important protection for our great landscapes of Exmoor, Dartmoor, the Lake district and the Peak district. It begins with broadband boxes, but then what? Once the sacrosanct nature of these developments is taken away, we will be on a very slippery slope.
Clause 23, which deals with employee owner shares, provides us with a sense of chaos in that we can go from national parks to employee owner schemes in the same Bill. How can that be any cohesive plan for economic development? As a rule of thumb, we can all agree that policies announced at the Tory party conference are never a particularly good idea. Labour Members adore shared ownership, as it is part of the heritage of mutualism, co-operatives and socialism, but we do not promote it at the expense of the fundamental rights of an employee. If we look at international examples, it does not seem to me that the great success of the German economy over the last 10 years was the result of an attack on employee rights in any shape or form.
This is a wretched little Bill, which should go no further. What is interesting is that it speaks to the current state of the Conservative party. I can trace no influences from the Liberal Democrats. We have heard speeches saying how bad the Bill is, but that they will have to vote for it. The most influential speech this afternoon was expressed, I felt, in the rather elegiac tones of the right hon. Member for Arundel and South Downs (Nick Herbert), who lamented the loss of his vision of what this Government should be about, as localism and decentralisation died—sacrificed on the altar of a failing economic strategy as centralism took over. With that came an attack on what the Conservative party is meant to be about. What is it that they are “conserving”; what are they interested in looking after in this country? It is another assault on the British cityscape and on the British landscape.
Good planning—not confusion, disarray and hapless deregulation—is essential for sustainable economic growth. If we want growth and infrastructure, we need stability and order in the planning system, not this dog’s dinner of a Bill.
Anne Marie Morris (Newton Abbot) (Con)
I refer Members to my declaration in the Register of Members’ Financial Interests.
It has been an interesting debate. The topic of growth is certainly front and foremost in all our minds, although we all want to address it in different ways. The fundamental focus has been on planning issues, and I certainly welcome the simplification and the removal of the need for excessive document production. The construction industry needs all the help it can get. I welcome anything that can help our broadband.
If I may, however, I would like to focus mainly on clause 22, which relates to business rates. The Government have proposed to defer revaluation from 2015 to 2017. It is argued that this will provide stability—clearly a good thing for any business, large or small—and that the only concern in the short term will be inflation. I would like to speak up for the small businesses in my constituency, which would say that they are hurting and that even just inflation gives them a pretty big bill. There is a growing sense that it would be useful to review inflation and to freeze it as we go forward.
The Government’s explanation and justification for the provision relates to how the business rate system works. They are right that this is a complicated mechanism: rateable value is taken and then multiplied by a multiplier. It is rather like a seesaw, and when the rateable value comes down, the multiplier goes up—the net-net bottom line is that the same sort of figure will be paid. I and many of the small businesses I speak to would like to see that explained. They find it bizarre when they look at the rate rise of 2010. One of my constituents said, “My rate’s doubled; this is all very peculiar.” We need a proper explanation from the Government as to exactly how this works, because it seems to work only in favour of increasing the tax take.
There are a number of good reasons for thoroughly overhauling this type of taxation. If I had a thought for the Government, it is that in some ways this is a missed opportunity. If action is not taken in this Bill, I hope the Government will take the matter more seriously in a future Bill, because the valuation method is simply not fit for purpose. I have businesses telling me that they are based in a street called “the High street” and that their rates are levied as if they really were based in the town’s main high street. Something is not right there.
The multiplier is a very blunt instrument. There are three levels: one for England, one for Wales and one for London. There is not much between them, but it makes it difficult—in my view and in theirs—for small rural or coastal communities to have a fair business rate set. The appeals system is not helpful either because it requires a business to show that the rate they are paying is unduly burdensome and inappropriate, and it requires them to show their year’s accounts to demonstrate how they suffered. By that time, however, for very small businesses, they are already out of business.
The empty property rate is another area that the Government could look at. It is a real challenge, particularly in today’s climate. After three or six months of vacancy, people can suddenly find themselves stuck with the rate without having the time to sort out the system. To the Government’s credit, however, the small business rate relief shines out as a wonderful step. The increase was made when we came into government—I say very well done; it is greatly appreciated. Indeed, if the mission of this Government is about stability, I would thoroughly recommend that they extend the small business rate relief to April 2015 and the end of this Parliament. If it comes to an end as currently predicted in 2013, it will coincide with the rise in inflation: there will be a double hit. I think that a number of aspects of small business rate relief could be changed apart from the timing. If a change in the timing is not accepted, the Government might consider extending the value of properties that are within the net, and/or reducing the small business multiplier.
One element that people running businesses really value is transparency. They want to understand how the valuation is carried out, they want to understand how the multiplier works, and, most important, they want to understand what services they are receiving. Some of them say to me, “My bins are not emptied, but they would be emptied if I paid council tax.” I do not think that we, as a Government, have made clear how they might benefit. Can they share the services of a town centre manager, for instance? Are they enjoying an improved street scene? What exactly are businesses getting in return for the tax that they pay? I should like to think that the changes resulting from the Local Government Finance Bill will give the Government an opportunity to incentivise local government to repay, with the part of the business rates that they retain, what has been taken from businesses that are contributing to the pot that they have to spend locally.
Let me summarise what I have said about just one clause in the Bill. I think that business rates need a thorough overhaul. We need a tax that is fair to individual businesses as well as being fair to the taxpayer, and we need transparency. We are trying to show individuals where the money that they pay in tax is going, and I think that we should do the same for businesses. I hope that the Government will take the opportunity to review the position at some time in the future, if not in the Bill. I hope that they will recognise that even now small businesses are hurting, and that if we proceed with an inflationary rise, they will really hurt.
Bill Esterson (Sefton Central) (Lab)
I am pleased to be able to follow the hon. Member for Newton Abbot (Anne Marie Morris). I thank her for praising the last Labour Government for introducing the small business rate relief, and for describing it as a great success. I am sure that Members on both sides of the House will give her credit for those comments.
In my speech, I want to concentrate both on housing and the impact that the planning changes will have on my constituents, and on the effect of the changes on businesses—particularly small businesses—and jobs. One would have thought that a Growth and Infrastructure Bill would address both the construction of housing and the growth of business and creation of jobs, but a big question mark hangs over its impact on both. What exactly will it achieve? There is so little meat on its bones when it comes to the way in which the housing that people need will be built, the way in which business will benefit, and the way in which growth will be created. It makes no mention of the possibility that the £4 billion to be raised from the 4G licences, or indeed a repeat of the bankers bonus tax, could enable houses to be built and support the construction industry, helping to create jobs and growth.
My constituency has a great need for housing, jobs and economic growth, but that must be set against environmental constraints. The fact that the constituency contains a series of small towns and villages surrounded by green-belt land, most of it high-quality agricultural land, inhibits the local plan that is being prepared. Developers have been queuing up for many years, buying up plots in the green belt with, no doubt, the intention of building on them at the earliest opportunity.
People in my constituency need homes. Many young adults there live at home or with friends. What do they need, and what do developers want to build? Those are two very different questions. What the constituency needs are homes to buy and homes to rent, but the homes to buy must be affordable starter homes and the homes to rent must also be affordable, in either the private or the social landlord sector. There must also be “part buy and part rent” arrangements. However, affordability is simply not being offered. What developers in my constituency are offering are executive four and five-bedroom houses, and they want to build them on green-belt land because they know that they will then be able to sell them for more money.
David Wilson Homes held an exhibition in Formby, in my constituency. Its representative told the hundreds of residents who attended the exhibition that they considered an affordable home to be one priced at £300,000. That would be out of the reach of most people on average pay in London, let alone on Merseyside. It is clear that that definition of an affordable home was addressed to a group of people who do not live in my constituency, but who might come in from outside.
No wonder there is suspicion about the motives and approaches of developers, and huge resistance to building on the green space both in and outside the towns and villages in my constituency. No wonder there are public meetings attended by hundreds of people in each of the small towns and villages that I mentioned earlier. Residents have formed action groups to campaign against the plans of developers to build on green belt and on urban green space. That is not because they do not want houses; they do, but they know that it takes eight years to reach the top of the housing waiting list, and they know that people in Formby and Maghull do not earn enough to buy any of the £300,000 housing that is being made available. They also know that developers are not interested in helping them, their families or their friends who need affordable homes. Residents believe that there is nothing in it for them, and the Government intend to make matters worse rather than better by cutting the number of affordable homes.
A 500-home development by Ashworth hospital in my constituency has already been given planning permission, under the old system—before the NPPF—and without any affordable housing element. The applicant engaged a QC to demonstrate to Sefton council that the site would be economically viable only if the affordability element was dropped. Even before the NPPF was published, councils were negotiating with developers on section 106 matters, as they always have. Quite why legislation is needed is beyond me, although my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt) suggested that it might be intended to fill up time because of the gaping hole in the Government’s agenda, and that may well be true. Meanwhile, my constituents have been denied the prospect of decent affordable housing, first by the Government’s economic failure and now by the centralising of planning in favour of developers at the expense of local people.
The proposal to allow developers to remove affordable housing will be music to their ears, and no doubt it will result in money in the coffers of the Tory party to say thank you. That will follow the £4 million already provided by the Conservative Property Forum. However, it is homes to rent and affordable starter homes that my constituents need. The proposed green belt development offers them nothing except more congestion on the roads and more flooding on the floodplains, because the whole constituency lies on a floodplain.
Have we not learnt yet about the impact of building on floodplains and concreting over areas where rain water currently drains away? Have we not learnt from the fact that the level of rainfall has increased over the past few years, and the fact that we have just experienced a summer featuring exceptional rain and flooding? Is it not time that the Government gave more consideration to the impact of flooding in drawing up planning policy, rather than allowing developers to do as they wish? Perhaps if this were a proper infrastructure Bill, the Government would be finding a way of replacing our antiquated drainage system.
Councils used to build homes, and large sums are tied up in housing stock. The reason developers are not building is the shortage of funds. If we put those two together, we start to see some solutions. The Local Government Association said of the Bill that it failed to tackle
“the real barriers to growth”,
that
“Further changes to the planning system will not address the key issues stalling development”,
and that
“The Government should use this Bill to lift restrictions on local authority borrowing for housing, freeing councils to build new affordable homes and kick-start job-creating infrastructure projects.”
It also said:
“Councils have a proven track record of prudent borrowing. Their credit rating is excellent and interest rates would be low.”
According to the LGA, the Government must let British councils
“take advantage of these conditions in the same way as municipalities in competing countries, like Germany, already are.”
If the Secretary of State is serious in his offer to work with the LGA, its ideas are there on how to unlock the funds to build the housing, especially the affordable housing, that is needed not just in my constituency but up and down the country. He might also choose to consider the report of the Select Committee on Communities and Local Government following its inquiry into housing finance supply and the opportunities available not just in housing stock within local government and housing associations, but in pension funds and other public sector sources.
Developers are not building because people are not buying and the banks are not lending. Mortgage lending is still falling—it is still at a record low—but in local government there are examples of Labour councils building five times as many social homes as Tory councils with which they can be compared. So there are examples in local councils that the Government could choose to follow if they wanted to.
Without intervention, developers will want to build on the best sites, to build the most expensive houses they can and to make as much money as they can. After all, they are in business to make as much profit as they can. That is why regulation and Government intervention are so important. It is why we have a planning system. There are examples across the country of what happened when planning was not sufficiently robust, whether in commercial or residential developments. That is why we should have a planning system that ensures that developers meet the needs of the country and do not just maximise their profits.
In my constituency, we need affordable homes and the infrastructure to support the people who want to live in them. It is the role of Government at both national and local levels to ensure that developments meet the needs of local areas. That is what the Localism Act 2011 should have been about and now it has been overtaken by this Bill and all the disastrous implications of its proposals and what we are debating tonight.
The reason we have local plans that designate land for residential or commercial development is to ensure that planning is done properly and that communities are given what they need. The Bill would put the power in the hands of developers and prevent any chance of my constituents from benefiting from the housing that they need.
There is nothing in the Bill to recommend it to small businesses. Small and medium-sized enterprises have the ability to grow, to innovate and to drive economic recovery. Where is the intervention with the banks to help small businesses? Why is that not in the Bill? Where are the tax breaks, such as the VAT cuts that Labour has proposed for a number of years? Gimmicks and removing workers’ rights are no way to stimulate growth. Creating greater uncertainty among staff will do nothing to encourage people to spend money, which is needed to kick-start the economy. Business understands that and is saying that.
The Federation of Small Businesses says that its members lose thousands through poorly maintained roads. I have mentioned the problems with drainage. Where are the measures in the Bill to replace the infrastructure that business needs? If this were a proper growth and infrastructure Bill, there would be measures to deal with those issues. This is anything but a growth and infrastructure Bill and the House should oppose it.
Martin Horwood (Cheltenham) (LD)
I am going to make quite a critical speech of the Bill and even perhaps agree with some of the remarks of the right hon. Member for Leeds Central (Hilary Benn), although I have to say that it is rather tough to take lectures on local democratic accountability from Labour Front Benchers who were the authors of the regional spatial strategies that, in the south-west alone, generated 35,000 objections, volcanic local opposition and legal challenges. They wasted tens of millions of pounds and, in the south-west, the strategy was never even finished.
Mind you, the right hon. Gentleman, and the hon. Member for Bury St Edmunds (Mr Ruffley) and the right hon. Member for Arundel and South Downs (Nick Herbert) on the Conservative Benches, were right to worry that we may accidently recreate some of the same tensions at local level, through over-reliance on the same national statistics that the regional spatial strategies used, and on the Planning Inspectorate. I hope that Ministers emphasise to local planners and officers in planning authorities and to the Planning Inspectorate that they should take the NPPF more seriously and, in particular, emphasise its provisions for local authorities to balance growth with social and environmental considerations. They should pay attention to, and proactively use, the new local green space designation in the NPPF and clearly distinguish between housing need and housing demand. The confusion of the two different things threatens valuable and treasured green spaces in areas of high demand such as my constituency.
I have been an enthusiastic supporter of the Government’s localist agenda, partly as a reaction against Labour's regional spatial strategies and partly because, as a Liberal Democrat, I plead entirely guilty to being a doctrinaire localist and environmentalist. I was proud to support the Localism Act and the final draft of the NPPF. I was very proud to support the natural environment White Paper, which is a significant improvement on the previous Government’s policies, particularly in its emphasis on valuing natural capital, but in many respects this rather hasty looking Bill seems to take the Government in the opposite direction. As a Government, we were supposed to balance the dominant pursuit of economic growth with other factors such as the quality of life. This might be a timely moment for that rhetoric to be put into practice and for us to rethink some of the clauses.
Clause 1 threatens local authorities with loss of local power to determine planning applications. The criteria on which that will be done remain unspecified. That, in effect, leaves the Secretary of State with a rather vague and arbitrary power to define those criteria himself. That looks to me profoundly anti-localist and contradicts the Secretary of State's very good record as a doughty champion of localism—so much so that I suspect that it was not his idea. Whoever thought of it, it is a disappointing measure to put in a Bill from this coalition Government.
Clauses 9 and 10 have the worrying new power to stop up and divert local footpaths and bridleways. There is a rationale for that to do with the timing of planning applications. Nevertheless, in the context of other measures in the Bill, I find it rather concerning.
Clause 12 threatens the power to create village greens. On this I do not agree entirely with some of the criticism of the clause. The existing provision has become a tactical device to protect local green spaces from particular developers’ planning applications. That has been pretty unreliable, so it is good that we aim to replace that hotch-potch and accidental approach with the specific designation of local green spaces, which are to be determined at the time of plan making, rather than in response to planning applications. That is an improvement. Of course I would support that because I was responsible for putting it into Liberal Democrat policy, from where it went into our manifesto, into the coalition agreement and then into the NPPF.
However, it is proving pretty difficult to use that in practice at a local level. I have not even managed to persuade or completely convince planners and officers in my constituency proactively to look for and identify areas that could qualify as local green space designation areas. There are good candidates at Starvehall farm, Weavers field and, above all, in the green fields at Leckhampton in my constituency, yet even we do not seem to be developing and using that power properly, so in that respect I suspect that clause 12 may at the very least be premature.
Clause 21 seems designed to use a system designed for national strategic infrastructure, for planning applications for commercial and business use which are not national, not necessarily strategic and may not even be infrastructure. In its current form it looks to me as though it is undermining localism, too.
Then we come to the extraordinary clause 23. I proposed a policy on employee ownership and workplace democracy to this year’s Liberal Democrat conference. I would strongly commend the contents of that and its many recommendations to Government, including the option to bid for employee ownership at the time of transfer of an undertaking, which we believe could result in a step change in employee ownership. However, we strangely overlooked the need to link that to the trashing of people’s employment rights. Why should we remove the right to request training, when we are supposed to support training? Why should we allow more unfair dismissal, when we support fairness? Why should we remove the right just to request flexible working, when we are supposed to support flexible working? I have worked in business, and I have employed many people, and I have never found it very motivating to threaten my team’s employment rights. These rights have never deterred me from employing anybody. This looks like a nasty, vindictive little clause and Ministers should chop it out completely.
Lord Heseltine’s report makes many useful recommendations that would support sustainable economic growth. He talks about promoting unitary authorities, better marketing of the UK as a destination for inward investment, the promotion of investment in new technologies, and better promotion of British interests within the European Union. He also talks about having a definitive and unambiguous energy policy and about better links between further education and local enterprise partnerships, and between industry and higher education. These are all sensible proposals. As a Liberal Democrat, I find it surprising that I am endorsing the work of Michael Heseltine, but this is a very good report, and it was very good of the Government to commission it. A Bill based on Lord Heseltine’s ideas could generate cross-party support.
The Bill in its current form seems guaranteed to generate cross-party opposition, however. Some of its planning ideas look half-baked and undemocratic. It unnecessarily threatens people’s employment rights. None of it was in the Liberal Democrat manifesto or the Conservative manifesto, and none of it was in the coalition agreement. It is unworthy of this Government, and it is very uncharacteristic of this Secretary of State. We should pause it and rewind, and rewrite it along the lines of the Heseltine report. Until we do that, I cannot support the Bill.
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
First, may I draw attention to my interests as declared in the register?
I am pleased to follow the hon. Member for Cheltenham (Martin Horwood), and I agree with most of what he said. He rightly dissected the elements in this Bill that have nothing to do with growth and very little to do with infrastructure, and which are probably in part the product of ideas that were floated by a Mr Beecroft in a report that gained notoriety and should have been consigned to the dustbin. I advise the hon. Gentleman to think about who he sups with in coalition, because his views as expressed this evening are not very close to those that seem to be driving this Bill.
It is a curious Bill, and it has a grand title referring to “Growth and Infrastructure”, thereby implying that it will have a substantial impact on the economy and on development. If it were to stimulate the economy and ensure long-overdue new investment in infrastructure, we would be able to welcome it. Sadly, however, it follows the same line as its predecessor, the Infrastructure (Financial Assistance) Bill, which we dealt with in this House just a few weeks ago. When that Bill was announced in the summer, the Government claimed it would unlock some £40 billion in new infrastructure development and a further £10 billion in housing investment. One of the Lords Ministers stated in July that there was £40 billion-worth of shovel-ready schemes ready to go by the autumn. We are well and truly into the autumn now, yet so far the Government have not been able to identify a single new scheme to benefit from that legislation.
In the final stages of consideration of that earlier Bill a couple of weeks ago, we asked about the success criteria and how the legislation’s performance would be measured. That question clearly flummoxed the Minister responding to the debate, who simply told us we would have to wait and see. After that experience, it is hardly surprising that Opposition Members—as well as a significant number of Government Members—are very sceptical indeed about the claims being made for this Bill, which appears to be simply a collection of disparate items put together for political effect, but with very little empirical evidence as to their ability to achieve the real investment in infrastructure that is needed.
We have read a lot over the past few days about the need for more infrastructure investment. We have heard that from the Mayor of London: he specifically said that the Government are going slow on infrastructure investment. He has also called for a speeding up of the consideration of the need for more aviation runway capacity in the south-east. I agree with that. The hon. Member for Bury St Edmunds (Mr Ruffley) echoed that view in his contribution today, saying that our response to the need for investment in aviation infrastructure was inadequate and that addressing that need should be a priority. They and the rest of us will look in vain for anything in this Bill to help accelerate the glacial pace of the Davies commission on aviation capacity. That commission has clearly been set up by this Government for “long-grass purposes”—in order to kick the issue into touch until after the general election. The same Government have introduced this Bill, saying it is about speeding up infrastructure investment. There is a clear inherent conflict between the Government’s stated objective of stimulating infrastructure investment and what they are actually doing.
Clause 1 has received a lot of attention. It can be summarised as the “blame it all on planning” clause. Two and a half years ago the incoming Government said that the old system they inherited—the top-down, centralist system—was the problem and that they would tear it up and replace it with a new localist planning system. At the time a number of us advised them that introducing such radical change was not the best way to achieve improved confidence at a time when confidence was vital to stimulate the economy and that what they were doing risked having a catastrophic effect on planning consents. The current figures show the parlous situation in development. We have only to look at housing investment in recent years to see what a bad state we are in and how the changes that were made to the planning system a year ago have not improved things, but have, in many ways, made them worse.
Let us consider the housing supply figures. I was astonished to hear the Secretary of State say in his opening speech that the number of affordable homes being built was increasing, because the figures show exactly the opposite. The most recent National House-Building Council report states:
“The affordable housing sector continues to show a poorer performance than the private sector. Housing starts for the three months to the end of September 2012 from NHBC were 32.8% below the same period in 2011.”
When combined with the private sector, the reduction was 10.6% compared with last year. The combined housing starts are down by 10%, therefore, and the affordable housing starts are down by 32%, yet the Secretary of State claims things are getting better. They are not; they are getting very much worse, and this Government’s policies have been damaging.
It would be nice to hear the Government express a degree of remorse for their mistakes and a willingness to consider changes that would improve things, but I do not see very much evidence of that. Instead, it is being suggested that powers should be taken away from local authorities and given to the Planning Inspectorate in order to speed up both infrastructure and housing development.
When we probed the Secretary of State on the criteria that will be applied to defining which authorities may have their planning powers removed and their cases referred directly to the Planning Inspectorate, we were not given a very clear response. When the planning Minister, the hon. Member for Grantham and Stamford (Nick Boles), gave evidence to the Communities and Local Government Committee, he highlighted two criteria: the number of times the Planning Inspectorate had overturned an authority’s decision on appeal, and the speed with which authorities deal with planning applications. So, like my right hon. Friend the shadow Secretary of State, who gave an excellent speech and a forensic demolition of the Bill, I looked at Planning magazine. It has produced a helpful table showing authorities that might fall into the category of being tardy in dealing with applications or having a disproportionate number of their cases overturned on appeal. Could I find Hackney listed—the one authority the Secretary of State identified? Yes, it was there, but only at the very bottom of one of the three lists—it was in only one of the three. It was the 21st—out of 25—lowest scoring English councils for determining all applications within 26 weeks. That is not exactly the kind of criterion that would lead one to assume that it deserves to be singled out for having powers stripped away from it. By contrast, Stratford-on-Avon, Torbay and Kensington and Chelsea all feature much higher up the lists, and all are in two out of three of the lists.
I am pleased that you are in the Chair, Mr Hoyle, rather than the Deputy Speaker who preceded you, because I see that the hapless Ribble Valley is the only authority in the country to appear in all three lists. It would therefore appear to be high in the pecking order of authorities likely to have their planning powers taken away from them, if the Minister’s criteria, as defined to the Select Committee, are applied in practice. I have to say that a lot of councillors in a lot of authorities all over the country will be extremely nervous as to how this power will be applied, given the lack of clarity and given what the evidence suggests about where weaknesses and failures have been.
Grahame M. Morris
I wonder whether my right hon. Friend will excuse my ignorance of geography and who has political control. Will he identify who has political control of the local authorities he cited?
Mr Raynsford
I am grateful to my hon. Friend for his question. I think he will be able to guess that Stratford-on-Avon, Kensington and Chelsea, Torbay and Ribble Valley all have Conservative-controlled authorities. I was not making a political point; I was simply observing the bizarre nature of the criteria that the Government appear to be operating in determining which authorities will have their planning powers stripped away from them and their cases referred to the Planning Inspectorate.
On the renegotiation of section 106 agreements, we again see a bizarre set of proposals that do not appear to have a sensible rationale and could have very perverse consequences. My experience—I do talk to a lot of people involved in the development of housing schemes—is that most local authorities are now being perfectly practical and pragmatic about renegotiating with developers where they believe that the affordable housing content in a section 106 agreement is genuinely a block to successful development. What local authorities are not doing is rolling over when developers come back insisting on having the entire affordable housing content stripped away. What is so crass about the Government’s action is that their clause will provide exactly the incentive to developers to say to local authorities, “We are going to get powers to overrule you, so we expect you now to roll over and not to require the affordable housing content in this scheme any longer.”
Bill Esterson
My right hon. Friend is making an incredibly important point about the effect of the change on section 106. He has vast experience, so will he explain just what the impact of this change will be, given that there is already evidence, some of which I provided in my speech, of authorities having sensible negotiations? What does he think the difference will be? What damage will be done?
Mr Raynsford
I fear that the consequence will be to embolden developers who simply want to ditch section 106 obligations to try to bamboozle or bludgeon local authorities, which are not confident about what will happen, into agreeing far fewer section 106 obligations, or possibly none at all. That would be very unfortunate, at a time when we all recognise that the affordable housing output is woefully inadequate and we ought to be doing everything possible to encourage more affordable housing. I fear that the whole effect of this provision will not be what the Government say it will be and that it will be the opposite: it will discourage the provision of affordable housing, which is really needed.
Finally, I wish to discuss the postponement of the business rate revaluation. That is the classic case of a piece of short-term political opportunism that could have serious, adverse, long-term consequences. Revaluations should be conducted free of political interference. They should be conducted on a regular basis, which businesses should be able to forecast. Businesses should not be nervous that the revaluation times will be changed to suit the convenience of any particular Government. We have been using a five-yearly cycle for business rates. The Ministers on the Front Bench would do well to think about the contrast with the arrangements for council tax. As there has been that unwillingness of politicians to have a regular cycle of updates—that applies to all three parties, because the Liberal Democrats went along with this Government in postponing any revaluation—we have the absurdity of council tax valuations based on notional 1991 values. What is being done by the Government risks going down that slippery path, which could well lead to a postponement, further postponement and ultimately a complete lack of confidence among the business community that there will be a proper, regular, stable and non-political basis for revaluation. This is a very dangerous move indeed.
This unfortunate Bill contains a rag-bag of ill thought out measures which certainly will not address the critical problem. It does not deserve the support of the House.
James Morris (Halesowen and Rowley Regis) (Con)
It is always a pleasure to follow the right hon. Member for Greenwich and Woolwich (Mr Raynsford), who has long experience of these matters and much expertise, and with whom I often profoundly disagree. I rise to support the Second Reading of the Bill, whose measures need to be set in the context of the Government’s wider reforms of planning, local economic development and infrastructure. We must be cautious about overplaying the ambition of the Bill.
On the broader picture, we need urgently to rebalance the British economy, to stimulate house building and to build infrastructure, particularly in areas such as the west midlands and the black country, part of which I represent. As other hon. Members have pointed out, over the past two and half years this Government have made significant progress on implementing localism—through the Localism Act 2011, their reforms to the planning system, the implementation of neighbourhood planning, and the publication of the national planning policy framework, which has radically simplified the amount of planning guidance that now drives the planning system in the UK.
Local planning authorities need to be more efficient in the speed with which they process planning applications. We need authorities to be more efficient to give clarity both to developers and to communities about decisions being made about their areas. It is right, despite the overblown rhetoric of Labour Members—
Bill Esterson
The hon. Gentleman mentioned planning departments, but he must recognise that his Government have made record cuts to the funding for local government, and not least the planning departments, many of which now have a fraction of the staff they had only two years ago. That must be one of the main reasons why planning departments are struggling so much. This Bill will do nothing to solve the problem without a reversal of those cuts.
James Morris
I do not accept the hon. Gentleman’s premise. Lots of other factors are leading to inefficiency in planning departments. It is not just about the number of people; it has more to do with inefficient processes and local bureaucracy than with the points that he is making.
It is right that the Government should seek to speed up the planning system, but as I mentioned to the new planning Minister in the recent Select Committee meeting, there are concerns about the criteria that will be used to determine whether a planning authority is failing to do its job. The Minister reassured me in his response that the effect of the changes would be imposed only on a limited number of local authorities.
It is true—the Government must take this on board—that we must be clear about the criteria and that they should be developed in close conjunction with the LGA and other interested parties. If we get the criteria right, other activities in local government, peer pressure and incentives for local planning authorities might result in improved performance across the board without our having to take the measures proposed in the Bill. I hope that the LGA, working with the Government, will be able to raise the performance of planning authorities without those measures being necessary. We need to be careful to avoid central prescription and to get the criteria right.
I do not think that anybody on the Government Benches is claiming that somehow creating the perfect planning system will mean that house building or new infrastructure will increase or that we will all move on into a wonderful world of economic growth. I do not think anybody is claiming that; it is being put up as a straw man by the Opposition. We all accept that planning is not necessarily a total obstacle to growth, and it is not the only reason we have stalled development.
As other hon. Members have pointed out, developers are sitting on banks of permissions that they have held for some time, and legitimate concerns about the commercial viability of those permissions are preventing them from taking the necessary action to move forward with projects that would benefit the community. It is therefore right for the Bill to seek to modify section 106 schemes and to give freedom for renegotiation when it is clear that such schemes are stalled because they are preventing developers from moving forward with viable commercial schemes. It is right, but we should not see that measure as a panacea or in isolation from the other policies the Government are pursuing, as we must, to stimulate house building and development, to provide guarantees or to explore other options. For example, the hon. Member for Sefton Central (Bill Esterson) spoke about the need to consider other ways to stimulate and get other private capital into the housing market. There are other things we need to do, and the modification of section 106 agreements is not a panacea, but it is right that we consider commercial viability—it is an important issue that the Government need to address.
The Bill contains provisions on infrastructure, and I think we all accept that in this country we have been very bad historically at getting large infrastructure developed quickly. We urgently need to upgrade our energy and transport infrastructure to meet the challenges of a modern economy and a globalised world. The Bill contains some important simplification measures, on which there would probably be cross-party agreement, to remove overlapping consents, and we must do that to free up the planning system. The principle behind our approach to infrastructure development should be that we need a streamlined system so that we can develop the vital infrastructure we need within years, not decades. The measures that tidy up confused complementary consents will contribute to that.
The Bill introduces important simplification and deregulation of the planning system. Taken with other Government measures, it will make a significant contribution to the Government’s broader objectives, which we are pursuing through a number of Bills and other measures, of rebalancing the economy away from London and the south-east and promoting development in the regions—including the west midlands and the north-west, which have lagged behind for too many years. We must do all we can to free up the system so that we can upgrade our transport and energy infrastructure quickly and so that we have a streamlined system for dealing with major infrastructure projects that gives a clear line of sight for the future.
We must address the clogged-up nature of the planning system, and the Government have already done that through our reforms. We must ensure that if planning authorities are not performing properly, they can reach the right performance levels. We must also ensure that we get timely decisions. That, combined with other measures, will help to ensure that we build more homes, which we desperately need in this country. The Bill, along with other recent announcements and the Government’s general direction of travel, will make a significant contribution to achieving those objectives.
Grahame M. Morris (Easington) (Lab)
I am pleased to follow the hon. Member for Halesowen and Rowley Regis (James Morris) and I want to make a few points about clauses 5, 21 and 23. I am pleased that the planning Minister is back in his place, because I would be interested to hear how clause 21, in particular, will apply in certain local circumstances.
Although Opposition and Government Members are in favour of measures that will encourage growth and infrastructure, we have a saying about selling something that is inherently unfit for purpose. It goes something like this: a fishmonger would never be heard shouting, “Rotten fish for sale”. I do not know whether other hon. Members have that saying—I do not know whether it comes from Grimsby, or Hull—but after my right hon. Friend the Member for Leeds Central (Hilary Benn) had comprehensively demolished the Government’s position in his opening speech, I felt that the Bill had a distinctly fishy smell. The more I have heard from Members on both sides of the House, including Government Members, the more my suspicions have been confirmed.
As the economy is showing signs that it is out of the longest double-dip recession since the 1950s, Government Members are perhaps being a little complacent. There is little comfort in that for those I represent in Easington who have lost their jobs. The claimant count in Easington has gone up by 800 since the coalition took power. There will also be little comfort for those who have seen their public services cut. Durham county council, my local authority, has undergone spending cuts of nearly £200 million, equivalent to 40% of its 2010 budget. There will be little comfort for those families struggling to cope with tax rises and benefit cuts while top-rate income tax earners receive a tax break. Indeed, the increase in jobseeker’s allowance claimants is just the tip of the iceberg. Figures provided to me by Durham county council that come from a study by Sheffield Hallam university show that worklessness in Easington is up 3,292 since last year—a worklessness rate of nearly 20% of the working-age population.
No constituency in the country requires more stimulus for growth and infrastructure than mine. Some potential projects are in the pipeline—such as Dalton Park and the centre of creative excellence, which is a transformative project for a brighter future in Easington—but for those projects to progress we need Ministers to recognise that sector-specific support is required, and I want to return to that if I have a chance a little later.
The problem that we have in the north-east is a lack of investment. The Government have succeeded in stripping away demand and jobs from the local economy, with job losses in my constituency at Dewhurst, Caterpillar and JJB Sports, as well as the closure of Cumbrian Seafoods in recent months. Those job losses are considerably higher than those at Ford in Southampton that have attracted such national publicity.
The Government are failing to invest in Britain, and they are failing to invest in the north-east in particular. Analysis by the Institute for Public Policy Research North shows that almost half of major transport projects that involve public funds benefit only London and the south-east and account for 84% of planned spending, compared with 6% for the north and only 0.4% for the north-east. That is quite an incredible figure. The IPPR North analysis shows that transport spending in London is an astronomical £2,731 per head, compared with just £5 per head in the north-east, and people say that there is no such thing as a north-south divide.
What is the justification for such skewed infrastructure spending, which only reinforces and widens the north-south divide? The lack of spending is restricting growth in the north-east, and the Government’s policies of austerity have taken demand out of the local economy, so undermining jobs and growth, especially in my constituency.
In my view, the Government must go further and faster in delivering major infrastructure projects in the north-east and increase current funding. Obviously, building new and more affordable homes is part of that. Concerns have been expressed, which have been alluded to, by David Orr, the chief executive of the National Housing Federation, about the consequences of the abolition of section 106, which could lose the country 35,000 affordable homes a year. Members have said that it is a good thing to renegotiate section 106 agreements. That may well be so, but it is possible to do that now. Indeed, many local authorities are involved in renegotiating section 106 agreements to meet local needs.
I do not believe that the planning system is failing. Figures have been referred to, but I remind Members that 87% of all planning applications are approved and the vast majority of applications—90%—are decided within 26 weeks. As my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) said, it seems that Conservative councils are the most underperforming in determining planning applications in a timely fashion. The Government must be free to look into the failings of any authority, but they should not misconstrue the exception as the rule. Indeed, if time limits are part of the criteria applied to judge performance, we should consider that, with major planning applications, 63% of the slowest 10% of councils are Conservative and that with all planning applications 50% of the slowest 10% of councils are Conservative. There is not really a case to suggest that Labour is dragging its feet in respect of timely considerations.
One of the affordable housing issues that I wanted to raise has already been covered, so I shall leave that. Although I feel that house building can boost the economy, it already employs more than 1 million people and accounts for 3% of our gross domestic product. Indeed, money spent on housing stays in the UK: 90% of the building materials used in the construction of houses are made in the UK. Few other sectors can support the UK economy to the same extent. It is estimated that each new home built creates one and a half full-time jobs directly and at least twice that number in the supply chain, so raising house building to the level of official projections could create 195,000 jobs directly and 400,000 in the supply chain.
One of the issues that I want to raise relates to the large-scale private sector developments that are ready to proceed in my constituency. I refer to a new retail development in Peterlee and the second phase of retail and mixed development in Dalton Park, near Murton. The reason for the delay is not that the local authority has held them up, but that spurious challenges have been made by a company called Praxis Holdings, despite the fact that the developments would be a major boost to the construction industry and could deliver 1,000 much-needed jobs in east Durham.
Sadly, I did not see any action or intervention from the Government to deter unscrupulous companies from delaying those developments. I am sorry that the Minister is not paying attention. I wonder whether clause 21 would make any difference. As one of his colleagues—a previous Local Government Minister—the hon. Member for Bromley and Chislehurst (Robert Neill) suggested, even if the Secretary of State were determining such applications, an objector would still have the right to use the judicial review process, which has held up one of the developments for more than a year.
A truly transformative project could revitalise east Durham: the centre of creative excellence. The scheme would involve a media park, including film, television, animation, music and digital media production, associated work space, leisure facilities, a multiplex cinema, a tourist hotel, educational facilities for digital media and executive and student housing. The planning permission has been extended because the project was delayed by the 2008 financial crisis, the loss of One North East, the abolition of Film UK and the loss of funding for the County Durham development company.
I hope that the Government will return confidence, demand and jobs to the east Durham economy, but we need a strong Government willing to seize the opportunity to provide sector-specific support for projects such as the Seaham centre of creative excellence, to realise private sector investment, jobs and training opportunities. Investment in my constituency, particularly in infrastructure, is necessary if we are to bring a new age of economic activity to former industrial areas. I hope that the Government will recognise that and, during the Bill’s subsequent stages, agree to appropriate amendments, including to clause 23 on employment rights, which is a retrograde measure.
Mark Pawsey (Rugby) (Con)
I am pleased to follow the hon. Member for Easington (Grahame M. Morris). One thing that he and I can agree on is the need to get our economy growing again. The recent growth statistics are, of course, encouraging, but there is plenty more to do. I welcome the Prime Minister’s direction to Cabinet Ministers, which he made in the early part of the parliamentary year, to prioritise growth. Our debate today focuses on the contribution to growth made by the Department for Communities and Local Government.
The Department made a great start with the national planning policy framework, bringing communities into the planning system through neighbourhood planning. I am delighted that in my constituency we have a frontrunner in the neighbourhood planning process. It is supported by a progressive local authority with a stronger bias towards growth, and by planners from Planning Aid. There are key ways we can get growth in our economy, and they include the development of housing and development within the built environment more generally.
I am conscious of the words of the previous Minister with responsibility for housing, who reminded us that for every 100,000 homes built, 1% is added to GDP. Supporting the private sector, in particular small businesses, is important. I am glad that since 2010, 1 million new private sector jobs have been created to rebalance the economy, but we need to do more to help small businesses. The Forum of Private Business points out that small businesses contribute 24.9% of the UK’s wealth—a quarter—and we must do all we can to encourage them to flourish.
I would like to speak on some of the proposals in the Bill, specifically those regarding section 106 agreements, speeding up the planning process and powers to the Secretary of State. I will then conclude with one or two remarks concerning omissions and missed opportunities. On section 106 agreements, it is unfortunate that the provision is necessary, but clearly agreements made five years ago at the height of a housing boom, at the height of the market, are often too onerous for a site to come forward for development. However, I have some concerns about the measures in the Bill.
Like hon. Members from all parts of the House, I support mixed communities. Section 106 agreements have enabled mixed communities to be built, and we are no longer developing large estates of one housing type. We now have mixed housing and that provides social interaction between residents, and communities work at their best when there is a mix of people. To listen to Opposition Members, however, it almost sounds as though they expect that every single section 106 agreement would need to be renegotiated. Of course, that is not the case at all. I draw the attention of hon. Members to a development that has just started in my constituency, the Eden Park housing development site, where 1,300 new homes are earmarked to be built. The infrastructure has just gone in and building has started. The site has a long-standing section 106 agreement to provide 40% affordable housing. That has not prevented the site from being developed, and nor should the requirement, or the opportunity, to renegotiate the section 106 agreement prevent future affordable housing development.
Will the Minister clarify when the power for local authorities to renegotiate will be introduced? Will there be a requirement on local authorities to renegotiate? As Members from all parts of the House have said, section 106 agreements are already regularly negotiated. They are a contract between the local planning authority and the developer. As with any form of contract, the terms can be varied by mutual agreement, but will there be any requirement for local planning authorities to renegotiate? What has stopped negotiation taking place up until now? Have some councils been unwilling to negotiate with developers, or have developers been put off approaching the local planning authority? I would like the Minister’s reassurance that, when a developer comes forward with a request to renegotiate a section 106 agreement, there will be an evidence base when making a determination. We heard about the issue of developers coming forward looking for a better deal. One concern I have is that that opportunity to come forward for a better deal may prevent some developers from going ahead with an existing section 106 agreement that is eminently deliverable.
Hon. Members have spoken about the Bill’s impact on speed. It is clearly important to speed up the system, but we must not forget that swifter planning is not necessarily the be-all and end-all. At times, we have to ask ourselves what is more important—good planning or fast planning. Speed is not everything and there are dangers that very quick decisions on planning may lead to bad development, and bad development will last for many generations.
It is the people with homes in areas where bad planning has taken place who have to live with the consequences. If we get development wrong, it helps nobody: it does not help the residents and it will not help the taxpayer, because years down the line poor development will need rebuilding. The Communities and Local Government Committee went to Manchester and saw the redevelopment of a site that itself was redeveloped in the 1970s, when tower blocks had replaced more conventional housing. It was not successful, however, and they were demolished and replaced with more conventional housing.
People’s attitudes towards development are influenced by the quality of previous developments. That is a further reason for getting the planning decisions right, rather than necessarily speedily. If we want people to respond positively to development, they need to be able to picture good development, rather than bad development. Too often, when development proposals come forward, people picture bad development, which leads to an instinctive reaction to oppose, rather than support.
Mr Robin Walker (Worcester) (Con)
I agree with my hon. Friend about the importance of good development. Does he also agree that local ownership of development is vital, and would he join me therefore in urging the Government to lay to rest the last ghostly vestiges of the previous Government’s terrible regional spatial strategies?
Mark Pawsey
Absolutely. My hon. Friend will have heard my remarks about localism and neighbourhood planning. By engaging people in the planning system and letting them have a say, we will get a much more positive attitude towards development.
Members across the House have drawn attention to the danger of the Secretary of State’s planning permission powers conflicting with the Government’s localism agenda. I hope again that he will not need to use these powers regularly. Businesses, developers and applicants know which local authorities are the poor performers. Many developers have some great schemes but choose not to bring them forward because they are concerned about a particular council’s approach. They would rather put in their applications where they are more likely to get a positive response from the local authority. I draw the House’s attention to my local authority, Rugby borough council, which is a progressive council with a strong approach to development.
On an idea that is not in the Bill, I ask the Minister to turn his attention to the thoughts of the Royal Town Planning Institute. Could designation be used positively? If we are to penalise badly performing local planning authorities by taking powers away from them and giving them to the Secretary of State, could the converse not apply, whereby authorities that perform consistently well, such as my authority in Rugby, have the incentive of additional powers being granted to them? My local authority could achieve even greater things with additional powers. Rugby council knows what it can do. I look forward to hearing the Minister’s views on that.
Clause 22 deals with business rates. From my experience of running a business, I know that business rates are the third biggest bill facing businesses. I heard with interest the Secretary of State’s remarks about the multiplier and how the take from business rates nationally will need to be the same, whether or not a revaluation takes place. I just wonder, however, whether we might be better off sticking with the five-yearly review. How will businesses in my constituency benefit from putting off the revaluation till later rather than sooner?
The Bill does not address one aspect of the development process where value could be added. It concerns the statutory consultees and their power within the planning process. In recent months, I have been struck by the power that these bodies have in the planning application process. The Government’s own statutory paper on consultees in July named 23 bodies, including British Waterways, the Forestry Commission and the Highways Agency, that are consultees to the planning system and the views of which have to be sought before applications can be granted. I referred to a great success story in my constituency—a site for 1,300 homes—but another site for 6,000 is currently being held up not because of issues of the affordable housing criteria but because of the delays in getting in all the responses from the statutory consultees. This is red tape that could be cut. I would very much like to hear the Minister’s views on limiting the time that consultees have to respond. If a statutory consultee does not get his views in within a certain time frame, perhaps those views should carry less or even no weight. This is an area in which I would like to see powers restricted.
The second rates issue that is not addressed by the Bill is empty property rates. My hon. Friend the Member for Bromley and Chislehurst (Robert Neill) reminded us of the reliefs, but I am concerned that the issue of empty property rates is leading to a shortage of accommodation for our businesses. I started a business 30 years ago in very low-cost accommodation, which was surplus to the requirements of a large employer in my constituency. I would not be able to do that today because that building would have been demolished in order to avoid paying business rates on the empty building. Later in the life of my business, when we were doing well enough to move to larger premises, we moved to an industrial unit that had been built speculatively by a developer. That would not have been built today either, because nobody is building speculative industrial units for fear of them lying empty and attracting business rates. A concession on the part of the Treasury—I realise that it is a Treasury matter—in respect of empty property business rates would go some way to providing an incentive.
I support the vast majority of measures in the Bill and I look forward to the Minister’s response to the points that I have raised.
Martin Vickers (Cleethorpes) (Con)
If I said that I enthusiastically support the Bill, I would not want Ministers to run away with the idea that I do not have a few reservations about it, particularly the balance between local and national decision making, but on the whole it is a move in the right direction. Priorities vary, depending on circumstances. We are currently in a period of austerity and economic downturn. At such a time, the emphasis must be on freeing up the system to allow growth and jobs to develop. In times of plenty, we may look more to quality-of-life issues—the environment and so on—and give greater weight to them. At present for most households, particularly those in my constituency which have suffered a number of setbacks in recent months, what provides quality of life is a job. Therefore, the emphasis must be on allowing expansion to take place as quickly as possible, and this is reflected in the Bill.
Obviously there is a balance to be struck. Every constituency has varying circumstances. The demands of the planning system in the south-east are very different from those in my area. The demand in my area is for affordable housing, by which I mean housing that people on the average wage in my constituency, about £20,000 a year, can readily get a mortgage for or rent. I do not care where those houses come from—I do not mind whether they are private development, or whether the council or housing associations build them, but we must free up the system that allows those to develop.
The battle between localism and the centre that I mentioned is interesting. I spent 26 years as a local councillor railing against too much centralisation and calling for the emphasis to be on the local level. I recognise that it is a difficult balance to achieve and I note the emphasis that Lord Heseltine put in his report last week on devolving power to encourage local incentives and initiatives. I certainly support that. When I was on the local authority serving in the cabinet, my responsibilities included planning policy. In that respect, I was rather similar to the Minister; I could set policy but had to rely on the planning committee to implement it, and its ideas on a host of issues were different from mine. The Minister can issue as much planning guidance as he likes, but he must then rely on local planning authorities to interpret it in a positive way and use it to encourage growth and development. I sympathise with him in that respect.
It is a constant battle. As ward councillors, we are constantly urged to resist development, because that is usually what our constituents want us to do, but having served as a cabinet member in the administration—it was a very good administration, a Liberal Democrat and Conservative coalition fizzing with good ideas, just like the present Government—I recognise that there are other objectives beyond those that we might pursue when representing our local constituents.
It is absolutely necessary that we speed up the planning process, which even now is painfully slow. I know that from experience, because when I was a councillor I was constantly urging planners to improve the way they progressed applications, but of course they were held back to a considerable extent by having to consult Government agencies, such as the Environment Agency and Natural England, and all the organisations that seemed unable to work at the same speed as those with commercial demands who were looking to invest in the area. In many respects, certainly with regard to the Environment Agency—I am speaking from local knowledge—that has improved somewhat, but it is still painfully slow. We cannot have a situation in which someone comes along with a brilliant idea and has capital available to invest but then the process is delayed for years on end. It is just not acceptable. We must speed up the process as much as possible.
Equally, we must balance speeding up the planning process with local consultation and the right of individual planning committees to make decisions. Humberston and New Waltham ward in my constituency, like many across the country, is at present dealing with applications for around 2,500 houses that are unsustainable with regard to infrastructure. It is good to see that the Bill links growth and infrastructure, because too often we allow the growth but the infrastructure and local services lag too far behind.
As an aside, Humberston and New Waltham ward is also grappling with a planning application for an onshore wind turbine development. It is actually in the neighbouring constituency of my right hon. Friend the Member for Louth and Horncastle (Sir Peter Tapsell), but it would overlook my constituency and the tourist trade in Cleethorpes is strongly opposed to it. I welcome the comments the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes), made last week about onshore wind developments.
One development in my constituency highlights the problem of delays. Able UK is looking to develop an energy park in Killingholme on the Humber estuary that will develop offshore wind for the renewables sector, which is very welcome. Its planning application has been grinding through the tortuous processes for years. More than 5,000 jobs are at stake, jobs that are urgently needed. Anything that can be done to free up the planning process for such developments must be welcome. On that point, I will take this opportunity to ask Ministers to pass on to ministerial colleagues the message that the A160 upgrade is essential and part of what is needed to allow Able UK to develop the Killingholme site.
All in all, I very much welcome the Bill, although I add the caveat that there is a little too much drift towards centralisation, rather than localism. However, I will certainly be supporting it in the Lobby.
Peter Aldous (Waveney) (Con)
It is a pleasure to follow my hon. Friend the Member for Cleethorpes (Martin Vickers).
I welcome the direction of travel under this Bill. I support its objectives of boosting investment in infrastructure, cutting the red tape that delays and discourages business investment, and helping support local growth and local jobs. It is important that the red tape that has hampered the roll-out of superfast broadband is removed, that we kick-start building on school sites, and that we have a swifter planning system for local residents and local businesses.
I believe, however, that one aspect of the Bill needs further scrutiny and consideration, namely the proposal to postpone the business rates revaluation until 2017. I urge the Government to consider this proposal carefully in Committee and, if the evidence supports the case for amending it, I urge them to do so. I reached that conclusion wearing two hats: the first as an MP representing a constituency where I fear many businesses may be disadvantaged by the postponement of the review, and the second as a chartered surveyor. Having practised for 27 years, I would not say that I am an expert on business rates, which is a specialist field, but I have carried out business rates valuations and done appeals.
I am concerned for a variety of reasons. First, I question whether the proposal is actually based on up-to-date research. The Valuation Office Agency’s research shows that, if the review goes ahead, 800,000 premises will see a real-terms rise in rates, while only 300,000 will see their bills fall. However, I am mindful of the views of Gerald Eve, one of the leading private practice firms in the specialist field of rates, which disputes the VOA’s findings and has carried out its own research, which reaches a different conclusion. Other surveyors are also concerned that the reasons for the delay are based on draft and incomplete data.
Secondly, I question the merit of keeping a rating list based on the rental values that prevailed in April 2008, when the property market was at an artificial and unsustainable peak. There is a concern that postponing the review will lead to the rates of retailers in particular being based on incorrect and historical values for far longer than they should be. The postponement may cause short-term injustices and store up bigger problems for when the next review eventually takes place.
Ben Gummer (Ipswich) (Con)
My hon. Friend is making an interesting point. Is it not also true that since 2008 there have been rapid changes in the retail market? For instance, Tesco has reduced the size of its stores, there are larger warehouses and there has been a change in the rateable value of buildings across the scale. That has nothing to do with the recession and is an argument for a change to the way in which we value business properties, which is surely something for another term and another Parliament.
Peter Aldous
My hon. Friend and fellow Suffolk MP makes an extremely useful point. I was not going to cover it tonight, but the whole business rates approach to how we value business properties needs review. It is a dynamic, ever-changing world and, with the rise of the internet, property is less important in business generally. We need a fundamental review.
Mr Robin Walker
I support my hon. Friend’s contention that we need a fundamental review of the business rates revaluation system. Does he agree that the long backlog of outstanding cases with the VOA and the long delays in answering a number of appeals is another reason to look at this whole area?
Peter Aldous
I thank my hon. Friend for that intervention, with which I agree entirely. I will come on to that issue later and believe that it is placing a major burden on businesses. We need action not at another time and another place, but now. If we delay until 2017, changes in values will be far greater and create bigger swings in liabilities, which will be far more difficult for businesses to cope with.
This leads me on to the fact that any property tax requires frequent and regular revaluations to ensure its acceptability and fairness. The five-yearly reviews that have been in place for more than 20 years are well understood and provide a degree of certainty. A break in that precedent creates uncertainty. In future, people and businesses will not know for sure when or whether a review will take place. The reason for having regular reviews of the rating list is that property values, in relative terms, change over time. Rents in some sectors and in some locations will rise, while those in others will fall. It is important that the rating system has an in-built review structure that reflects the dynamic and ever-changing nature of the property marketplace. In this way we can be sure that the tax burden is spread fairly so that those with the broadest shoulders pay the most and those in more challenging locations and properties pay less. Liz Peace, chief executive of the British Property Federation, sums up the position well:
“A revaluation should shift the burden from those who are suffering to those who are prospering.”
There is a worry that the proposed freeze means that those in more lucrative locations will benefit and those in hard-hit areas will suffer.
I am particularly concerned about the possible effect of the postponement on the retail sector and on town centres. The Government have done a lot of good work in highlighting the problems faced by the high street and, working with Mary Portas, they are putting in place measures to tackle these challenges. Lowestoft in my constituency is a Portas pilot town, and the town team are setting about their work with relish and enthusiasm. It is important that those of us in this place provide the framework through which such work in towns across the country can come to fruition. I fear that the proposed postponement might undo this good work. In Lowestoft, prime rents fell by 40% between 2008 and 2012. It is important that rates are realistic and up to date so as to attract investment back into the town centre.
The retail sector pays a significant proportion of all business rates—more than a quarter, at 28%. On average, 14.6% of retail units across the country are vacant. This is due to a variety of reasons, one of which is high rates. Mary Portas has said that high rates are a deterrent to investment in town centres. It needs to be remembered that the retail sector is the UK’s biggest private sector employer, providing crucial jobs to 1 million people in the 16-to-24 age group. There is great concern that another hike in rates will lead to fewer chances of jobs, result in less investment in the fabric of our town centres, and create a more troubled high street.
Finally, I turn to the backlog of rates appeals, which are placing a brake on private sector investment and are a significant strain on the finances of businesses. It is estimated that there are 241,710 appeals outstanding against the 2010 list, and this equates to £1.8 billion owed to business. The number of appeals being carried out at the end of the second year of the 2010 list is 74% higher compared with the same point in the 2005 list. Improved systems and processes must be put in place to clear the backlog and to ensure that the problem does not recur. An uncalled-for and significant burden is being placed on businesses in difficult times, and it must be removed with full haste. Businesses must not shoulder unnecessary burdens as a result of these bureaucratic hold-ups within public bodies.
I support the direction of travel of the Bill and I shall vote for it this evening. However, the proposal to postpone the rates review requires further scrutiny to ensure that it does not have unintended consequences for, and a negative impact on, many businesses across the country. The evidence on which the proposal has been made should be published and scrutinised as soon as possible, and it needs to be very carefully considered in Committee.
Mr Dominic Raab (Esher and Walton) (Con)
It is a pleasure to follow my hon. Friend the Member for Waveney (Peter Aldous); like him, I welcome the overall thrust of the Bill.
Although the economy has been making significant progress in difficult conditions, we have heard little about the wider economic backdrop to the measures in the Bill, so I shall touch on that at the start of my remarks. We need to build on that incremental progress, and although it goes without saying that Members on this side of the House are not for a second complacent, we ought not to stifle or muffle the fact that we are back to growth, despite the debt hangover inherited from the previous Government. Jobs have been created, net, in each of the past six months, pushing unemployment below 8%. Inflation is half its high of last year, and we are net exporters of cars for the first time since 1976. Although the eurozone market remains stagnant, UK exports to China have doubled since 2010.
The previous Government’s irresponsible approach to spending and their blunt over-regulation got us into this mess, and as the current Government recognise, it will take the dynamism of the private sector to get us out. The Bill is based on that broad template, and to that extent I welcome it. We must not, however, lose sight for a second of the context and scale of the challenges that we face, and the Bill needs to be viewed in that broader light. Those challenges include what I shall refer to as a triangular crossfire of Government and household debt, both of which are around 80% of GDP, not to mention UK banking liability—the third prong in that crossfire—at more than 400% of GDP. This last issue is one of the major factors hurting the construction sector, which the Bill aims, in part, to try to revive.
Banking liabilities are one reason the coalition’s banking reforms are so vital: we must ensure that the taxpayer never again has to bail out the banks. It is also vital to stick to our plans for Government debt to be falling by the end of this Parliament, and if further measures are required, we must show the resolve to find savings in spending, not hike up taxes that stifle growth.
As this country pays down its debts, we must also repair the frayed fabric of our underlying economic competitiveness. That is where our long-term prosperity lies, and the Bill targets that key priority area. We also, of course, require short-term dynamism to get us out of the rut we are in. Under the previous Government, Britain fell from fourth to 13th in the World Economic Forum international competitiveness rankings. It is good to see it climb back to eighth place, but that is not enough. We must be back at the top if we are to deliver the economic cutting edge to thrive in an intensely competitive global century, create opportunities for our youngsters, and deliver the revenue to pay for our precious public services.
A lot has been made of the regulatory burden facing business in this country, and the Bill is in part a response to that problem, albeit—in fairness—just one element of it. A recent report by the World Bank and International Finance Corporation, “Doing Business 2013”, provides a broader context for the regulatory challenges facing small and medium-sized enterprises that do business in Britain. It compares 185 economies and ranks Britain seventh for ease of doing business.
On the face of it, the report contains some real positives. Believe it or not, Britain comes top for credit facilities—not to be confused with the actual availability of credit funds. It also scores highly for export regulation, easing international trade. On the other hand, it still takes 13 days to set up a business in Britain, which has not improved since 2009. That contrasts with countries such as New Zealand, Australia, Singapore and Canada, where a business can be set up in between one and five days. That is the global reality outside the Westminster village. The World Bank IFC survey also found that it had become harder to secure construction permits in this country—an issue the Bill is designed to address.
That is the broader context. The Bill is rightly not presented as a panacea or silver bullet for those broad and deep issues, but there is some good stuff in it. The drive to streamline counter-productive bureaucracy is clearly welcome—many hon. Members have spoken of that. I want an increase in affordable housing. The shortfall has created acute hardship for constituents throughout the country, but certainly in my part of the world, where house prices are very high. Notwithstanding that important priority, it must be right not to let unviable central targets stymie wider projects from proceeding if they have substantial economic merit.
We heard a lot of thunder and lightning from Opposition Members on the plans in the Bill to offer new employees the option of shares in their company in return for more flexible contracts, but the measure is an innovative attempt to grapple with the over-zealous employment regulation that was pushed through in recent years. That regulation has discouraged firms from hiring people who are, we should remember, left to languish among the ranks of the unemployed, especially the 20% youth unemployed, which was the level left by the previous Government despite 13 years of spending splurge.
We should remember that the plans build on important proposals in the Enterprise and Regulatory Reform Bill, which is in the other place and will return to the House shortly. They are designed to address the broader concerns of business red tape, including measures to filter spurious or vexatious employment tribunal claims, which I welcome.
As the World Bank IFC report testifies, far too much overweening regulation will still afflict small and medium-sized enterprises. Focusing further on that is likely to yield greater economic dividends for business and jobs growth than diluting key safeguards in the planning process—a concern that I hope parliamentary scrutiny will address. As hon. Members on both sides of the House have said, clauses 1 and 2 are essentially centralising measures that will allow developers, or give them scope, to sidestep local authorities that are deemed to be poor performers. We need to do everything possible to drive economic growth, but, given the wider context and the debt problems to which I have referred, I suspect the planning process is only a small part of the problem in the construction sector. The clauses pose a risk to local democracy. The Bill states that the criteria for designating councils as poor performers will be published by the Secretary of State. In the absence of those published criteria, what assurance is there that the legitimate views of communities—represented faithfully by their locally elected representatives—will not be trumped by developers in some form of collusion with Whitehall?
Clauses 12 and 13 seek to alter the delicate balance between community interests in registering village greens and the property rights of landowners. For all the furore and froth generated by the measures, it is a finely balanced area of policy on a niche matter. What evidence does the Minister have to hand on the scale of the vexatious applications to register land as village greens? What is the size of the problem that the Bill is designed to filter out? Has an economic value been placed on it? Has he considered alternative proposals? I note that the Open Spaces Society proposes changes to the guidelines rather than primary legislation. Those proposals would help to streamline the current procedure, scrutinise applications more strictly and encourage mediation between developers and applicants. What consideration has been given to those milder and more modest proposals?
More generally, I am concerned that the Government’s wider planning proposals to expedite home extensions and related applications risk creating tension among neighbours as well as eroding local democracy, again with only minor countervailing economic benefits. Perhaps the Minister can reassure me that the benefits will be larger than they appear to be in the Bill.
Other hon. Members have described in detail clause 22, which postpones the revaluation of business rates. I understand the rationale for the measure and I listened carefully to the Secretary of State, but Ministers will be aware that the British Chambers of Commerce has expressed concern that it will hurt rather than help the many businesses that pay rates on the values established at the peak of the market in 2008. When I talk to local businesses in Elmbridge, the point they make to me almost uniformly—in goose step, as it were—is that they pay more and more after the creeping increases in business rates over the years, but get less and less back, because of the central funding formula, which is set in Whitehall. I pose the question: if we really want to help the retail sector, why not look at making savings in spending to cut business rates? I have looked at how we might do that in a number of pamphlets I have written, because in truth that would be the shot in the arm for small businesses and the high street, promoting business expansion as well as jobs growth.
The Government are rightly in the business of introducing targeted measures to build on the positive signs we are starting to see in the economy. There are a range of welcome measures in the Bill, along with some creases that we will need to iron out. I hope the Minister will engage closely and seriously to ensure that we focus our efforts on the right targets as the Bill proceeds through the House.
Ian Murray (Edinburgh South) (Lab)
May I start by congratulating the new Minister, the right hon. Member for Sevenoaks (Michael Fallon)? I believe this is the first time for 20 years that he has been back at the Dispatch Box, so we look forward to his contribution. Unfortunately I will not be able to compare it with his last contribution—I am afraid we were not allowed to watch television at school.
I pay warm tribute to my right hon. Friend the Member for Leeds Central (Hilary Benn). He completely disembowelled the Government’s case for the Bill in forensic detail, which was very pleasing indeed to watch. He was not the only one who pulled the Bill apart; he was joined by the Liberal Democrat Members for Cheltenham (Martin Horwood) and for Mid Dorset and North Poole (Annette Brooke). I look forward to them joining us later in the Lobby.
Today’s debate has been important. We meet only weeks since the Third Reading of the Government’s Enterprise and Regulatory Reform Bill, which they heralded as their flagship for growth. Indeed, the Secretary of State for Business, Innovation and Skills said that the measures in that Bill would
“help make Britain one of the most enterprise-friendly countries in the world.”
It feels very much like Groundhog day: another week, another flagship Bill that the Government insist will drive the recovery and our economy. However, this Bill is a knee-jerk and shambolic reaction by the Government to their summer panic over the lack of growth and their response to the failure of the Enterprise and Regulatory Reform Bill, with its rag-bag of measures labelled as “growth”—as my hon. Friend the Member for Easington (Grahame M. Morris) put it, the Secretary of State was trying to sell this Bill like a fishmonger shouting, “Please buy my rotten fish.” As with the Enterprise and Regulatory Reform Bill, this Bill shows again that the Government have all the wrong priorities. They are consistent, though—promoting measures with no evidence to underpin them, with no consultation responses to guide them and not much support from anyone to add force to them. I have been eagerly awaiting the Government’s evidence in this debate, but I have yet to hear it.
We may finally be returning to some economic growth from this Government, but as the Prime Minister himself said earlier this year:
“If you could legislate your way to growth, obviously we would. The truth is you can’t.”
He is right. Calling this a “growth” Bill does not make it so. There is nothing in the Bill to address the root causes of the Government’s economic failure, or indeed the housing crisis. Instead, there are a number of ways in which the Bill could damage the planning system, housing delivery and local communities, as my right hon. and hon. Friends have pointed out. Even the construction industry has said that there is no point in this Bill. It was revealed over the summer that 60% of construction industry leaders who were surveyed said that the main deterrent to investing in infrastructure was a
“lack of clarity from the government”.
This Bill will only compound that uncertainty, as the construction sector continues to shrink. That is a very worrying trend, which has sparked fears that the construction sector will lose much capacity in the longer term. However, I repeat: the Bill does nothing to address the root causes of the catastrophic downturn in construction. The key point is that builders are not building because banks are not lending and people are unable to borrow and buy. Mortgage lending fell again this month, with 6% fewer people securing mortgages than in the previous month and half as many as in what would be termed a normal year.
Whatever happened to the Government’s much vaunted localism agenda? Again, I refer the House to the super contributions by the hon. Members for Cheltenham and for Mid Dorset and North Poole, who have said that they are against the centralism agenda in this Bill. This is the Government who came to power on promises of returning power to local people. In fact, one pre-election policy green paper stated:
“Localism holds the key to economic, social and political success in the future,”
but in this Bill, for “localism” replace with “centralisation”.
The Bill’s focus on planning is misguided and the measures will not tackle the real barriers to growth. That assertion is backed by research—not that the Government ever use research or evidence—that shows two things. First, there is a building backlog of 400,000 new homes that have planning permission but have yet to be built by developers. Secondly, approval for residential and commercial applications is at a record 10-year high, with 87% of such applications being approved in 2011-12. The hon. Member for Bury St Edmunds (Mr Ruffley) mentioned commercial development earlier.
The Bill suggests that the only way to support recovery is to centralise the planning system. Clause 1 would enable developers to ask for their applications to be decided by the Secretary of State when a local authority has been designated as having been stripped of its planning status. This is where we come to the Secretary of State’s bombshell. He professed earlier that Hackney was the worst-performing authority in the country, but he could not say whether it would be designated for these purposes or what criteria would be used to determine whether it should lose its planning status.
According to Hackney’s figures for the past year, 42% of applications were determined within 13 weeks, with 80% of minor applications being dealt with in eight weeks. Of the 59 planning appeals, 17—or 31%—were allowed. Let us compare that with the figures from the Minister of State’s own local authority, Sevenoaks. There, 62% of applications were determined within 13 weeks, but less than 74% of minor applications—fewer than in Hackney—were determined in eight weeks, and 35% of planning appeals were allowed. Simply by comparing Hackney with the Minister’s own council shows us that it is above the average in this regard.
I therefore challenge the Secretary of State to tell the House whether the average is now to be determined as the worst. Will the 200 or so authorities that are below the average be designated as failing, and if so how will their planning powers be removed? I suggest that Members on the Government Benches look at the tables that have been produced and, as my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt) encouraged them to ask, the Secretary of State whether they will be worse off or better off than Hackney. If Hackney is indeed the worst, their own local authorities could be under the control of the Secretary of State very soon indeed.
There would also be no right of appeal if the Secretary of State were to take charge of such local authorities. I wonder whether he is familiar with the decision by the First Minister of Scotland to call in a planning decision for the first time in the Scottish Parliament’s history, following what was seen as the wrong judgment being made by the democratically elected planning committee in Aberdeen. This of course involved the Trump golf course development on the shore near Aberdeen, and it was an example of centralisation over proper local accountability. The hon. Member for Mid Dorset and North Poole, the right hon. Member for Arundel and South Downs (Nick Herbert) and my hon. Friend the Member for North Tyneside (Mrs Glindon) have all said today that the Local Government Association believes the Bill to be a blow for local democracy.
We know that Ministers dropped Labour’s ambitious plans to establish universal broadband for all by the end of 2012. We now have chaos and incompetence at the heart of the Government over plans for this major piece of infrastructure that could drive growth in this country. The Bill’s measures on broadband will result in a free-for-all of building in areas of outstanding natural beauty. They will not drive the economic growth that we need. We support a more efficient planning regime, but the duty of the Secretary of State to “have regard” to natural parks is not what is holding back the roll-out of broadband in this country. We have seen no evidence to substantiate the claim that the “have regard” duty is an obstacle to broadband and mobile roll-out.
On the section 106 provisions, my hon. Friend the Member for Sefton Central (Bill Esterson) was right to mention the survey carried out by the shadow Secretary of State, my right hon. Friend the Member for Leeds Central, which showed that five times as many social homes for rent had been built in Labour authorities than had been built in Conservative ones. It has been estimated that some 50% of affordable housing is delivered through section 106 agreements, which oblige developers to make a contribution to community benefits as a condition of receiving their planning approval. So why have the Government singled out affordable housing contributions as the most disposable of the many section 106 categories? Getting rid of these will simply mean fewer affordable homes at a time when more are needed. [Interruption.] I hear a sedentary intervention from the Treasury Bench, saying that this is not correct, but let us listen to David Orr—I know that some of my right hon. Friend and hon. Friends have already mentioned his quote—the chief executive of the National Housing Federation. He warned that the abolition of section 106 would
“wipe out at a stroke 35,000 affordable homes a year”.
I am more likely to believe the chief executive of the National Housing Federation than the Government, who have come forward with proposals on the basis of no evidence whatever.
It is also the case that a strong section 106 agreement helps to reduce land values, which is part of the problem in this country when it comes to development. There is absolutely no evidence to support the Prime Minister’s claim that there are a significant number of sites that have planning permission but are not going ahead because there are too many obligations to build council homes.
Neil Carmichael (Stroud) (Con)
That was an incredible list of gloom-laden points, but what does the shadow Minister make of the Centre for Economics and Business Research when it points out that next year and the year after Britain will be notching up the highest level of growth in the European area?
Ian Murray
Given the current state of the economy, the hon. Gentleman should be a little more contrite when it comes to economic growth. I only hope that those remarks do not come back to haunt him when the effects of the Olympics are stripped out of growth in the next forecast. We all want to see growth in this country, but we need to wait and see what happens. As I was saying, the Prime Minister’s claim is not supported by the evidence in front of us.
Let me move on to what I think is the worst part of the Bill—shares for rights, or, more accurately, rights for peanuts. This part of the Bill introduces the new concept of an employee owner, but not one Government Member has raised this issue during the debate. I think that perhaps says it all and reflects the debate we had on Third Reading of the Enterprise and Regulatory Reform Bill. On the Opposition side, we are strongly in favour of employee ownership, but coupling it with slashing employment rights is contradictory and counter-productive.
Doing away with people’s rights at work is wrong in principle and will do nothing for economic growth. The Employee Ownership Association has pointed out that boosting employee ownership
“does not require the dilution of rights”.
The Chancellor heralded this as an attempt to create a flexible work force, which is ironic given that taking up the shares for rights scheme will mean giving up on flexibility in the sense of flexible working. We must emphasise time and time again that the UK already has the third most flexible employment regime in the OECD—even before the measures passed on Third Reading of the Enterprise and Regulatory Reform Bill last week. This has nothing to do with flexibility; it will simply allow employers to fire at will.
We oppose these measures, not just because they are bad for employees, but crucially because they are bad for business. As Justin King of Sainsbury’s has said, these proposals are likely further to damage the already fragile reputation of business. He said:
“What do you think the population at large will think of businesses that want to trade employment rights for money?”
Any employee who signs up to the scheme will effectively allow the employer to operate a compensated no-fault dismissal scheme of the type proposed by Adrian Beecroft which, apparently, is so fiercely resisted by the Secretary of State for Business, Innovation and Skills. Simon Caulkin, a writer on management and business, said:
“In effect, Osborne’s cobbled-together scheme is a back-door re-run of the agenda of Adrian Beecroft”.
Paul Callaghan, partner in the employment team at Taylor Wessing, went further when he said:
“This makes Adrian Beecroft’s fire at will proposals look moderate.”
There is absolutely no evidence to back up these proposals. Being offered as little as £2,000 in shares to give up entitlements to redundancy payments, training, unfair dismissal and some maternity provisions is bad enough, but how can the Government claim to be the most family-friendly ever, when the right to request flexible working hours, which might be helpful for child care and parental employment prospects, is also included in the Bill?
Mel Stride (Central Devon) (Con)
Surely the whole point of an employee share scheme is that it is voluntary and optional. Is it not rather patronising of the hon. Gentleman to suggest that those in employment are incapable of exercising such a choice?
Ian Murray
Let me make three points in answer to that question. First, this applies to new jobs. Secondly, there would be nothing to prevent an employer from sacking all the work force and then taking them on again with new contracts. Thirdly, how can the scheme be voluntary if the job is conditional on people signing up to one of those contracts?
Sarah Jackson, chief executive of Working Families, has said:
“Employers beware. Offering owner employee contracts—where employees effectively sell their employment rights for shares—is unlikely to deliver the highly motivated, engaged workforce you need.
Few men or women with family responsibilities would want such a contract”.
Mel Stride
I thank the hon. Gentleman for giving way again. If the scheme is not voluntary, can he explain exactly who will be forced to take part in it?
Ian Murray
I suspect that we shall see two developments. We shall probably see an advertisement for employee ownership contracts in the first instance, and we shall probably see unscrupulous employers offering contracts on an employee-ownership basis to people when they feel that it will not be in the best interests for those people to be on normal full-time contracts. [Interruption.] Ministers are shouting “You cannot answer the question” from a sedentary position. I should like the Minister of State to come to the Dispatch Box and give a cast-iron guarantee that not one employee in the country, either in or out of work, will be forced to accept one of these contracts. I can assure him that that will not be the case.
Ian Murray
I am running out of time, so I shall canter on, if I may.
There are so many unanswered questions that I should probably be here until midnight if I dealt with them in detail, but let me give a little of the flavour of what people have been saying to me. I hope that the Minister of State has had his pencil sharpened so that he can take all this down.
First, the value of shares that employees receive in return for relinquishing their rights is wholly inadequate. It may also be difficult in some instances for employees to value the shares accurately, or indeed to realise fair value in the event of sale. Those problems are all the more pronounced given the absence of provision for independent legal and financial advice for employees.
Secondly, the administrative costs of valuing and issuing or allotting small numbers of new shares to a great many employees may be prohibitively high for business. If there is no market, companies may have to purchase the shares back, which will impose a huge financial burden on them.
Thirdly, most of the businesses involved will not be listed. Who will value the shares, what voting rights will be attached to them, how can they be redeemed or transferred when they have no real market value, and who will deal with any disputes that arise?
Fourthly, at a time when an employee wishes to sell, on redundancy or otherwise, the company is likely to be performing poorly, which is why staff are being laid off. That means that the shares will be worth less, or indeed worthless. What happens if a business issues more shares to itself to dilute staff holdings prior to any redundancy? What about dilution in the event of further investment in the company?
Ian Murray
I will give way to the hon. Member for Warrington South (David Mowat), who was a member of the Committee considering the Enterprise and Regulatory Reform Bill.
David Mowat
I was indeed.
Every year, thousands of people who work for firms of lawyers and accountants give away all their employment rights by joining the partnership, thus taking a stake in the business. Why are Opposition Front Benchers opposed to the extension of that principle to ordinary people in ordinary companies?
Ian Murray
I think that there is a slight difference between people who take on a partnership in an accountancy firm and people who embark on training.
Fifthly, what will happen to PAYE and national insurance contributions? At present, any shares “in kind” would be subject to the usual Inland Revenue rules.
Ian Murray
I am afraid that I do not have time. [Interruption.] It is the Government who schedule these debates, not me. The hon. Gentleman should have a chat with the Government Whips Office.
Could such shares also be used for tax avoidance purposes when executives receive the maximum allocation and take full advantage of the corporation tax regime?
Sixthly, will the contracts be voluntary? Could an employer make it a condition of employment that they are signed? Could an entire work force be moved on to them? Could a post be advertised as an “employee only” vacancy?
The list is endless. This is a ragtag of a Bill and a ragtag of a proposal. The Chancellor proclaimed in his conference speech that the proposal represented
“owners, workers and the taxman”
—where have we heard this phrase before?—
“all in it together”.
In reality, the measure is divisive, it risks creating a two-tier labour market, and it flies in the face of the “one nation” approach that Opposition Members wish to see. Making it easier to fire people will not help economic recovery.
There is nothing in the Bill to address the root causes of the Government’s economic failure or housing crisis. Instead the Bill could damage in a number of ways the planning system, housing delivery, communities and relationships in the workplace. It is also clear that, although the Secretary of State for Business, Innovation and Skills is resisting the Beecroft fire-at-will agenda, it is alive and being delivered by his Department minders, who were brought in at the reshuffle to sort the Secretary of State out.
Like the Enterprise and Regulatory Reform Bill, this Bill is an ill thought through, incoherent, “make it up as you go along” mess of measures cobbled together by an increasingly desperate, out of touch Prime Minister and Chancellor. I look forward to Members joining us in the Lobby later.
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
I thank the hon. Member for Edinburgh South (Ian Murray) for the welcome he gave me, if not for drawing attention to the difference in our ages. As a former President said, I was not going to make an issue of his youth and inexperience.
I also thank all those who have contributed to the debate, but before I reply to some of the main points, I remind the House of the purpose of the Bill, which is to support local growth and local jobs by tackling the barriers that hold back investment and growth, and that slow down sustainable long-term development. Through this Bill, six Government Departments come together to make the planning system quicker and more efficient, to accelerate investment in the modern infrastructure that our economy needs—including faster broadband and more energy generation—and to introduce a completely new type of employee ownership.
The Bill has the support of the business community. The British Chambers of Commerce said that it welcomed legislative measures to promote growth and infrastructure and the measures in the Bill to speed up and simplify the planning system. The Confederation of British Industry said:
“This new Bill should give confidence to business that the Government understands the need to fast track important infrastructure projects to boost growth. “
It welcomed the measures aimed at increasing transparency and accountability in the planning system.
I turn to some of the questions that have been put. The shadow Secretary of State asked me for an assurance that any amendment to clause 23 would be brought forward in this House and I am happy to give him that assurance. That is the aim of the timetable that we have set out in the consultation.
We had some notable contributions from Government Members, including from the former Minister, my hon. Friend the Member for Bromley and Chislehurst (Robert Neill), and my right hon. Friend the Member for Arundel and South Downs (Nick Herbert)—it was good to hear from him. He and my hon. Friend the Member for Newton Abbot (Anne Marie Morris) raised specific questions about the effect of clause 7 on national parks. I am happy to write to both of them with specific reassurance on that point.
Michael Fallon
I will in a moment.
I welcome, too, the support that we have had from my hon. Friends the Members for Halesowen and Rowley Regis (James Morris), for Bury St Edmunds (Mr Ruffley), for Henley (John Howell), for Dover (Charlie Elphicke), for Cleethorpes (Martin Vickers) and others. My hon. Friends the Members for Rugby (Mark Pawsey) and for Waveney (Peter Aldous) raised specific questions about business rates. What I can tell them is that the Valuation Office Agency will be publishing data shortly, which we will collect in the impact assessment, which will be available to the Committee scrutinising that particular provision.
I turn to the principal issues raised by Opposition Members about clause 1. First, they asked where the evidence was of delay. Let me answer that directly. Less than 60% of major planning applications are decided in 13 weeks. Secondly, if Coventry can increase the percentage of all its applications that are determined within 13 weeks from 54% to 98%, and if Surrey Heath can increase its percentage from 42% to 100%, then any council can. Let me be clear: efficient councils have nothing to fear from clause 1.
Only a small minority of councils need to raise their game. Let me reassure the hon. Member for Mid Dorset and North Poole (Annette Brooke): we are not, as she feared, speaking of a massive number of councils. It is a small minority who need to raise their game if we are to ensure their local areas do not lose out in the recovery that is now under way. The Labour party had exactly the same concerns. In its last year in office in 2009-10, it cut the planning delivery grant for 22 local authorities on the grounds of poor performance. It was concerned, just as we are concerned. Applicants do not have to go to the Planning Inspectorate. Clause 1 makes it very clear that they simply have that alternative.
Turning to clause 5, there are, of course, concerns about the amount of affordable housing, and especially about those schemes that are stalled in section 106 negotiations. I need to repeat the point made earlier by the Secretary of State: affordable housing that is stalled for a minimum period of five years is not affordable housing—it is non-existent housing. We already know there are 1,400 sites comprising some 75,000 homes waiting to be unlocked. We accept that some councils are already renegotiating. However, even on the Local Government Association’s figures, 60% of councils are not renegotiating. Some 20% of councils are unwilling to negotiate. If we do not act, each of their schemes must wait for a further five years before appealing to the Secretary of State. For anybody who genuinely wants to see more affordable housing, that is simply unacceptable. If some councils can renegotiate, then all councils can renegotiate, and all councils should renegotiate. The shadow Secretary of State cannot have it both ways. At one point he suggested the measure was unnecessary and would not have any effect. Then he complained that developers would wait for it to take full legislative effect.
Turning to clause 7, I was asked about the definition of electronic communications equipment. The Bill has to be technology-neutral, so this clause could apply to all electronic communications equipment. However, as we have said before, the intention of the Bill is to allow cheaper and quicker deployment of broadband street cabinets and overhead infrastructure, not mobile phone masts. Let me reassure those who have concerns about the possible impact of this provision on our national parks and other protected areas that, under proposals on which we will shortly be consulting, providers will still have to notify local authorities of their plans. They will be encouraged to engage with local authorities and communities as a matter of best practice, and they will have to sign up to a code of practice on the siting of this infrastructure, to ensure that that is handled sensitively.
Michael Fallon
I will give way in a moment.
The right hon. Members for Greenwich and Woolwich (Mr Raynsford) and for Wentworth and Dearne (John Healey) asked about the definition of significant commercial development under clause 21. We will consult on that definition soon, and on whether a new national policy statement should be put in place.
I can understand Labour’s ambiguity on this topic. Since the last election a succession—an entire football team—of former Ministers have admitted that their approach was too top-down: the Leader of the Opposition; his brother; the shadow Chancellor; the shadow Energy Secretary; the shadow Work and Pensions Secretary; the shadow Health Secretary; the shadow Culture Secretary; the right hon. Members for Wentworth and Dearne (John Healey), for Tottenham (Mr Lammy) and for Southampton, Itchen (Mr Denham); the hon. Members for Bishop Auckland (Helen Goodman) and for Plymouth, Moor View (Alison Seabeck); and, latterly, the shadow Minister, the hon. Member for Birmingham, Erdington (Jack Dromey). On his first appearance, he said that
“Labour was wrong…to downgrade the role of local government.”
One year on, at the Labour party conference last year, he said, after all, that he supported regional housing targets:
“you’ve got to have that strategic approach…in the regional spatial strategy framework.”
There we have it: they are against a top-down approach but they are back in favour of regional spatial strategies. Of course we will listen in Committee as we debate each—
Mr Speaker
Order. The Minister of State is not giving way. He gives every indication at this stage of wishing to plough on, and that is his entitlement.
Michael Fallon
Of course we will listen in Committee to the debate on each clause, but the Labour party is going to have to be a lot more persuasive than it has been this afternoon.
Tristram Hunt
Will the Minister return to the points raised by the right hon. Member for Arundel and South Downs (Nick Herbert) that this wretched little Bill constitutes a total reversal of the localism strategy of the past two years and is a classic case of centralism based on a failed economic strategy?
Michael Fallon
I have already made it absolutely clear that as we have simplified the planning guidance, we are, of course, also responsible, as are local councils, for the efficient delivery of planning applications. I repeat that good, efficient councils have nothing to fear from the Bill.
Let us examine the previous Government’s record: in 13 years, they passed 15 planning Acts; six years after their main planning Act of 2004, fewer than 60 out of 335 planning authorities actually had the core strategies they were supposed to have; and after 13 years of top-down housing targets, they ended up with the lowest number of new homes built in any peacetime year since the 1920s. And who can forget the shambles of the eco-towns? Ten were promised, only three turned out to be viable without public subsidy, amazingly only one was assessed as environmentally friendly and, of course, none of the 10 was actually built. That is Labour in a nutshell: nought out of 10 for delivery. They give the builders of the Potemkin village a good name. So there we have the Labour record: planning authorities with no plans; development agreements commissioned but not actually signed; affordable housing commitments demanded but not actually built; eco-towns promised but none—not one—actually delivered. The Labour party is defending a record of failure and supporting a position of stagnation.
Bill Esterson
The Minister has mentioned the efficiency of councils twice now. Councils need certainty and so do businesses if we are to see growth and success in our economy. Will he define what he means by an efficient local council, using either a number of councils or a percentage?
Michael Fallon
The Secretary of State made it clear, and I repeat it, that we will consult on the definition of a poorly performing council. We will set out the criteria and I hope the hon. Gentleman will respond to that consultation.
Let me be very clear about the contrast that faces the House tonight. The Labour party is defending a record of failure and the status quo of stagnation, whereas this Government and this party want to see growth in all parts of our country. We are determined to open up opportunity for sustainable development, not just in the most efficient local authorities but in every single council area.
Joan Walley
Now that the Minister has mentioned sustainable development, would he care to give the House a definition of what he means by it?
Michael Fallon
The hon. Lady had a good go at trying to define sustainable development at some length earlier this afternoon. What we mean by sustainable development is development that is there for the long term, and she ought to support that in her authority and in others.
Let me be clear that the Bill promotes more efficient planning, encourages faster roll-out of broadband, will accelerate investment in electricity generation and in modern gas networks, and extends new opportunities for employee ownership. This is a Bill for growth and I commend it to the House.
Question put, That the Bill be now read a Second time.
Business without Debate
Growth and Infrastructure Bill (Money)
Growth and Infrastructure Bill (Ways and Means)
Committees
Mr Speaker
With the leave of the House, I propose to take motions 6 to 19 together.
Ordered,
Business, Innovation and Skills
That Margot James and Simon Kirby be discharged from the Business, Innovation and Skills Committee and Caroline Dinenage and Mr Robin Walker be added.
Defence
That John Glen be discharged from the Defence Committee and Mr Adam Holloway be added.
Education
That Damian Hinds be discharged from the Education Committee and Chris Skidmore be added.
Energy and Climate Change
That Laura Sandys be discharged from the Energy and Climate Change Committee and Mr Peter Lilley be added.
Environment, Food and Rural Affairs
That Amber Rudd be discharged from the Environment, Food and Rural Affairs Committee and Sheryll Murray be added.
Human Rights (Joint Committee)
That Mike Crockart be discharged from the Joint Committee on Human Rights and Simon Hughes be added.
International Development
That Mr Sam Gyimah and Richard Harrington be discharged from the International Development Committee and Fiona Bruce and Mark Pritchard be added.
Justice
That Ben Gummer and Elizabeth Truss be discharged from the Justice Committee and Rehman Chishti and Robert Neill be added.
Northern Ireland Affairs
That Kris Hopkins be discharged from the Northern Ireland Affairs Committee and Andrew Percy be added.
Procedure
That Karen Bradley be discharged from the Procedure Committee and Martin Vickers be added.
Scottish Affairs
That David Mowat be discharged from the Scottish Affairs Committee and Mike Crockart be added.
Transport
That Paul Maynard and Julian Sturdy be discharged from the Transport Committee and Karen Lumley and Karl MᶜCartney be added.
Treasury
That Mr Michael Fallon be discharged from the Treasury Committee and Mr Brooks Newmark be added.
Welsh Affairs
That Stuart Andrew be discharged from the Welsh Affairs Committee and Glyn Davies be added.—(Geoffrey Clifton-Brown, on behalf of the Committee of Selection.)
petition
Gareth Johnson (Dartford) (Con)
It is a pleasure to present this petition on behalf of the pupils and staff of Our Lady of Hartley primary school, an excellent school in my constituency. The children there held a first-class debate on the subject and collected signatures at the school gates. The children have asked me to present this petition to the House.
The petition states:
The Petition of pupils and teachers at Our Lady of Hartley Primary School,
Declares that it is sensible to have all dogs micro-chipped as puppies; further that the Petitioners believe that this will reduce the amount of lost or abandoned dogs and will also help to ensure that the owners of dangerous dogs can be held to account as the Petitioners believe it is the owners, not the dogs, who are at fault; further that the Petitioners do not wish for micro-chipping to be made compulsory but wish it to be strongly encouraged and made accessible for all in terms of cost.
The Petitioners therefore request that the House of Commons urges the Government to consider measures to encourage dog owners to have their dogs micro-chipped and that the Government seek to reduce the cost of micro-chipping puppies.
And the Petitioners remain, etc.
[P001127]
Nursery Milk Scheme
(12 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Annette Brooke (Mid Dorset and North Poole) (LD)
I want to start by saying how important the nursery milk scheme is. All children under five years old in a day-care or early years setting for two or more hours a day are eligible to receive a free daily drink of milk. Milk is full of important nutrients for children. Their free third of a pint portion contains calcium for strong bones and teeth, protein for growth and development, vitamins such as B2, B6, B12 and folate, and the minerals iodine, phosphorus, potassium and zinc.
The Education Act 1944 provided free milk—a third of a pint a day—in schools to all children under the age of 18. I have some personal recollections from the 1950s of the milk in one-third pint bottles left in the sun all day and served in such a way that I am still not very good about drinking my milk, which may be why my bones are a bit fragile. In 1968 Harold Wilson’s Labour Government withdrew free milk from secondary schools, and of course it is well known that in 1971 Margaret Thatcher withdrew free school milk from children over seven.
I saw first-hand the benefits of free school milk for under-fives on my visit to Hayeswood first school in Colehill in my constituency on world school milk day. It was interesting to go to a school, because we have to appreciate that now that children are starting school when they are four, they are accessing the milk at school. I was impressed with the numbers and the uptake at that school, and also with the fact that, through the particular scheme that was operating, older children could have the milk purchased for them at £15 per term.
Jim Shannon (Strangford) (DUP)
World school milk day came to my area too. Castle Garden primary school participated and more than 100 young children were present. The important aspect of that visit was that young children who had not taken milk regularly said that they were encouraged by those who were there to participate in taking milk rather than fizzy drinks. Did the same thing happen in the school that the hon. Lady visited?
Annette Brooke
Absolutely. Indeed, I was talking to one of my local nurseries—a nursery that is registered for milk. The owner of the nursery had discussed with parents whether they wanted the milk or not. Parents had voiced concerns about participating because their children would not drink milk at home, but they said, “Well, we’ll give it a try,” and to their surprise, every child in the nursery drinks their milk in the group setting.
However, in the past few years the costs of the scheme have been rising. In 2007-08 it cost the Government £27 million, but by 2010-11 the amount had risen to £53 million. Increased costs could be due to greater uptake, growth in the number of under-fives in day care settings or increases in the price of milk. The Department of Health has predicted that costs could rise as high as £76 million by 2016 and so recently set up “Next Steps for Nursery Milk”, a consultation to review the current system and consult on how to make efficiencies.
A significant number of day-care providers are effectively paying over 90p a pint for school milk. I know that we must ensure that the scheme can operate as efficiently as possible while ensuring the greatest access for entitled children. There is clearly also a need to add as little as possible to the burden of bureaucracy on child-care providers and schools. I want to take this opportunity to say how pleased I am that the Department has stated its commitment to this universal benefit for under-fives and that it is fully committed to keeping it as such. The options offered in the consultation are: to leave the scheme as it is; to cap the price that can be claimed for milk; to issue e-voucher cards with economy incentives; or for day-care providers and schools to arrange the direct supply of milk themselves.
There are a number of important aspects to consider when thinking about changing the current scheme. First, it is important that as many eligible children as possible receive their allocation of milk. The Department’s own figures show that roughly 40% of the total number of under-fives currently receive milk at their day-care setting. Whatever system is put in place must be easy to use for day-care providers so that as many as possible take part in the scheme. Given the percentage of children who currently do not receive milk, I ask the Minister to look at how the Government can increase the number of children receiving the milk to which they are entitled. I appreciate that that might be counter to the idea of reducing the costs of the scheme, but I was personally rather disturbed that perhaps only 40% of eligible children access the milk.
Kerry McCarthy (Bristol East) (Lab)
Is the hon. Lady aware that many children are lactose intolerant and that there have been links between the consumption of dairy products, particularly milk, and the development of childhood asthma—there is no firmly proven link, but it has been suggested that there is a connection? Are there alternative sources of calcium, such as soya milk, available to children who perhaps should not be drinking dairy milk?
Annette Brooke
I absolutely take on board the point that some children are allergic to cow’s milk. I am sure that is an issue the Minister could address when he sums up.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
Although different schemes operate in Scotland, Wales and England, this is, unusually, a GB-wide consultation, and obviously I have an interest as a Member who represents a Scottish constituency. The Scottish Pre-school Play Association has written to all Scottish MPs and is very much in favour of what has been called option 2, which would allow access to local Scottish suppliers and milk producers. Is that the option the hon. Lady would favour of the ones set out in the consultation?
Annette Brooke
I thank the hon. Gentleman for that intervention. I will not say which option I prefer, because I want to air all the issues, which I think are rather complex, and it is very important that they are all considered.
To return to my point about the variability in how children access free school milk, I have some figures from Bournemouth, Poole and Dorset, three local authorities, for the percentage of under-fives accessing Cool Milk, which is the agent that provides it, so it is possible that there are other ways of getting the milk. The figures are interesting: for Dorset it is 89.8%, for Bournemouth it is 25.5% and for Poole it is 46.3%. It would be worthwhile to get all the figures from the local authorities, rather than receive the answer, “This information is not collected centrally.” Some worthwhile statistical analysis could be carried out to make sure that our most disadvantaged children actually access the milk, because that is not automatically the case.
The School and Nursery Milk Alliance raises serious concerns about the knock-on effect that changes to the nursery milk scheme could have on the over-fives scheme. It is worried that a reduced take-up among under-fives will result in fewer over-fives moving on to school milk and that, if providers are no longer supplying nurseries in other settings, it will be harder for them to supply schools as part of the over-fives milk scheme.
Another point to consider is the administration process for child-care providers. At present, child-care providers or the agent they use, such as Cool Milk, which operates in my constituency, are reimbursed for the costs of the milk after they have purchased it. Whatever scheme is put in place must not put more of a burden on child-care providers, but be simple and easy to use so that nurseries and other settings are not put off taking part in the scheme.
We must consider how the milk will be delivered to the care providers. It is, of course, more expensive to deliver to nurseries in small and rural areas and to childminders working in difficult to access places.
Mr Mark Williams (Ceredigion) (LD)
I congratulate my hon. Friend on securing this debate. As has been said, the issue’s ramifications go much wider than England. On rurality, I represent Ceredigion and she also represents a rural constituency, and there are particular challenges when nurseries and child-care providers are based in a rural setting, where the operational costs are that much greater than in urban areas. The Member for Edinburgh North and Leith (Mark Lazarowicz) asked my hon. Friend whether she would support option 2. If she went along with that and a cap system, I would hope that she would ask for guarantees that the operational costs could be factored in so that rural people were not put at a disadvantage.
Annette Brooke
It is important that we take on board the additional costs in rural areas, which would become highly relevant if a capping system were to be introduced. I agree with the points that have just been made.
In any new system, it is important that nurseries and child-care settings are still able to make a choice about where they procure the milk. It is important that a supplier can ensure a suitable delivery time so that the quality of the milk remains high. In many settings the location of the milk provider will be important, with nurseries choosing a local, trusted supplier.
It is also important, when considering how best to progress and how to ensure best value for money, that we consider the requirements of the child-care providers. The consultation document repeatedly refers to pints of milk, but it must be remembered that children receive a third of a pint a day. Many settings do not have facilities to wash drinking cups, so they require milk to be supplied in single-serve packaging, and many would not be able to serve children milk if it was not delivered in those sizes, which is another cost factor. It is also important to consider special types of milk, such as kosher milk, that might be needed for religious or cultural reasons or, indeed, as an alternative if children have an allergy. I was particularly impressed with the cartons that I saw on my school visit on world school milk day, because they were really attractive and it literally was cool to drink milk.
I have received representations from a number of different organisations from the child-care and dairy industries. Although they understand why the Department is conducting a review, many of them, such as the School and Nursery Milk Alliance, are concerned that, while the Government are committed to protecting the entitlement of children to milk in early-years settings, proposed changes to the scheme could reduce the actual number of children receiving the milk. It is important that we maximise the number of children taking up the offer.
I know that the organisations will have submitted detailed responses to the consultation, so I just want to touch briefly on the different options and some of their pros and cons. Under option 3—the e-voucher system—child-care providers would no longer have to pay for milk and then claim reimbursement. They would instead be credited with a prospective monthly payment equal to the number of pints required multiplied by a fixed reimbursement rate, which would be set at an average market price per pint. The National Day Nurseries Association has voiced concerns that this kind of scheme might place additional administrative responsibility on providers. I ask the Minister to consider that, particularly given the Government’s commitment to reducing the burden on early-years settings that is currently being consulted on by the Department for Education.
Having garnered opinions, it seems that option 4—direct supply—is least favoured by those in the industry. Anticipated problems that have been raised with me include the cost of the operation; the fact that a national tender may quickly become uneconomic because while the supply of larger settings may be relatively straightforward, cost is quickly added when significant numbers of smaller, local, rural deliveries are required; denial of choice; the impact on local suppliers and dairy farmers; and the impact on the quality of the milk—I have heard time and again about the importance of fresh rather than UHT milk being supplied.
Bodies such as Dairy UK, Dairy Crest and the National Day Nurseries Association favour option 2—capping the price paid for milk—but they are concerned that a cap at the levels suggested by the Department might mean that many settings are not able to afford to have milk delivered at that price and so will opt out of the scheme, meaning that fewer children receive their milk. Dairy UK has suggested a single price cap in the region of 65p to 69p per pint, which it hopes would allow for the delivery of one-third of a pint packages of milk to smaller, rural and remote settings.
I am very pleased that the Government are committed to keeping free milk for all children under five years old in a day-care or early-years setting for two or more hours a day. I understand the need for a review of the scheme to ensure value for money, and I look forward to reading the Government response to the consultation, which I am sure will have taken into account a number of the concerns that have been raised in the House today. I urge the Minister to use this review as an opportunity to widen participation in the scheme so that more eligible children receive the milk to which they are entitled. I strongly believe that everyone who is entitled to the milk and wants it should be able to have it, as that is beneficial to the child and ultimately to the nation, with perhaps fewer costs and burdens on the NHS. As a final request to the Minister, will he say whether any European Union money or subsidies would be available to support this excellent scheme?
The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)
I congratulate my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) on securing this debate. During her years in the House she has not only shown a keen interest in the nursery milk scheme but has been a strong parliamentary ambassador for the National Society for the Prevention of Cruelty to Children and, since 2006, a champion of Save the Children. That is a long track record of supporting and standing up for issues that matter to children—in this case, the nursery milk scheme. She rightly outlined the tremendous health benefits not only of the nursery milk scheme but of a healthy diet in young children, and highlighted the benefits of drinking milk, given the proteins, minerals and vitamins that it contains. I want to confirm to the House again that the nursery milk scheme is here to stay.
Before I address the points that my hon. Friend raised, it is worth highlighting a few of the issues. While we fully endorse the provision of nursery milk, she is absolutely right to point out that the cost of the scheme has gone up considerably over the past few years. In an average supermarket, a pint of milk costs about 50p to 55p. According to the most recent figures of June 2011, within the scheme there are 23,000 claims—well over 50% of the total—where milk costs 70p to 79p per pint, and almost 9,000 claims where it costs over 90p per pint, which is almost double the cost in the supermarket.
Many hon. Members representing rural constituencies will be concerned that dairy farmers across the country are struggling, and that the increased cost of milk is not rewarding those farmers in the farm-gate price. We must reflect on the cost of the scheme. Since the scheme costs a lot of money, it would be nice if those companies that profit from it also recognised that some of that profit could be passed back to famers in the farm-gate price. The Government and the National Farmers Union do not see that happening as part of the scheme, and although the NFU and the Department for Environment, Food and Rural Affairs support the nursery milk scheme as a way of supporting dairy farmers, it is nevertheless disappointing that companies that supply nursery milk are not supporting our farmers in the way we would like.
As my hon. Friend rightly said, the nursery milk scheme is of long standing and has been running throughout Great Britain since the 1940s. The devolved Administrations in Scotland and Wales fund milk supplied through the scheme to children in their countries, and Northern Ireland has its own, similar scheme—I am pleased to see the hon. Member for Strangford (Jim Shannon) in his seat as usual.
As we know, the scheme funds free milk for around 1.5 million children under five years of age at 55,000 child-care providers throughout Great Britain. Nursery milk is a universal benefit, meaning that child-care providers can claim the cost of milk provided to any child, regardless of the child’s home circumstances. The scheme is valued by parents and pre-school staff, and its health care benefits were thoroughly outlined earlier in the debate.
The Government recognise, however, that the nursery milk scheme is expensive, and the consultation was about improving its operation and ensuring that it remained fit for purpose. The scheme remains largely unchanged since it was first introduced as a wartime measure, and in recent years prices claimed for milk purchased under the scheme have risen significantly, owing largely to third-party agents who seek to make considerable profits by delivering milk to child-care providers. As I said earlier, unfortunately those profits are rarely paid back to farmers in the farm-gate price.
The prices claimed for milk supplied under the scheme have risen significantly, with some claims reaching almost £1 a pint. That has led to a corresponding increase in the overall cost of the scheme. In 2007 and 2008, the scheme cost £27 million, but by 2010-11 that had risen to £53 million—it almost doubled in only four years. If we do nothing, that trend looks likely to continue, with costs potentially rising to £76 million by 2016.
Under the current system, there is no limit on the price at which child-care providers may purchase milk, or even a requirement for each provider to review their milk expenses. In many cases, agents supplying milk handle the claims themselves, rendering child care providers unaware of the price paid. For those reasons, the total cost of the scheme has risen dramatically over the past few years, and although the amount of milk supplied has risen by 25% since 2009-10, the total cost of the scheme has risen by 45%.
Tessa Munt (Wells) (LD)
Does the Department of Health have a grip on the procurement process involved in this scheme? When providing milk across the nation, surely we should be able to supply from local sources or distributors. The costs that the Minister mentions seem to have escalated greatly, but farm-gate prices have not changed much. It seems extraordinary that someone has not got a grip on procurement.
Dr Poulter
My hon. Friend is absolutely right, and that is why the Government launched the consultation in the first place. The scheme was devised in the second world war, and its provisions mean that the Department of Health currently has no role in active procurement. The Government embarked on the consultation in view of the rising costs, and my hon. Friend will rightly feel concern for dairy farmers in her area of Somerset. Profits from this scheme are going to intermediate companies, and the cost has recently escalated out of control. My hon. Friend also highlights the fact that farm-gate prices have not improved as a result of those increased prices and profits for intermediate suppliers of milk.
It is worth pointing out that an important factor contributing significantly to the scheme’s accelerating costs seems be embedded in its design. No mechanism exists to incentivise child-care providers to economise and search for the highest attainable value for money in their local markets, to support their local farmers or to source their milk from a certain provider. Over the last three years, the average price paid for a pint of milk in a supermarket has been 50p, but the average charged by agents is 78p, which is well over 50% higher. That shows that the scheme is rapidly becoming unfit for purpose, which is exactly why the Department embarked on the consultation.
Annette Brooke
Until recently, at least one school was not registered in the scheme because it feared the bureaucracy would be too great. A balance must therefore be struck to ensure that schools and child-care providers participate in the scheme.
Dr Poulter
My hon. Friend makes a good point. As part of our consultation, we are looking at a number of options as to how we can maintain an effective scheme and ensure that the one we offer and deliver is better value for money.
It is worth looking at the three options in the consultation. The first option was to cap the price that can be claimed for milk. Under that option, an upper limit on the price that could be claimed for milk would be introduced and increased each year in line with inflation in the retail price of milk. In special circumstances, arrangements would be put in place to vary the cap for child-care providers that, perhaps because of geographical isolation and rurality, to which hon. Members have alluded, do not have access to milk priced at the normal market rate.
The second option was to issue e-voucher cards with or without devolved incentives for child-care providers to buy milk economically. Under that option, child-care providers would no longer have to pay for milk and then claim reimbursement from the nursery milk reimbursement unit. On joining the scheme, child-care providers would indicate how many children would normally be attending for two hours or more per day. They would then be credited with a prospective monthly payment equal to the number of pints required, multiplied by a fixed reimbursement rate, which would be set at an average market price per pint.
The final and third option was to contract a company or consortium of companies for the direct supply and delivery of milk to all child-care providers. Under that option, the Department of Health would take a much more active role in procurement. It would contract a company, or a consortium of companies, for the direct supply of milk to all child-care providers registered with the scheme at an agreed price per pint supplied. That is one way to avoid the bureaucratic burden to which my hon. Friend has referred.
Jim Shannon
The debate so far has been about the price of a pint of milk. My recollection, like that of the hon. Member for Mid Dorset and North Poole (Annette Brooke), is of a third of a pint of milk. If we reduce the quantity of milk for a small child, would that not reduce the price? Is that too simplistic?
Dr Poulter
We will see what the consultation says. One option, which I have outlined, takes into account the bureaucratic burden of the cost on schools. We value the scheme and want to keep it—that is implicit—but at the same time, we recognise that going through a bureaucratic process to claim for milk could increase the cost to nurseries and other child care settings. The third option in the consultation is therefore for direct procurement from the Department of Health. That would help to reduce the bureaucracy in the scheme, although the hon. Gentleman will be aware that there is an allied, parallel scheme in Northern Ireland that operates in a similar way to the schemes in England, Scotland and Wales.
The National Farmers Union values the nursery milk scheme as a well established and highly regarded programme that plays an intrinsic role in society, supporting our dairy farmers as a key part of the supply chain. At the same time, the NFU believes that every attempt must be made to ensure a fair return to the whole dairy supply chain, including the primary dairy farmer. We must not lose sight of that. When the intermediaries are making huge profits, the farm-gate price—the price paid to farmers, who we value, particularly in rural communities—must be recognised in how the scheme operates. For the NFU and all those concerned about the impact of the proposed changes on the dairy market, let me explain that, according to Dairy UK estimates, milk supplied under the nursery milk scheme represents less than 1% of the total value of the UK dairy market; nevertheless, it is an important part of that market.
We are consulting on the scheme. The consultation closed at the end of last month, and we will be considering the representations made. To conclude, I repeat that the nursery milk scheme will continue as a universal benefit. It has huge health benefits for young children, and all eligible children in the care of child-care providers will continue to receive their free milk. We need to establish a system, however, that makes the nursery milk scheme fit for purpose and makes it adapt to recognise the important role that farmers play in the supply of milk—