House of Commons
Prayers
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Oral Answers to Questions
David Rutley (Macclesfield) (Con)
1. What steps he is taking to regenerate high streets and town centres.
The Minister for Housing (Mr Mark Prisk)
The Government are determined to help our high streets both adapt and compete. That is why we have established over 300 town team partners, provided £10 million to get empty shops back into use and have now extended the business rate relief for small shops, helping half a million enterprises.
David Rutley
The Make it Macclesfield forum is taking forward important regeneration initiatives and, nearby in Poynton, our active town council has introduced a shared spaces scheme. We are fortunate to have such strong local leadership, as well as the invaluable contribution from many small businesses. Will my hon. Friend tell us what steps he is taking to help more small businesses start up on our high streets?
Mr Prisk
We want to make it easier for entrepreneurs to start up, and that is why today we have opened a new shop in the Department in Victoria street for six businesses to trade, rotating every fortnight. Working with PopUp Britain, we want this shop to be an exemplar for others right across the country. I would say to local government leaders and to landlords, “Let’s take this examplar and roll it out across the country”. I am happy to invite my hon. Friend to see it for himself—and, indeed, the Opposition Front-Bench team, as I hope they will be able to apply this principle and follow our lead across the country.
Alison McGovern (Wirral South) (Lab)
Wirral council has done a huge amount of work to regenerate Bromborough village and New Ferry town centre in my constituency. It wants to continue doing this into the future, but its ability to do so is severely constrained by cuts. It is the season of good will, so may I ask the Minister to set a new year’s resolution and treat Wirral council better next year than he has this year?
Mr Prisk
It is a little early for new year’s resolutions, but I am always happy to take a collaborative approach to this issue. It is about funding, but it is also about ensuring that there is innovation on the ground, and, as my hon. Friend the Member for Macclesfield (David Rutley) said, it is about strong local leadership, too. I hope that that is what we will see in the Wirral.
Duncan Hames (Chippenham) (LD)
I hope there is plenty of passing trade for the pop-up shop at the Minister’s Department. I am pleased to report that there has been plenty of passing trade for the pop-up shop in Chippenham’s Emery Gate centre—it is a worthwhile initiative and I am glad that the Minister supports it. Does he agree that key is the importance of support from the landlords in these shopping centres to ensure that they play their part in helping to have a vibrant town centre from which they ultimately will benefit?
Simon Danczuk (Rochdale) (Lab)
Will the Minister tell us what, if any, business rates the pop-up shop tenants are paying on that property and why it is that the postponed revaluation, which has helped to keep business rates artificially low in places such as Victoria street in London has been used to subsidise artificially high business rates in places such as Rochdale?
Mr Prisk
The hon. Gentleman has missed the point. With the small business rate relief, the smallest businesses have been removed from paying it, as the Chancellor announced only last week. On the revaluation, what is clear from the Valuation Office is that while it is true that possibly 300,000 businesses might benefit, it is also true that potentially 800,000 people would lose out. That is the problem.
Neil Carmichael (Stroud) (Con)
2. What steps he is taking to promote economic growth in rural areas through local authorities.
The Secretary of State for Communities and Local Government (Mr Eric Pickles)
Following the rural economy growth review, the Government have committed £165 million to growth in rural communities, including £60 million in small grants to farms, forestry and micro-enterprises and £15 million to promote rural tourism. The Government have also dedicated £530 million for superfast broadband in rural areas.
Neil Carmichael
Does my right hon. Friend agree that the retained business rate provides a great opportunity for district councils to help businesses, building on the success of Gloucestershire county council in investing money in broadband and promoting careers advice throughout the county, and does he also agree that more would be helpful?
Mr Pickles
I congratulate my hon. Friend. Following the agreement on broadband that was reached with the European Commission, Herefordshire and Gloucestershire have been allocated £18.1 million. My hon. Friend has made a good point: this gives councils an opportunity to receive money as a right rather than approaching the Government with a begging bowl.
David Simpson (Upper Bann) (DUP)
What is the Government’s policy on allowing existing businesses in the rural community to expand their premises?
Mr Pickles
Our policy can be seen in the national planning policy framework, and also in local plans. A number of local authorities have pioneered the use of redundant farm buildings. Decisions are made on an entirely local basis.
Jessica Lee (Erewash) (Con)
3. What steps he is taking to support neighbourhood planning.
The Parliamentary Under-Secretary of State for Communities and Local Government (Nick Boles)
This year we awarded £3.1 million to four organisations to help communities to make progress with their plans. We fund the new burdens that local authorities may face, and my Department works closely with many neighbourhood planning areas. As a result, communities are making progress, and the first neighbourhood development plan passed an independent examination last week.
Jessica Lee
In Erewash, interest has been expressed in the establishment of a neighbourhood plan forum. What further guidance can my hon. Friend offer to ensure that local communities have the information that they require in order to start their projects?
Nick Boles
We want to encourage as many communities as possible, both urban and rural, to embrace neighbourhood planning. Only this morning I met a dozen neighbourhood planning groups in London, and I shall be visiting more groups throughout the country in the new year. Local authorities are responsible for providing information and support, and my officials are available at any time to answer questions and offer guidance to anyone who is interested in going down this road.
Andrew Gwynne (Denton and Reddish) (Lab)
May I return the Minister to the issue of support for town centres? Does he accept that by including business and commercial projects in the major infrastructure regime, we risk repeating some of the planning mistakes of the 1980s, and allowing a free-for-all for developments on the edges of and outside town centres at the expense of the viability of our town centres?
Nick Boles
I do not accept that at all. As the hon. Gentleman will know, we have specifically said that we will exclude retail developments from the category of business and commercial schemes that might be subject to the major infrastructure regime. Town Centre First means something to this Government, unlike the last one.
Mr Nick Gibb (Bognor Regis and Littlehampton) (Con)
My constituents Andy Faulkner and Deborah Robinson are members of a committee in the village of Yapton, in my constituency, which is putting together a Yapton neighbourhood plan. They are worried about whether the huge effort and time spent by volunteers, and the expense involved in putting the plan together, will prove worth while. When a decision is to be made on a planning application, what weight will be given to the Yapton neighbourhood plan when it is in final draft form but the local plan has not yet been finalised and confirmed?
Nick Boles
I thank my hon. Friend for asking that question, because it is useful to be able to clarify the position for not just Yapton but other communities. It is important for people to understand that the weight given to an emerging neighbourhood plan is in no way contingent on the status of the local plan, and that there is nothing to prevent them from making progress as rapidly as possible.
Roberta Blackman-Woods (City of Durham) (Lab)
As a result of huge cuts in local authority budgets, councils’ spending on planning has fallen by 16% and the reduction is likely to reach 25% in the next few years. How will the Minister ensure that funds are available for neighbourhood planning in all areas—including those that are disadvantaged—from 2013 onwards, so that the Government’s commitment to localism is not watered down further ?
Nick Boles
I am sure the hon. Lady will welcome the fact that the Department is offering local authorities £30,000 for every plan produced in their area. Some £5,000 of that becomes available when a neighbourhood forum is designated, and £25,000 becomes available once a plan has been examined, to pay for the cost of examination and the referendum. There is currently a limit on the number of plans that can receive this funding in any given area, but I hope to be able to adjust that limit to ensure we do not constrain further support for neighbourhood plans.
Andrew Selous (South West Bedfordshire) (Con)
4. What assessment he has made of the rate of change of council tax over the last 15 years.
The Secretary of State for Communities and Local Government (Mr Eric Pickles)
Under the Labour Government, council tax more than doubled. Under this coalition Government, we have frozen council tax, delivering a cut of 4.4% in real terms for hard-working families and pensioners.
Andrew Selous
In the last two Parliaments I received many letters from pensioners complaining that their council tax was taking up to a third of their income. Under my right hon. Friend’s policy, I have not received so many letters of that nature. Pensioners and others appreciate the falls in council tax. I thank my right hon. Friend for the fact that, under his policy and the careful stewardship of Central Bedfordshire council and Studham parish council, my own council tax fell this year.
Mr Pickles
I am grateful to my hon. Friend. I suspect his experience is shared by other Members, but I have to tell him that the situation is worse than he thought because, even in opposition, Labour is planning to clobber pensioners. My Department has been almost swamped by demands from Labour councils to have the right to be able to tax pensioners on council tax benefit, as they attempted to tax the poor.
Mr Clive Betts (Sheffield South East) (Lab)
It is possible that in the next financial year more councils, including Conservative-controlled ones, will decide to increase their council tax. Councils are worried that although help has been made available for a council tax freeze, the Government may decide not only not to continue with it beyond 2013, but to withdraw the help made available for previous years, thus creating a black hole in council finances. Will the Secretary of State give a categorical assurance that the money made available in 2013 for the council tax freeze will be made available to councils on a permanent basis?
Mr Pickles
It is in the base. It goes into the base next year, and I can give a guarantee to the extent that I can guarantee anything with regard to financial support for councils, but if the hon. Gentleman is expecting me to project levels of council tax support beyond the millennium—perhaps well into the next millennium— I have to tell him that I cannot do so. It is wholly erroneous to suggest this is just for one year, however.
Mark Pawsey (Rugby) (Con)
19. On neighbour- hood plans, residents of Coton park, a recently completed urban development in Rugby, are enthusiastically setting about preparing their neighbourhood plan as a front-runner under the new national planning policy framework. However, they have had some concerns about the funding of their work, in particular the costs of holding the referendum. Will the Secretary of State provide some reassurance to my constituents?
Mr Pickles
With regard to the neighbourhood plan, £25,000 is paid out on completion of the process, which will help towards the costs of the referendum.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
5. What assessment he has made of progress by his Department in reducing the number of families with children being housed in bed-and-breakfast accommodation.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Don Foster)
It is unacceptable and illegal to place families with children in bed-and-breakfast accommodation except in an emergency and then for no more than six weeks. Numbers peaked in 2002, with nearly 7,000 families affected, and I am sure the hon. Lady will be delighted to know that the figure is now less than a third of that.
Mrs Hodgson
Next week, while the Minister is no doubt opening his Christmas presents—which I am sure he will get—there will be thousands of children in pokey bed and breakfasts with their parents, because they have nowhere else to go. He cited some statistics, and I would like to cite some more. The number of families in this situation has risen from 630 in March 2010 to 2,020 in September this year, a jump of more than 200%. Is the Minister proud of that record, and will he ensure that that number is lower by next Christmas?
Mr Foster
The hon. Lady is absolutely right to express concern about those children and those families. That is why this Government are taking action, with £400 million being provided to help councils deal with homelessness and an additional £350 million to help with the changes in welfare. Those measures will help tackle the appalling situation, but it is better under our Government than it was under hers.
Sir Tony Baldry (Banbury) (Con)
Is not part of the difficulty the fact that families who get into debt and cannot pay their rent are deemed to be intentionally homeless? They therefore receive limited help from local authorities and can find it difficult to get other landlords in the private rented sector to offer them accommodation if they have failed to pay their rent to a previous landlord.
Mr Foster
My hon. Friend is right to say that debt is very important. That is why some of the £400 million to which I referred is being made available to improve the level of debt assistance that is given to people. My hon. Friend is also right in that we need to ensure that much more privately rented accommodation is available. That is why we were recently able to announce an additional £200 million and £10 billion of loan guarantees to help improve the situation.
Sheila Gilmore (Edinburgh East) (Lab)
20. There are 2,000 households with children in bed and breakfasts, 880 for more than six weeks. There is room at the inn, but no cooking facilities for Christmas, and the price is an increase in housing benefit. What do the Minister’s colleagues in the Department for Work and Pensions say about that?
Mr Foster
The hon. Lady fails to acknowledge the significant reduction in the number of children in those circumstances under this Government. I nevertheless accept it is important that we do everything we possibly can to assist these families. That is why we are taking action with the relevant council and why we are making £390 million available to assist with the changes in welfare benefit, which her Government never did.
Stephen Phillips (Sleaford and North Hykeham) (Con)
6. What consideration his Department has given to introducing a minimum separation distance between wind turbines and residential properties.
The Parliamentary Under-Secretary of State for Communities and Local Government (Nick Boles)
We have been clear that wind turbines should not have unacceptable impacts on local communities, but we have not set minimum separation distances nationally, because to do so would cut across localism.
Stephen Phillips
I am grateful to the Minister for that answer. He will know of the concerns of many in my constituency and across Lincolnshire about inappropriate onshore wind development. It is fair to say that the localism agenda the Government have pursued has done much to involve local people in the planning process, but there is considerable support in Lincolnshire and across the country for minimum separation distances, which do a lot to encourage public support for onshore wind and allay people’s concerns. I hope that his Department will seriously consider the issue, so that he can come back to the House and tell us what he is going to do.
Nick Boles
My hon. and learned Friend and I represent neighbouring constituencies and like him I believe that a minimum separation distance might be appropriate in our flat fenland landscape. That is why, before my appointment as Planning Minister, I supported Lincolnshire county council’s wind energy position statement and urged my planning authority to reflect it in its local plan. However, not all of England is like Lincolnshire—sadly for the rest of England—and a top-down national policy that ignored local variations in topography and local opinion would be wrong.
Alison Seabeck (Plymouth, Moor View) (Lab)
It is interesting to hear of the Minister’s interest in the noise and disruption allegedly caused by wind turbines. Would he therefore apply the same rule to the fans in energy from waste plants such as the one in Plymouth, which is 200 metres from people’s homes? Will he explain why the Department chose to call in two other applications for waste to energy plants but not the one in Plymouth?
Nick Boles
The rule I would apply is that wherever possible it should be left to local authorities to make those decisions. However, there are a few cases where applications have significance beyond local authority boundaries and it is therefore impossible for one local authority to decide. In the case the hon. Lady mentions, I would imagine that that criterion was not fulfilled.
Dame Joan Ruddock (Lewisham, Deptford) (Lab)
7. What recent assessment he has made of progress by his Department in reducing homelessness.
The Minister for Housing (Mr Mark Prisk)
The latest statistics show that homelessness is just half what it was in 2003 at its peak. However, despite the tough financial climate, we are investing £470 million to ensure that England continues to provide vulnerable people and vulnerable families with a strong safety net protected in law.
Dame Joan Ruddock
I really wonder whether the Minister has ever seen the fear in the eyes of a woman who can no longer pay her rent, does not know where the family will go, and does not know if her children can stay in the same school and if she will lose her job. Statutory homelessness has risen dramatically over the period of this Government. The Secretary of State warned the Prime Minister that it would go up by tens of thousands as a consequence of Government policies. What has the Minister got to say to that?
Mr Prisk
The right hon. Lady is right to make it a personal issue, because it is a personal issue, which is why last week I spent time with rough sleepers, who were out on the streets at night, to see for myself exactly the point she raises. I say to her that we are dealing with homelessness at its root, which means we are making sure we have a proper safety net that we have strengthened by making it easier to take people into settled and not temporary accommodation. It is why we are making sure that more people are going into work, so that they do not find themselves in difficulty, and we are making sure that we expand the private rental sector and build more homes. Sadly, I have to say that we saw the number of social homes in this country fall by nearly half a million under the last Labour Government.
Mr Philip Hollobone (Kettering) (Con)
As a member of Kettering borough council, may I share with the Minister the good news that in 2011 in the borough of Kettering, in a population of 90,000, there were only 76 valid homelessness applications? That is half the number of the peak in 2007 and is largely due to the very good efforts of John Conway and the housing team at Kettering borough council in providing support to tenants to prevent homelessness in the first place.
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
I draw attention to my interest as declared in the register.
In essence, the Minister’s reply repeated the response given by the Under-Secretary of State for Communities and Local Government, the right hon. Member for Bath (Mr Foster) to an earlier question about bed and breakfast by quoting a figure from the period of the last Labour Government and comparing it with a lower figure from the present. Frankly, that is statistically unworthy of a Minister. Will the Minister and his colleagues now recognise that there was a dramatic reduction in homelessness and in the placing of families in bed and breakfast under the Labour Government and that, in both cases, that trend is now reversing? Will he accept responsibility for the problem?
Mr Prisk
I have some respect for the right hon. Gentleman, but the reality is that we saw half a million social homes lost under the last Labour Government and the lowest rate of house building in peacetime since the 1920s. The responsibility rests with those on the Opposition Benches.
Gavin Barwell (Croydon Central) (Con)
My local authority has significant numbers of households in bed-and-breakfast accommodation, some for more than six weeks. Is not the key to solving the problem to get our mortgage market working, both so that more people can get buy-to-let mortgages to increase supply in the private sector and so that more people can buy their own home and councils do not face competition in securing private lets?
Mr Prisk
My hon. Friend makes an eloquent point; it is about both supply and demand. If we get housing supply and demand right, that will start to deal with the huge problem we inherited. My hon. Friend is absolutely right on mortgages too. I am pleased to say that the Council of Mortgage Lenders pointed out that repossessions are at their lowest for five years.
Jack Dromey (Birmingham, Erdington) (Lab)
With housing starts down and private rents up to record levels, England is now gripped by the biggest housing crisis in a generation. Homelessness, which fell under Labour, is once again soaring: homeless families in bed and breakfast, homeless young people in hostels and too many homeless sleeping on our streets. Does the Minister not accept that the most potent symbol of failure is the fact that 75,000 children will wake up on Christmas morning in temporary accommodation or bed and breakfast, without a roof over their head that they can call their own?
Mr Prisk
The hon. Gentleman refers to the Shelter campaign about 75,000 people not having a roof over their head at Christmas time. He is right to do so, because the campaign also says that the answer is more affordable homes. We are committed to doing that, and we are committed to making sure that we expand the private rental sector. This is a problem that has been around for two or three Governments and we want to make sure we deal with both the surface problem and the issues behind it.
Yvonne Fovargue (Makerfield) (Lab)
9. What factors he has considered in allocating grants to local authorities for 2013-14.
The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)
We have consulted widely with the local government sector and have given close consideration to the wide variety of responses that we received. We will publish the settlement for 2013-14 shortly.
Yvonne Fovargue
Wigan metropolitan borough has faced cuts of £108 per person, with more to come, despite high levels of deprivation and a high number of people with life-limiting illnesses. West Oxfordshire, on the other hand, has had cuts of £34 per person, despite much lower levels of deprivation and health issues. Does the Minister think that this is fair?
Brandon Lewis
Putting aside the baseline from which councils start, we have to bear it in mind that metropolitan areas such as Manchester have had a city deal worth about £1.5 billion, the new homes bonus, enterprise zones and £25 million in Growing Places funds. Local authorities should look at everything they are doing. There is £60 billion of procurement across local authorities. They can look at integrated shared management services. They should be cracking down on fraud and error, which last year alone cost £200 million.
Andrew Bridgen (North West Leicestershire) (Con)
Will my hon. Friend tell the House in outline how the business rate retention scheme will offer strong financial incentives for councils to go for economic growth?
Brandon Lewis
My hon. Friend is correct. The new scheme that changes local government finance from next year will give them two key advantages. First, they will have the ability to achieve growth in their income if they see economic growth. Secondly, and more importantly for their communities, they will have the opportunity and the incentive to be part of driving local economic growth and to see new businesses come in and more residents in employment.
Lyn Brown (West Ham) (Lab)
The Minister will, I hope, know that population is a key factor affecting the total resources allocated. Can he confirm that he will use the population projections based on the 2011 census, not earlier estimates or projections?
Mr Graham Stuart (Beverley and Holderness) (Con)
Does the Minister accept that too many central initiatives do not reach rural areas, and that if we are to ensure that people in rural areas have access to services, we need to ensure that that is put right?
Brandon Lewis
My hon. Friend is right to highlight the fact that rural areas—I represent a rural area in Norfolk, as he knows—have different issues from metropolitan and urban areas. It is important that those local authorities have the flexibility and the powers, which they now have under the general power of competence, to make decisions about what is right for their local community, bearing in mind its make-up and style.
Helen Jones (Warrington North) (Lab)
In the debates on the Local Government Finance Bill, the Government voted down all attempts to have levels of need considered when funding is allocated to local authorities, yet the result of their current policy is that the 10 most deprived authorities in this country face cuts in spending power eight times greater than the 10 least deprived authorities. When the Secretary of State announces next year’s settlement, will he attempt to rectify this injustice or will he, like the Chancellor, make the poorest and the most vulnerable pay the price for the Government’s disastrous economic policy?
Brandon Lewis
I am somewhat surprised at the hon. Lady’s question, bearing in mind that this Government inherited a problem with a number of authorities that had been left on the cliff edge by the previous Government. It is this Government who brought in the transition grant for those authorities. There are still 12 of them left; after the finance settlement we will see what the new position is. It is a disgrace that the Opposition can sit there and comment about the authorities that they left hanging out to dry facing that financial cliff, which this Government have helped to fix.
Sir Bob Russell (Colchester) (LD)
10. What advice he has given to local authorities in respect of the Protection of Freedoms Act 2012 on the use of surveillance cameras to identify those committing fly-tipping and graffiti offences.
The Secretary of State for Communities and Local Government (Mr Eric Pickles)
The Protection of Freedoms Act introduced new measures to stop the abuse of surveillance by town halls, delivering on promises made, as I am sure my hon. Friend will remember, by both Conservatives and Liberal Democrats before the general election. Surveillance is now restricted to serious crimes and requires a magistrate’s warrant. Guidance has been produced by the Home Office.
Sir Bob Russell
Could the Secretary of State advise us on how local authorities can best tackle fly-tipping and graffiti offences which, in the eyes of many people, are serious antisocial offences that cause nuisance to neighbourhoods?
Mr Pickles
My hon. Friend raises an important point. If graffiti and fly-tipping are so serious, his council can go to a magistrates court and obtain a warrant so that surveillance can take place; otherwise they would have to pursue the normal process of dealing with fly-tipping and graffiti.
Paul Maynard (Blackpool North and Cleveleys) (Con)
11. What steps his Department is taking to support community pubs.
The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)
Within the past fortnight I have been pleased to announce £150,000 of extra funding for Pub is The Hub, which helps preserve and expand traditional rural services for pubs and helps them innovate and remain sustainable. Other support measures include the new community right to bid, the national planning policy framework and the doubling of business rate relief until 2014.
Paul Maynard
I draw the Minister’s attention to Amber Taverns, based in my constituency, which has turned around literally dozens of inner-city urban pubs facing hard times by focusing on a competitive beer price, free sport and a good environment that attracts local people. Does not that show that the pub can and does have a future?
Brandon Lewis
Absolutely. I congratulate Amber Taverns on the work it is doing to support the development and enhancement of community pubs in the north of England. Such companies—there are others across the country—are clearly demonstrating that, through innovation and entrepreneurial spirit, pubs absolutely can and should continue to thrive, and indeed are thriving, in the heart of our communities. I look forward to meeting representatives of Amber Taverns and seeing their work at first hand in the near future.
David Wright (Telford) (Lab)
Urban community pubs are also of great importance. What cross-departmental work is the Minister doing to ensure that supermarkets do not use alcohol as a loss leader?
Brandon Lewis
The Prime Minister has already announced the consultation on minimum pricing for alcohol, and I am sure that he will report back on that in due course.
Greg Mulholland (Leeds North West) (LD)
Talking of supermarkets, the Minister will be aware that supermarkets are deliberately targeting pubs, often sold to them by indebted pub companies, without the community having any say whatsoever. As someone who believes in the pub and in localism, he cannot accept that. Will he meet the all–party save the pub group to tell us how he plans to change that?
Chris Williamson (Derby North) (Lab)
Surely the Minister must agree that the Government’s counter-productive austerity measures are only making matters worse. They have sucked demand out of the economy by cutting too far and too fast, exacerbating the decline of the pub trade. To make matters worse, his predecessor scrapped the community pubs initiative, which was worth £3.5 million. Does he not understand that the public want real action, not warm words and crocodile tears, from Ministers, who have abdicated their responsibility to the local communities they are supposed to serve?
Brandon Lewis
I was waiting for the hon. Gentleman to talk up the great British pub, which is a superb facility for local communities, but clearly he does not share that view. When he stands up to talks about cuts, he might want to think about outlining the £52 billion of cuts Labour projected it would make in the Department, even though it is yet to support a single thing the Department has done to reduce the deficit.
George Hollingbery (Meon Valley) (Con)
13. What guidance the national planning policy framework contains for the consideration of the needs of older people.
The Parliamentary Under-Secretary of State for Communities and Local Government (Nick Boles)
The national planning policy framework requires councils to use their evidence base to ensure that their local plan meets the full, objectively assessed needs for market and affordable housing in the area, including the housing needs of older people.
George Hollingbery
The broad conclusion of a conference I chaired recently on the national planning policy framework and older citizens was that, with real strategic vision, older people’s lives could be improved and considerable savings could be made in both the NHS and social services. Will the Minister agree to meet me and a delegation of representatives to discuss that further?
Nick Boles
I would be delighted to meet my hon. Friend and others to discuss that. He is right that imaginative housing schemes for older people can save money for the NHS and social services. They can also make it more attractive for older people to move out of their family homes, thereby helping to meet the pressing housing needs of young families.
Mr David Nuttall (Bury North) (Con)
14. What steps he is taking to stop inappropriate development on the green belt.
The Secretary of State for Communities and Local Government (Mr Eric Pickles)
The Government attach great importance to the green belt, which prevents urban sprawl by keeping land permanently open. Subject to the strategic environmental assessments, we are abolishing the last Government’s top-down regional strategies, which threatened the green belt in 30 towns and cities across the country. In addition, our new planning guidance on Traveller sites makes it clear that such sites, whether temporary or permanent, are inappropriate development on the green belt.
Mr Nuttall
Villagers in Affetside in my constituency are worried that their concerns about a proposal to erect a 113-foot-high wind turbine in their village may not be listened to. Can my right hon. Friend give them, and others in a similar position who are facing the imposition of these giant wind turbines within the green belt, any further reassurance?
Mr Pickles
My hon. Friend raises an important point, and of course his constituents will be listened to. It is immensely important, though, to understand the wise words uttered by the Under-Secretary, my hon. Friend the Member for Grantham and Stamford (Nick Boles), a few moments ago. Planning is essentially a plan-based operation, and we look to local planning authorities to determine where a wind farm or a single turbine might go and, in particular, where they might not. If they do that, I think that my hon. Friend’s constituents will feel much more relaxed about the issue.
Bill Esterson (Sefton Central) (Lab)
Developers in my constituency tell me that they can make far more money building on the green belt than on brownfield sites. Is not the reality that decontamination of brownfield sites in boroughs such as Sefton is needed to protect the green belt and boost the economy?
Mr Pickles
This is a continuation of a question that the hon. Gentleman asked me in the Select Committee. The truth is that we are making money available to ensure that contaminated brownfield sites can be dealt with. He is making an enormous mistake in suggesting that all brownfield sites are undevelopable; that is entirely wrong. Some brownfield sites are green and some greenfield sites are brown.
Annette Brooke (Mid Dorset and North Poole) (LD)
What overall impact does the Secretary of State estimate that the Growth and Infrastructure Bill will have on the green belt given the national planning policy framework that is now in place?
Mr Pickles
The green belt remains very safe and sound in coalition care. The position is clearly laid out in the national planning policy framework, and the Bill does not affect the green belt one iota.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
15. What estimate he has made of the amount of open land required for house building in the next 20 years; and if he will make a statement.
The Minister for Housing (Mr Mark Prisk)
This Government do not set top-down Whitehall housing targets. It is for elected local councils to determine, through their local plans, where development should and should not go and how best to meet housing need,.
Tristram Hunt
The Labour party in government believed in effective levels of urban density and city centre development. Rather than abusing the National Trust and other big-society opponents of sprawl as Luddites, why do not Ministers end their assault on the English countryside, start working with developers to ensure that the 400,000 homes with planning permission are actually built, and end the homelessness crisis now?
Mr Prisk
I understand that the hon. Gentleman is a historian, and he should know from the previous Government’s record that at that time we saw the lowest rate of house building since the 1920s. It is important to get the affordable homes built, sometimes making sure that we use empty homes and sometimes that we build on brownfield—and yes, we will occasionally want to make sure that greenfield land is used where that is appropriate.
Mr James Gray (North Wiltshire) (Con)
Wiltshire council, Swindon borough council and the local parish councils of Purton and Lydiard Millicent have, over very many years, strongly and unanimously opposed the application to build 700 houses on green fields at Ridgeway farm in my constituency, yet last week the inspector allowed it under the regional spatial strategy figures. Given that it is not in the green belt—we do not have green-belt land in Wiltshire—what can local people do to prevent unwanted developments of this kind on greenfield sites across my constituency?
Mr Prisk
My hon. Friend will know that I cannot refer directly to individual cases and he will understand the quasi-legal reason for that, but I would say that a robust local plan is absolutely the right way to do this. Sadly, under the previous Government we did not have that; we just had regional plans instead.
Simon Hughes (Bermondsey and Old Southwark) (LD)
17. What estimate he has made of the number of people living in social housing who have an income of over £100,000 per annum.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Don Foster)
We have estimated, based on data taken from the last three English housing surveys, that between 1,000 and 5,000 social tenant households earn over £100,000 per annum. We have consulted on proposals to charge these households a fairer rent and will respond to this consultation by the end of March.
Simon Hughes
My right hon. Friend will realise that speaking from a position where I am privileged to represent more council tenants than any other English MP, I recognise that council tenancies are very valuable and appreciated. However, given the length of the queue, a lot of people feel that it is wrong for those with an income in six figures to have the privilege of security of tenure and not to pay a higher price for that privilege. May I encourage him to see whether he can find a solution to this long-running problem?
Mr Foster
My right hon. Friend first raised this issue on the Floor of the House in 1988, and I am sure that, 24 years later, he is delighted that the coalition is listening to him. He is absolutely right: we have to make better use of affordable housing. That is why we have consulted on the issue and why we are going to build more affordable housing.
Mr Speaker
I suppose that the right hon. Member for Bermondsey and Old Southwark (Simon Hughes) deserves credit for consistency. I cannot think of many things that I was saying in 1988 that I am still saying today, but there you go.
Mr Andy Slaughter (Hammersmith) (Lab)
Nor can I, Mr Speaker—I am trying to think of something, but I cannot.
My local council thinks that £40,000 should be the cut-off figure and that that will solve the housing crisis. However, it has just responded to a freedom of information request from me by stating that, in the past five years, it has let just under 8,000 properties and that only nine of those can be identified as for people on incomes of more than £40,000. Is this not just a smokescreen to cover up the fact that council properties are being sold off when they become empty, knocked down and not replaced, and that measures such as the Growth and Infrastructure Bill are actually reducing the availability of affordable accommodation? This is a piece of nonsense and propaganda.
Mr Foster
If the hon. Gentleman wants to talk about nonsense, he should remember that, under the Labour Government, 421,000 affordable homes went out of use. Under this Government, the right to buy is being strengthened so that there is a one-for-one replacement. In addition, we are building more affordable homes and more homes for rent.
Graham Evans (Weaver Vale) (Con)
21. What steps he is taking to support (a) first-time buyers and (b) former members of the armed forces with housing.
The Minister for Housing (Mr Mark Prisk)
We announced an extra £280 million on 6 September to extend the Firstbuy scheme. This means we will help some 27,000 first-time buyers into home ownership by March 2014. Former members of the armed forces have priority to access this scheme up to 12 months after discharge.
Graham Evans
Will my hon. Friend update us on how local government housing associations are prioritising former armed forces personnel and their families, who have served their country so well?
Mr Prisk
My hon. Friend makes a very good point. As I suspect he knows, we have changed the law so that ex-service personnel who have urgent housing needs are always given additional preference for social housing by local councils. I think that will make an important difference.
Jim Shannon (Strangford) (DUP)
In Northern Ireland, the military covenant would need to be in place to ensure that ex-service personnel would have the opportunity to get housing. What discussions has the Minister had with the Ministry of Defence to ensure that that happens?
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Communities and Local Government (Mr Eric Pickles)
While the irony of your earlier remarks sinks in, Mr Speaker, I will inform the House, ahead of Wednesday’s local government settlement, that it is clear that every part of the public sector needs to do its bit to pay off Labour’s deficit. My Department is cutting its running costs by 44% and will shortly publish best-practice guidance for councils on how they, too, can make sensible savings. A written statement published today outlines how Sir Ken Knight will undertake a review into savings in the fire and rescue service, protecting front-line fire engines and fire stations, but cutting waste, inefficiency and out-of-date practices. Finally, the pop-up shop, which opened in my Department today, shows how councils can use their property assets to better effect, both to support small firms and to save taxpayers’ money. Truly—Napoleon was right—we are a nation of shopkeepers.
Mrs Hodgson
Could the Secretary of State tell the House why the Government are holding back £300 million- worth of early intervention funding over the next two years? If, as rumoured, it is for payment by results, how does he expect cash-strapped councils to be able to afford the vital prevention and early intervention work and programmes when they have to manage a cut of more than 40% in budgets over the lifetime of this Parliament?
Mr Pickles
I will make a statement covering this issue on Wednesday. The hon. Lady makes an important point. It is important to understand that part of the settlement has meant the rolling up of a number of previously ring-fenced grants. This one has been retained. The money that has been held back will be applied to local authorities. I can tell the hon. Lady that her figure is not entirely right; I think she might be pleased by the settlement.
Graham Evans (Weaver Vale) (Con)
T5. Research has shown that trade unions receive a subsidy of £113 million at taxpayers’ expense. We all believe in trade unions and think that they are a force for good, but does my right hon. Friend agree that local taxpayers will be surprised to hear that their council tax is subsidising trade union activity in local authorities?
Mr Pickles
I am glad that my hon. Friend is a massive fan of trade unions. Indeed, I believe that the trade union movement has done many marvellous things for this country. One thing that has been great is its independence from employers, and I am desperately worried that the taxpayers’ money that is subsidising trade unions might impinge on that independence. I will shortly be issuing guidance to local authorities about how we might strengthen trade unions by removing some of their funding.
Hilary Benn (Leeds Central) (Lab)
How many people who go out to work of a morning does the Secretary of State estimate will see their council tax rise next April because he has decided that people on low earnings should pay more council tax?
Mr Pickles
The right hon. Gentleman is entirely wrong in his premise. It is his party that says that pensioners should pay. It is his party that is seeking to tax the poor. It is my party and the Liberal Democrats that are offering some support. The right hon. Gentleman had better look after his own party before he comes here and lectures us.
Hilary Benn
The Secretary of State, of course, did not want to answer the question. The answer is that nearly 800,000 people who go out to work every morning face a potential rise in their council tax bill next April, when people who are on the top rate of tax will get a tax cut. If we look at what is happening in his own back yard, Brentwood borough council has just published a case study on its own scheme, which I have here. Under its proposals, a working mum who works more than 24 hours a week could see her council tax bill rise by more than £600 a year. Why is he so hellbent on penalising people who go out to work?
Mr Pickles
That, of course, was before we intervened and offered our process, which will protect people and ensure that nobody has to pay more than 8.5%. What does the right hon. Gentleman say about his own councils, which are looking to make people pay 30% on council tax? He has been singularly neglectful in his duty. He knows that his Government, had they been successful at the last election, would have made £52 million of cuts. So far, he has not accepted a single one of our cuts. The right hon. Gentleman is inconsistent in his consistency.
Michael Fabricant (Lichfield) (Con)
In answer to Question 1, my hon. Friend the Minister for Housing referred to PopUp Britain and pop-up shops. Was that just a bright idea within his Department, or did he get professional advice from people who are actually in business?
The Minister for Housing (Mr Mark Prisk)
My hon. Friend makes a very good point. I am glad to say that the sponsors for PopUp Britain included Intuit and the John Lewis Partnership.
Lisa Nandy (Wigan) (Lab)
T2. When I worked in the homelessness sector under the last Government, statutory homelessness fell by 70%. Last week’s “Panorama” programme showed the heartbreaking human cost of this Government’s appalling record on homelessness: homelessness is up, rough sleeping is up and more families are stuck in bed-and-breakfast accommodation for longer. What are this Government going to do about it?
Mr Prisk
We are taking a proactive role to ensure that rough sleeping in particular does not happen. That is what “No second night out” is all about. In London, where it has been trialled, 70% of people spend just one night on the streets. We need to tackle those numbers, but it is wrong to simply say that everything is gloomy; there is good action, there are positive ideas from councils and we have to work together.
Tessa Munt (Wells) (LD)
If the Secretary of State decides to designate a local planning authority, under proposed new section 62A to the Town and Country Planning Act 1990, planning applications can be made directly to him. What mechanisms will be in place to ensure that the influence of local people through consultation is not reduced if the voice of local authorities is excluded from the process?
The Parliamentary Under-Secretary of State for Communities and Local Government (Nick Boles)
I thank my hon. Friend for her question, because that is an important point. In the very few cases in which planning authorities are designated as poorly performing, it will be possible for major applications to be referred directly to the Planning Inspectorate. After relentless questioning from her Liberal Democrat colleagues in Committee, I came to understand that it is particularly important that the Planning Inspectorate is given clear guidance that it should consider using local hearings, so that people can put their views across, rather more regularly than it does for appeals, when local views have already been taken into account. I have already started discussions with the Planning Inspectorate to ensure that that happens.
Joan Walley (Stoke-on-Trent North) (Lab)
T3. The Secretary of State is leaving the financial settlement for local government until the last minute, and there is great unfairness among the most deprived councils in the country. For example, in Stoke-on-Trent we are having to pay an extra £130.75 per person because of cuts, whereas in the Secretary of State’s own constituency the sum is £29.40. Will he take that into account in the financial settlement before he finalises it, so that there is fairness for local councils?
Mr Pickles
Of course there will be fairness in the system, but we need to understand that one reason why the hon. Lady’s authority is facing a larger cut than mine is that it receives a much larger amount. I think Labour expects my authority not only to contribute to the pot but to have its entire grant removed, and then it expects us to increase taxation. I remind her that it was Labour that left a number of vulnerable authorities dangling over a cliff edge and the coalition Government who put money into pulling Labour’s irons out of the fire.
Harriett Baldwin (West Worcestershire) (Con)
Villagers in Martley in my constituency are keen to develop their own neighbourhood plan, but the district council has told them that their alternative to a greenfield site might mean that both sites end up being developed. Will the Minister please clarify the situation for my constituents?
Nick Boles
It is obviously difficult for me to talk about an individual case, but I would be happy to hear more about it from my hon. Friend. It is important that neighbourhood plans strengthen the powers of local communities to determine where development should and should not happen. If the neighbourhood plan is in general conformity with the local plan, the neighbourhood plan’s policies will take priority and will help protect her constituents from unwanted development on speculative sites.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
T4. In towns and cities across England, local authorities are being forced to close museums, shut care homes and end library provision, but the Government found £250 million to empty the bins more regularly. What kind of abysmal, philistine, reactionary Government put dustbins above library books?
Mr Pickles
The people who are putting dustbins above those things are people who care about the general service provided to the electorate. The hon. Gentleman is a bit of a luvvie, so no doubt he is looking intensely at the drop in culture, but that is a matter for local decision, and he is wholly wrong. People should look at how an authority can get more money in by exploiting and using its cultural heritage. Frankly, he is just lining up a bunch of luvvies. He should listen a little bit more.
Philip Davies (Shipley) (Con)
A proposed housing development in Micklethwaite in my constituency was rightly rejected by Bradford council, the appeal was rightly rejected by the planning inspector and that decision was upheld by the Secretary of State. The courts have sent it back to him for redetermination. May I urge him to stick to his guns and reject that unwanted planning application? If he wants to come back to Micklethwaite to reacquaint himself with the area and see how inappropriate the application is, he will be welcomed by local residents.
Mr Pickles
I know Micklethwaite well, but we will consider the matter in a quasi-judicial way. We will ensure that the views of the residents of Micklethwaite and the council are given due weight, and I hope to announce my decision in the near future.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
T7. The Home Secretary recently refused to give me any information about the impact on local services, such as housing and community services, of the ceasing of the restriction on migration from Bulgaria and Romania. Does the Secretary of State have an estimate of how housing and other community services will be affected by that change?
Mr Pickles
As far as I am aware, we have only anecdotal evidence, which is not sufficient for someone of the hon. Gentleman’s stature.
Fiona Bruce (Congleton) (Con)
My constituents in Sandbach are furious that the Hind Heath road planning application, for 269 houses on prime agricultural greenfield land, has been granted on appeal. The pressures on road surfaces and infrastructure will be unsustainable, and the decision flies in the face of localism, as the area was not classed for development under the Sandbach town plan. Will the Minister explain how development on such a wholly unsustainable site can be justified and what can be done to ensure that further, similar applications by developers are not granted across my constituency?
Nick Boles
My hon. Friend has been a tireless advocate for the residents of Sandbach. She will understand that I cannot comment on particular cases, but I think it is fair to say that her local authority has been a bit backwards in coming forwards with a local plan. However, I am glad to say that, under its energetic new leadership, it has recently published a draft plan for public consultation, which will provide her constituents with a defence against speculative development.
Heidi Alexander (Lewisham East) (Lab)
T8. The Secretary of State will know that 17 fire stations in London have been earmarked for closure, including Downham in my constituency. Given those front-line cuts to emergency services, is it right that Boris Johnson’s 10 closest advisers have a combined salary packet of more than £1 million?
The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)
There is an integrated risk management plan for London. It is good that the London fire commissioner has said he is committed to maintaining the current standards for the time it takes for fire engines to get to incidents. Therefore, it will be a local decision based on local need, taking into account clear local risks.
Mark Pritchard (The Wrekin) (Con)
At this Christmas time, when many robins feature on Christmas cards, and given that the Secretary of State is Parliament’s pre-eminent ornithologist, can he tell the House what his Department is doing to protect Britain’s declining common bird population?
Mr Pickles
I think I am more of an undignified twitcher than an ornithologist. Clearly, there is the wildlife directive and we look to ensure the protection of various species, but we have to understand that in the nature of the way that agriculture and the like are changing, the patterns we have seen traditionally among British birds are likely to change in the decades to come. That will be to the benefit of some species and to the detriment of others.
Ms Karen Buck (Westminster North) (Lab)
Ministers have sent out a strong message to London councils that they should not be placing homeless households far outside the capital and away from their community network support and children’s schools. On Friday, however, I met a gentleman in employment who is being placed in Milton Keynes. Will the Minister tell me if it is acceptable for the gentleman to be placed in homeless accommodation and immediately lose his job, and if anyone is in charge?
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Don Foster)
We have recently introduced new rules that make it absolutely clear that local authorities have to ensure that the accommodation they provide is reasonable, and that they must take into account issues such as jobs and education.
European Council
(12 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Prime Minister (Mr David Cameron)
Before I make my statement, I am sure the whole House will join me in wanting to send our deepest sympathies to President Obama and the American people following the desperately tragic shootings in Connecticut on Friday. These are heartbreaking scenes. One can only imagine what the families are going through, and our hearts should go out to those families and the friends of all those involved.
Last week’s European Council discussed further economic and monetary integration for the eurozone. It endorsed new safeguards that will protect the interests of countries outside the eurozone. It also reached new conclusions on our response to the crisis in Syria, and there were discussions on growth and defence. This was the seventh European Council of the year. I would not describe it as a landmark Council, and I will try to address these points briefly.
The problems of the eurozone are driving heated discussions between its members and are leading to potentially significant changes inside the European Union. There are calls from some for greater solidarity and burden sharing, and from others insistence on tough rules for fiscal discipline. These arguments raise far-reaching questions of national sovereignty, and it is yet to be determined how far or fast the changes will go, but it seems likely that we will see a process of further integration for members of the eurozone.
Britain will not join the single currency—neither will we join the deeper integration now being contemplated—but these changes, driven by the eurozone, will alter the European Union for all of us, so they need to be done in the right way. That should mean flexibility over how Europe develops to accommodate the interests of all member states—those inside the euro, those that might one day join and those, such as Britain, that are outside, have an absolutely clear opt-out and have no intention of joining. It also means that as eurozone members make the changes they need, we in the UK will have the ability to argue for the changes that we need in our relationship with a changing European Union in order to get the best possible deal for the British people.
The banking union, elements of which were agreed last week, is a good example of that. A single currency needs a single system for supervising banks, so Britain supported the first steps agreed towards a banking union, but in return we and others demanded proper safeguards for countries that stay outside the new arrangements. The European Council therefore agreed a new voting system that means that the eurozone cannot impose rules on the countries outside the euro area, such as Britain, without our agreement. There is also an explicit clause that says that no action by the European Central Bank should directly or indirectly discriminate against those countries outside a banking union. That is vital for our financial services industry, which must continue to be able to provide financial products in any currency.
The Bank of England and the ECB will have a statutory memorandum of understanding that will ensure they work co-operatively and openly to supervise cross-border banks. The safeguards set an important new precedent in giving rights to countries that choose to stay outside the euro. In winning that argument, we have demonstrated how a change necessary for the eurozone can lead to a change for countries outside the eurozone that can help us to safeguard the things that matter to us in Britain, in particular the integrity of the single market. And as the eurozone makes further changes, I will seek every opportunity to get the best deal for Britain and for the single market as a whole.
On growth and competitiveness, this year we have already secured a proper plan, with dates and actions, for completing the single market in services, energy and digital, a commitment to exempt small businesses from new regulation, the establishment of a European patent court, with key offices in London, which will save businesses millions of pounds, and a new free trade agreement with Singapore. In addition, we have launched negotiations on a free trade agreement with Japan that could increase EU gross domestic product by €43 billion a year. The conclusions from the Council have the additional benefit of referring to Commission plans to “scrap” some of its own
“regulations that are no longer of use.”
We are taking action in Europe that will help with growth and jobs and with tackling unemployment here in the UK.
On defence, we are clear that NATO is the cornerstone of our defence and that EU co-operation should avoid costly new bureaucracy and institution-building. We will never support a European army. The focus of the Council conclusions is entirely consistent with this, referring to practical co-operation to tackle conflict and instability in places such as Kosovo and the horn of Africa. In addition, the conclusions welcome proposals to open up closed defence markets in Europe, which could be of benefit to Britain.
Finally, I turn to Syria. As a result of Assad’s brutality, a humanitarian crisis is unfolding in Syria on our watch, with more than 40,000 dead and millions in need of urgent assistance as a hard winter approaches. There is a moral imperative to act—and Britain is doing so, as the second-largest donor in terms of humanitarian aid—but there is also a strategic imperative to act. Syria is attracting and empowering a new cohort of al-Qaeda-linked extremists, and there is a growing risk of instability spreading to Syria’s neighbours and of drawing regional powers into direct conflict.
We therefore cannot go on as we are. The Council was clear, as Britain has been for many months, that Assad’s regime is illegitimate, and committed to working for a future for Syria that is democratic and inclusive, with full support for human rights and minorities. We will continue to encourage political transition from the top and to support the opposition, who are attempting to force a transition from below, and that will include looking at the arms embargo. The conclusions also make it clear that we must now explore all options to help the opposition and to enable greater support for the protection of civilians.
With progress on Syria, our objective on banking union secured and the principle established that changes in the eurozone require safeguards for those outside, I commend this statement to the House.
Edward Miliband (Doncaster North) (Lab)
I join the Prime Minister in sending deepest condolences to President Obama and the people of the United States. The Connecticut shooting was an appalling tragedy, and all families affected are in our thoughts as they cope with their grief and their loss.
I wish to ask questions on Syria, the banking union and the wider European context. Let me associate myself with the Prime Minister’s concern about the ongoing loss of life in Syria. The international community must work together to end the atrocities immediately and speak with one voice in favour of a transition to a new Government. The Prime Minister mentioned the arms embargo, while noting that Syria is attracting “a new cohort of al-Qaeda-linked extremists.” In that context, will he go further and tell the House whether he is actively urging the EU to end its arms embargo, or merely amending its terms? Notwithstanding deep concern in the international community about the situation in Syria, does he recognise some of the dangers inherent in the approach of putting weapons into a zone in which there is already deep conflict?
On the banking union, the Opposition believe it is right for the European Central Bank to have a supervisory role in the eurozone. Does the Prime Minister agree, however, that the most important issue is not necessarily who supervises which banks, but who takes responsibility for bailing out failing banks in the euro area? That is what will deliver the firewall we need between bank and sovereign risk. Will he say whether he made the case for the urgency of agreement on that matter at the Council?
It is good that progress was made to protect the integrity of the single market. Will the Prime Minister say whether there was discussion on how the new voting system that he mentioned will cope in the event of changing circumstances, and in particular if EU members currently outside the eurozone join the banking union and the “out” group shrinks to three or four member states? Beyond questions of banking, is not the real continuing problem for Europe that of insufficient demand and lack of a proper plan for growth? In yet another Council we saw no progress on that, just as we saw no progress beyond banking union on wider eurozone political and economic integration.
All the Council did was set a timetable of June 2013 for setting a timetable. That is less than was promised—in other words, dither and delay. It is a bit like the Prime Minister’s long-awaited speech on Europe, which has been delayed again. First it was set for his party conference, then for before the EU budget negotiations. We now hear that he has delayed it again until the new year.
Of course, never knowingly undersold in his normal modest way, the Prime Minister says that it is okay because it is
“a tantric approach to policy making.”
Parliament’s answer to Sting sits before us, Mr Speaker. It is true that they have both fallen out with the police—[Interruption.] I am sorry; it is Christmas after all. I am sure I speak for the whole House when I say that none of us wants to be there to witness the tantric approach.
Perhaps the Prime Minister will answer three simple questions. First, the Foreign Secretary, who is sitting on the Front Bench, said on an in/out referendum that
“this proposition is the wrong question at the wrong time…It would create additional economic uncertainty in this country at a difficult economic time.”
I agree with the Foreign Secretary—does the Prime Minister? Secondly, the Prime Minister said last week:
“I don’t want Britain to leave the European Union.”
I agree with the Prime Minister on that, but why does he let member after member of his Cabinet brief that they are open to leaving the EU, including most recently the Education Secretary? Thirdly, as the Prime Minister will know, British business is deeply concerned that the drift in his party and the direction of his policy means that we are sleepwalking towards exit. I share that concern. Does the Prime Minister at least understand the concern of British business?
The Prime Minister ended last year with the veto that wasn’t, and he has ended this year with the speech that isn’t. In other words, he is stranded between party interest and national interest. The problem, however, is that nobody else in his party is holding back. Just in the past few days we have heard from the Immigration Minister, the former Defence Secretary, and now—always keen to help the Prime Minister out—the man on the zip wire, the Mayor of London. Is it not time to stop the dither and delay? Is it not time that he stopped following his party on Europe and started leading it?
The Prime Minister
Well, the jokes were better. The right hon. Gentleman has obviously spent a bit of time running through his old Police albums. Given his policy on Europe, I would recommend, “So Lonely”, and given his general approach to policy, he is going to have to get used to “I can’t stand losing”. [Interruption.] That was the best I could do given the notice. He should give me more warning next time—[Interruption.] Don’t stand so close to me—very good. The bed’s too big without you—[Laughter.] Let’s take this down.
On Syria, it is right to look at amending the arms embargo. We will be keeping the arms embargo on the regime. There are arguments on both sides, but we should have the debate and European Foreign Ministers will do so. My concern is that if the UK with others is not helping the opposition, and helping to shape and work with it, it is much more difficult to get the transition we all want to a peaceful, democratic Syria that respects the rights of minorities—including, as I have said, Christians—and human rights.
On banking union, the right hon. Gentleman rightly makes the point that the protections are set out when more than four members are outside the banking union. The new double majority voting is a big breakthrough. The idea that non-eurozone members should have a separate vote on proposals that could be damaging to us is a major breakthrough, and a lot of people said it would not be possible. If the number of countries outside the banking union falls below four, the issue returns to the European Council, where, of course, we decide things by consensus and would be able to put a stop to further progress.
The right hon. Gentleman makes his points on growth, but ignores completely that almost every country around the table has immense fiscal challenges and huge budget deficits. That is why we focus so much on the things that could help growth in Europe, such as the single market, free trade deals with other parts of the world, deregulation and getting costs down, and a good budget deal.
The right hon. Gentleman asked a series of questions on European positions. I do not think it is right to hold an immediate in/out referendum because neither of the two options is right. That is exactly what the Foreign Secretary has said.
On British business, the Conservative party and the Government are working to deliver all the things business has asked for. I note that, when the Opposition business spokesman was asked to name one single business that supported Labour, the best he could come up with was Waheed Alli, whom Labour ennobled about a decade ago.
On European policy, I will not take lectures from a party that signed up to the bail-out, gave away our veto and gave up the social chapter—on each occasion, it got absolutely nothing in return. That is the truth of the Labour policy, whereas the Conservative party and the Government have delivered. Three months ago, before the three European Councils, we were told, “You’ll have no allies on the European budget, you have no chance of amendments to the banking union, and you’ll be completely isolated on treaty change.” All three warnings given by the Leader of the Opposition and others have turned out not to be true.
Mr William Cash (Stone) (Con)
My right hon. Friend says that the EU changes must be done in the right way. At Prime Minister’s questions last Wednesday, he stated in reply to me that
“it is the national parliaments that provide the real democratic legitimacy within the European Union.”—[Official Report, 12 December 2012; Vol. 555, c. 291.]
However, how is it that, in the European conclusions he signed on Friday, and despite a unanimous European Scrutiny Committee report calling on him to stand firm, the national Parliaments and the European Parliament are stated as being commensurate in respect of EU competences?
The Prime Minister
I should again make the point I made to my hon. Friend on Wednesday. Change in Europe cannot go ahead unless it has the support of national Parliaments. Clearly, the European Parliament has a role set out in the treaties—whatever one thinks about that, one cannot ignore it. When it comes to changes in the eurozone, Angela Merkel going back to her Parliament matters; when it comes to the European budget, my coming back to this Parliament matters. That was my point. In Europe, the Parliaments that matter are the national ones—this is the Parliament that matters to me.
Mr Alistair Darling (Edinburgh South West) (Lab)
I agree with what the Prime Minister said about the banking union. Like so many other things coming out of the eurozone, it looks a bit half-baked at the moment. Did he get any sense of how much money the banking union will have, and where it will get it from? Did he also detect any urgency being applied to sorting out the Spanish banking problem? It looks as though all the problems that have bedevilled us in 2012 are still going to be there in 2013.
The Prime Minister
The right hon. Gentleman makes an extremely good point. This is not a fully fledged banking union; it is simply the first step in terms of a single supervisor. A banking union as we in the United Kingdom would know it would cover the resolution of problems in banks and deposit guarantees. If a bank in England, Scotland, Wales or Northern Ireland has problems, it does not make any difference because we have a proper banking union. They are a long way from that in the European Union. The point I was making is that these discussions are going to go on for quite some time, because they involve big issues of national sovereignty, so it will take time before they get a banking union.
Mr John Redwood (Wokingham) (Con)
If we are to have growth in Europe, we need to have banking reform both to recapitalise the banks and to write off the bad loans and assets. Is there any timetable for raising the huge sums that the euro area will need to capitalise its banks, and when is the ECB going to make the Spanish and other weak banks in the system write things down to a realistic level so that we can start to trade away from the disaster?
The Prime Minister
My right hon. Friend asks an important question, which reminds me that I did not answer the former Chancellor’s question about the Spanish banks. There will be opportunities to deal with that, but in the light of the way in which this is being structured, further progress will need to be made under the banking union proposals before the sorting out of Spanish banks can take place. Many in the eurozone would argue that all those delays are damaging to the future of the eurozone. On bank recapitalisation, stress tests have been carried out in Europe, although some people argue about their robustness, but that was not the focus of discussion on this occasion. This was not so much about banking capital as about the process of a banking union.
Mr Jack Straw (Blackburn) (Lab)
May I ask the Prime Minister to expand a little on his view of the process towards a democratic, inclusive Syria, given that, although probably 70% of Syrians are wholly opposed to the Assad regime, about 30%—Christians, Alawites and others—are still committed to it? What further efforts are being made with the Russians to try to secure international agreement, however difficult that might be, given that Russia’s compliance and consent will be crucial to an overall settlement?
The Prime Minister
The right hon. Gentleman is absolutely right about this. As I explained in my statement, there are two ways in which transition can take place in Syria. One would involve revolution from below, if you like, while the other—which could be faster if everything went according to plan—would involve a transition from the top, and for that, we need the Russians to engage. My right hon. Friend the Foreign Secretary has met and spoken to them regularly, and I have discussed the issue with President Putin. There was a report on Thursday, while we were in the European Council, that the Russian Deputy Foreign Minister had made some interesting remarks about Syria, so we will read those with care. Clearly, everything we can do at the UN and with countries such as Russia to put pressure on the Assad regime is worth while.
Simon Hughes (Bermondsey and Old Southwark) (LD)
Is not one of the lessons from the seven summits of 2012 and the successes of the year—the banking union that keeps our financial services industry protected, the patent deal that will probably reduce the cost of getting European patents by 80%, and the trade deals with Singapore, South Korea, Latin America, Japan and the US that are in the pipeline—that constructive and pragmatic engagement with our neighbours in the European Union is good for the UK, good for Europe, good for growth and good for jobs?
The Prime Minister
I would agree with a lot of what my right hon. Friend says. I would add to “pragmatic engagement” the words “hard-headed”, because in order to make progress on issues such as the patent court and the single market, we need to negotiate very toughly. These are our key interests, and other countries have their own. Across the seven Councils, we have made some progress.
Mr Dennis Skinner (Bolsover) (Lab)
Is it conceivable that the reason the Prime Minister cannot make his European statement that his Deputy Prime Minister thinks just the opposite of what he thinks? Is there any chance, now that they have started the practice, not only of the Prime Minister making a statement but of his allowing the Deputy Prime Minister to make one as well? I know it is nearly Christmas, but I am not against turmoil in the Tory party or in the coalition.
The Prime Minister
Let me wish the hon. Gentleman a happy Christmas. He is a good example of how there is not always a commonality of opinion within a party, let alone between two different parties.
Richard Ottaway (Croydon South) (Con)
The events of the past few months have confirmed that Britain has a number of allies in Europe and is not alone, but the case for Europe is drifting. Will the Prime Minister take an early opportunity to get on the front foot and set out his agenda before others fill the vacuum?
The Prime Minister
I am very happy to do that. My hon. Friend is right that we have allies in Europe. I note that in this morning’s German newspapers, the leader of the Social Democrats—Labour’s sister party—has accused me of having a Faustian pact with the German Chancellor, so there we have it. We have a very clear agenda: we have been pushing the single market, pushing for the patent court, pushing for the free trade deals, pushing for deregulation, and on every single one of those measures we have made some big progress this year in Europe.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
The Office for National Statistics reported last week that the GVA—gross value added—output in the communities I represent in west Wales and the valleys is only 65% of the UK average. A cut in European structural funding would therefore be disastrous for the communities I represent. Will the Prime Minister assure my constituents that the British Government will make up the shortfall in funding for them, based on the British Government’s negotiating position on the EU budget?
The Prime Minister
I will certainly look carefully at what the hon. Gentleman said before we return to the European budget issues in February. Frankly, however, if we want a good deal for Britain in terms of the level of payments we make, we have to accept the fact that in an enlarged European Union—and we support enlargement—we are going to see a greater percentage of those structural funds go to the relatively poorer countries of eastern and southern Europe. I think we have to understand that when we take part in the negotiations.
Mark Field (Cities of London and Westminster) (Con)
On the issue of banking union, I wholly endorse the Prime Minister’s view that we were able to secure in Brussels the very best deal in the circumstances. Will he confirm, however, that the double majority arrangements now set some sort of precedent for the two-speed Europe that many believe is in the UK’s national interest—on this and related matters?
The Prime Minister
I would make two points in response. I believe it is possible to have different countries involved in different things within the European Union. I do not particularly like the expression “two-speed”, which implies that one is racing ahead and the other is not, yet in many cases I would argue that not being in the single currency is beneficial for Britain, and not being in the no-borders agreement is right for Britain. My hon. Friend is absolutely right to say that this was a breakthrough negotiation, showing it is possible to have a new set of rules to safeguard those countries that want to stay outside some European institutions.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
I am sorry, but may I press the Prime Minister on his long-awaited European speech? I really do not think he has got it clear. Is it not happening because he does not yet know what he wants to say, or because he is not allowed to say what he wants to say?
The Prime Minister
I will be making the speech in the middle of January—[Hon. Members: “Ah!”] I am delighted that Opposition Members are so excited and are looking forward to it. The hon. Lady might have noticed that I have had a number of other things to attend to in recent weeks, but I have a feeling—knowing her views and the moves she has been making over the years as I have watched her in the House—that she may quite like it.
Andrea Leadsom (South Northamptonshire) (Con)
I congratulate the Prime Minister on the ground-breaking deal for Britain’s financial services that he struck in Europe. Does he agree that it is astonishing that Labour Members seem to think it is simply a case of “in or out, and why don’t you get on with it”, when it is far more important to negotiate a better deal for British taxpayers? My right hon. Friend is absolutely on the right track.
The Prime Minister
I thank my hon. Friend for her question. I should say that the banking union agreement was negotiated not by me but by the Chancellor of the Exchequer. He deserves the credit for the 5 am finish in the negotiations, which safeguarded Britain’s interests. My hon. Friend is right in what she says.
Chris Bryant (Rhondda) (Lab)
I warmly congratulate the Prime Minister—[Interruption]—it’s all right, don’t worry—on supporting, last week, a step change in the development of a common defence and foreign policy for the European Union, especially as we are in the run-up to the EU Russia summit on Friday. Does it not make sense for Europe to approach, in particular, the Russian Federation with a single set of core objectives, so that we can see a successful set of outcomes? When the Germans or the French have negotiated on their own, everyone has ended up with a bad deal. Now that the Americans have introduced a Magnitsky Act, is it not time that we did the same in this country?
The Prime Minister
What I would say to my— [Laughter.] I am sorry; there is only so much excitement that one can take in a single day. What I would say to the hon. Gentleman is that I think that one of the worthwhile aspects of our engagement in Europe is the ability to discuss issues—whether they relate to the situation in Syria or to relations with other powers—and try to reach common positions that maximise the influence that we then have. I think it important for the discussions to be held on the basis of unanimity. We do effectively have a veto in this area, but when we can agree, as we did on Syria and Iran, there can be very powerful consequences.
Mr Edward Leigh (Gainsborough) (Con)
When will the British people be given their democratic right, namely a choice in a referendum between being part of a customs union and being part of a European Union?
The Prime Minister
My hon. Friend has made a very good, very clear case. He has always held that view. I shall set out in my speech in the middle of January the path that we should take for the future, but let me say now to Members in all parts of the House that, as I tried to explain in my statement, what is happening at present in the European Union is a process of change, driven by what is happening in the eurozone. As a number of Members have pointed out, it is quite a slow process at the moment, but I believe that at some stage it will speed up radically. When we discover that we really do need greater elements of banking union, fiscal union and other co-ordination, a greater treaty change will be proposed within Europe, and I think that that will give us an opportunity to secure the fresh settlement that we want.
Mike Gapes (Ilford South) (Lab/Co-op)
Is there still an EU arms embargo? It has been reported that France is already supplying equipment to some opposition groups, and at the same time this country is providing non-lethal equipment. What exactly is going to happen? What kind of equipment will we be providing? Given that Qatar and Turkey are already arming the more extreme jihadist groups, is this an argument for rebalancing within the Syrian national coalition?
The Prime Minister
The hon. Gentleman has made a number of important points. On the first part of his question, I have seen no evidence that any European Union powers have broken the arms embargo. We certainly would not do that; it would be wrong and illegal. I think it is worth looking at the embargo and asking how we can best work with the parts of the Syrian opposition that want a proper transition to a free and democratic Syria. The hon. Gentleman made that point in his own question.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
May I commend my right hon. Friend on his determination not to wreck his Christmas by trying to write a speech on the European Union at the same time?
My right hon. Friend said that we had
“agreed a new voting system that means that the eurozone cannot impose rules on the countries outside the euro area, such as Britain, without our agreement.”
Will he confirm that, in saying that, he did not mean that the treaty had been rewritten, or that the single market article was now subject to a different voting system, so that anything agreed by the banking union could still be put forward by the Commission as a single market proposal to be forced through on a single qualified majority vote?
The Prime Minister
I greatly respect my hon. Friend’s views on and knowledge of this issue. I was not claiming that we had changed the treaty. The point that I was making was that a number of people in the European Union, including the Commission at one stage, had said that it was impossible to write new rules to deal with circumstances in which some were in the single currency and some were outside it, but we had persevered. We said “If you want to go ahead with banking union, this really is essential”, and that is why there is effectively a new system. If more than four countries are outside the banking union, there must be a double majority in favour of a proposal: a majority of those outside, and a majority of those inside.
I am not claiming that we have rewritten the treaties, or that this is a new treaty change; it is not. However, I think that it is a step forward to deal with a deep problem that Europe will have as the single currency integrates further and those outside it want to ensure that they are properly protected.
Kelvin Hopkins (Luton North) (Lab)
I am one of those who very strongly take the view that Greece, Spain and Italy can recover economically only if they leave the euro and recreate their own currencies and have their own interest rates. Was there any private discussion about the effect of the imminent departure of Signor Monti and the re-entry into front-line politics of Signor Berlusconi on the future of Italy in the euro?
The Prime Minister
There was not any open discussion about that issue, although I understand that Signor Berlusconi was in Brussels on the day of the European Council. My view is that these are issues for the countries in question. We can all have our views about the economic position of these countries, or indeed the political choices they make, but in the end, if we believe in democracy, we have to allow the Greek, Italian and Spanish voters to elect Governments who reflect their views. That is the way it has to work.
Mr Robert Buckland (South Swindon) (Con)
I warmly welcome the commencement of free trade talks between the EU and Japan. That is of vital importance to Honda workers in my constituency, and does it not also demonstrate the continuing importance of our membership of the EU in extending free trade across the world?
The Prime Minister
My hon. Friend makes an important point, and I very much enjoyed visiting the Honda plant in his constituency and hearing for myself how important the people there believe a free trade agreement with Japan would be. The automotive industry in Britain is a success story. Honda, Nissan, Toyota and Jaguar Land Rover are all doing well. They are doing well because of the highly trained and motivated work force here in Britain, of course, but also because we are members of the single market and have the ability to sell into Europe. We should remember that.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
The Prime Minister has said his policy on Europe is modelled on the “tantric” approach. Given the different, and increasingly bizarre, positions of some members of his Government on Europe, can he confirm that his final speech will be based on the “Kama Sutra”?
The Prime Minister
In my defence, my remarks were spontaneous and made in an unwritten speech, whereas the hon. Gentleman actually planned those comments.
Jacob Rees-Mogg (North East Somerset) (Con)
I should like to reassure the Prime Minister that for the sake of consistency we had a toast to him in Somerset at the weekend, but I am afraid there is a “but” on this occasion, which is that agreement to the single supervisory mechanism was by unanimity, but the rules for voting on the European Banking Authority can be changed by qualified majority voting. I therefore wonder whether the Prime Minister has got enough from these negotiations, and whether we ought to repatriate financial services regulation powers.
The Prime Minister
My hon. Friend makes an important point, but I am not sure that I agree with him. The banking union changes went through under a treaty article that requires unanimity. That was good for Britain, because it gave us the ability to insist on the changes we needed and to get the safeguards we wanted. I believe, however, that the single market, and qualified majority voting on the single market, has helped to deepen and develop that single market. That is why Margaret Thatcher passed the Single European Act through this House. We want to have an effective single market in financial services. This country has 40% of Europe’s financial services industry, and we have to fight for it and build alliances for it. There are often frustrations in doing so, but having a single market in financial services is good for Britain.
Nia Griffith (Llanelli) (Lab)
Some very important decisions will be taken in the EU over the next couple of years, but the Government’s review of the competences is not expected to report back in full until 2014. How will that impact on the UK’s current negotiating position?
The Prime Minister
The hon. Lady asks an important question, but I think the timing is relatively helpful. It is sensible for Britain to have a balance of competences review, given how long we have been a member of this organisation. Let us go through the areas of competence—those inside and those outside the European Union—and ask in each case whether we benefit, what the problems are, and what the potential opportunities are, and reach a proper view about them. That will inform the decisions we make as the EU develops. As I have just argued, I think the real changes in the EU will not come in the next year. As the Leader of the Opposition said in his response, the time-bound road map still has quite a long way to run, and such road maps have a habit of not entirely sticking to the time set.
Sir Tony Baldry (Banbury) (Con)
Does my right hon. Friend agree that the explicit protection for the single market agreed at the European Council makes it easier for those countries that want to have closer integration to integrate and those that want a looser relationship with Europe to have one?
The Prime Minister
My hon. Friend makes an important point. What I have spotted over the past seven European Councils is that although to begin with, I was the lone voice always going on about the integrity of the single market—I have a bit of a reputation, dare I say it, for boring on about it in European Councils—a number of other European leaders, including Mario Monti, now see the importance of talking at all stages about safeguarding the integrity of the market.
Wayne David (Caerphilly) (Lab)
Does the Prime Minister plan any tantrums or walk-outs from European Council meetings in the near future? Or will he give a commitment to be there at all times, ensuring that he upholds the British national interest?
The Prime Minister
I am always there upholding the national interest. I have never walked out of a room, but I have on occasion said no and I think that is sometimes the purpose of a Prime Minister.
Mrs Anne Main (St Albans) (Con)
My right hon. Friend said in his statement that there are “questions of national sovereignty” and that this will “alter the European Union for all of us”. Are there any debates in public about this newly created eurozone? What animal will be created and what national sovereignties will be lost? We need to know the being of which we are part.
The Prime Minister
The point I would make to my hon. Friend is that there are clearly lively and vigorous debates in eurozone countries, because they are at the sharp end and can see absolutely that there is a battle over national sovereignty, how much say they will have over setting their own budgets and how much of those budgets will be determined by the European Commission. Part of what was discussed by the eurozone at the Council was effectively a set of future contracts whereby countries might have to enter into a contract with the European Commission about their future budgets. There is a very live debate in those countries. We are not in the eurozone, so we are not affected by those contracts, but my argument is that change in the eurozone has knock-on effects for the organisation of which we are a full member and that is why it is so important for us to consider these issues.
Mr Ronnie Campbell (Blyth Valley) (Lab)
But when will the Prime Minister ask the European Council to investigate widespread and endemic corruption in the European Union, as well as endemic fraud, the fact that billions are being thrown down the drain and that accounts have not been signed off for 18 years? What sort of organisation is that to come to us, the British people, and ask us to pay more money in to it?
The Prime Minister
I have a lot of sympathy with what the hon. Gentleman says. Europe has been too loose with its money: it has not been properly audited and there has been too much fraud and, as he says, potentially corruption. On the budget negotiations, the European Commission is having to accept for the first time that its ambitions for spending in Europe are completely unrealistic, not only for spending on programmes, but, as it is beginning to see, for spending on itself, too.
Mr Peter Bone (Wellingborough) (Con)
I congratulate the Prime Minister on putting off his speech about Europe. It is clear to me that it is a most important speech and it is better to put it off and get it right. We had a little hint today, Mr Speaker, when he said for the first time that he was against an immediate in/out referendum and I think the British people can wait until January for their Christmas present.
The Prime Minister
I am not sure that I will be able satisfy my hon. Friend or, indeed, the other members of his household, but I will try my best. As I have tried to explain this afternoon, the change process in Europe requires some tactical and strategic patience in the UK to see how that change will pan out so that we can get our response to it right. That will be the time at which we will have the maximum amount of influence: when Europe is making big changes itself.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
In answer to a previous question, the Prime Minister said that he is in favour of the expansion of the European Union. How big does he want the European Union to get and what are the implications for the movement of populations across Europe?
The Prime Minister
I would argue in favour of, as some would put it, a Europe that extends from the Atlantic to the Urals and includes all those countries that are currently applying, such as the countries of the western Balkans—I would very much like to see Macedonia and others become members of the European Union. One of the European Union’s greatest successes has been that countries wanting to join have entrenched their democracy and their belief in open and free markets. It has been a very successful policy in that regard. Britain has always argued for enlargement and we should continue to do that. We should always put in place transitional controls, which I am afraid the last Government failed to do.
Martin Horwood (Cheltenham) (LD)
Many Syrians will welcome robust European support for the mainstream opposition, but will the EU, like the UK Government, urge the involvement of Kurdish as well as Alawite Christian and other minorities in opposition councils? That seems vital for future peace.
The Prime Minister
My hon. Friend makes a vital point; we should be encouraging an inclusive transitional authority, as we have done in all the meetings of my right hon. Friend the Foreign Secretary and the Friends of Syria group. The Kurds have now joined the Syrian national coalition.
Mr Jim Cunningham (Coventry South) (Lab)
I noticed that in the Prime Minister’s statement nothing was said about recent events between the Israelis and the Palestinians. Was there any discussion of that situation, particularly about sanctions, and more importantly, the two-state solution?
The Prime Minister
There was not a specific discussion at the Council of the middle east peace process. We were focused particularly on Syria; there was also a discussion about future enlargement. There was not a big discussion about the middle east peace process. Our position is clear, as the hon. Gentleman knows; we support the two-state solution and everything we do should be encouraging it to come about.
Dr Julian Lewis (New Forest East) (Con)
Talking about membership of the European Union, did the Prime Minister pick up, although no doubt it was not on the formal agenda, whether or not an independent Scotland would have to reapply to join, and if so, whether it would have to join the euro?
The Prime Minister
My hon. Friend makes an important point. There was no formal discussion, but the issue was discussed in the margins, as it were, because a number of countries take an interest in it. The letter from José Manuel Barroso is pretty clear: Scotland would have to apply to join the European Union. Obviously, Britain is the only country that has a legal, binding, copper-bottom opt-out from the euro. All the other countries, by and large, are committed to join the euro—[Interruption.] And Schengen, as the hon. Gentleman says. That is important for the Scottish debate.
Paul Flynn (Newport West) (Lab)
The Prime Minister said that Syria is attracting and empowering elements linked to al-Qaeda, presumably to help the Government side. What evidence does he have for that?
The Prime Minister
Tragically, the elements that are linked to al-Qaeda are actually linked to elements of the opposition. There is strong evidence that groups such as the al-Nusra front take an unacceptable view about Islamic extremism. There are very real concerns about the issue, which lead to the argument about how involved we should get with the Syrian opposition. There is a strong argument that by being more involved with like-minded allies we could try to support the elements of the Syrian opposition that most want to see a free, democratic and inclusive Syria.
Mr John Baron (Basildon and Billericay) (Con)
Given the push for ever-closer union in the eurozone, does the Prime Minister believe that the status quo for Britain—outside the eurozone but inside the EU—has a viable long-term future?
The Prime Minister
The short answer is yes. The European Union is going to have to manage with some countries that are in the eurozone, some countries that are not in the eurozone and are pretty unlikely to join for a pretty considerable time and some countries, such as Britain, that in my view will never join. When we look at opinion polls in the Czech Republic or Sweden, or in some other countries outside the eurozone, there is no sign of them joining the euro any time soon, so Europe will have to manage in that way. My argument is that it needs to be flexible now, and perhaps even more flexible in the future, so that all countries can be content with the membership they have.
Kevin Brennan (Cardiff West) (Lab)
When the Prime Minister finally delivers his long-delayed speech on Europe, will it be the policy of the UK Government that he sets out, or will it be the policy of part of the UK Government excluding the Education Secretary, the policy of part of the UK Government excluding the Liberal Democrats or the policy of part of the Conservative party—or will it just be his own personal opinion?
The Prime Minister
I am so pleased the hon. Gentleman is looking forward to my speech. He will obviously read it very closely, which will be worth while. Clearly, this country has some choices to make about Europe within this Parliament, and we have already made some big choices. We have said no to more powers being passed from Westminster to Brussels, and unlike the previous Government, there have been no powers passed. We have said let us get some powers, such as the bail-out powers, back from Brussels, and we have got those back. We have said let us get a better financial deal, and I am confident that we will get a far better financial deal than anything negotiated by the Opposition. But of course there will be a choice for all political parties, the hon. Gentleman’s included. As the eurozone changes, as Europe develops, there will be a choice to make in the run-up to the 2015 election to set out how we are going to take the British people with us to make sure that we get the best future for Britain in Europe.
Philip Davies (Shipley) (Con)
After the last European Council, the Prime Minister indicated that he favoured an in/in referendum. Further to the point from my hon. Friend the Member for Wellingborough (Mr Bone), in reply to which the Prime Minister seemed to oppose an immediate in/out referendum, may we take it that he now supports an in/out referendum, perhaps in the next Parliament? If he does introduce that policy, I can assure him that he will have a great deal of support from those on the Government Benches and also from the public at large.
The Prime Minister
I am grateful, as ever, for my hon. Friend’s advice, which is always candid and straightforward. I will make sure that he gets a copy of my speech in the middle of January and he will able to study it closely.
Mr William Bain (Glasgow North East) (Lab)
The Council conclusions call upon member states to pursue “growth-friendly, fiscal consolidation”. Does the Prime Minister accept that with our economy shrinking this year, the eurozone economy predicted to shrink next year, and 25 million people across the EU out of work, the plan is not working over there and it certainly is not working here?
The Prime Minister
I think the reference to growth-friendly consolidation is right. That is why, for instance, in the autumn statement, we have put more money into capital spending in the immediate years, and also taken some difficult decisions on welfare spending—decisions which I know the hon. Gentleman’s party is unprepared to support—to make sure that we can focus on those things that will help with growth. But when we look across Europe, we can see that because we set out a long-term plan for getting on top of the problems in our public finances, we are able to take it in reasonable stages and at a reasonable pace—one of the advantages of not being trapped in a system where we are told what to do by the European Commission.
Richard Drax (South Dorset) (Con)
I refer the Prime Minister to an earlier question about certain countries adopting their own currencies. He said that if we believe in democracy, the right decision will be made. Does he agree that there is no democracy in this federalist state at all? Does he also agree that true democracy can only be the repatriation of all the powers to sovereign countries?
The Prime Minister
The point that I was trying to make in response to the earlier question is that we have to respect the outcomes of elections in other countries. In Greece elections have been held. In Spain elections have been held. We may think that those countries have taken the wrong decisions with respect to the euro or whatever, but those are decisions for them to take, not for us to take. We in this country, through this House of Commons elected by the British people, should determine the right approach for Britain, but I do not think it is possible to say that we have a right in this House to decide the right approach for Greece, Spain or Italy. We may have strong views, but the idea that we can go to the European Council and just tell all those people that they are not listening properly to their own publics is incredible.
Toby Perkins (Chesterfield) (Lab)
Is it not the reality that the Prime Minister has not made his long-awaited speech because he is the head of a party that is entirely ungovernable on Europe?
The Prime Minister
No, I completely disagree. The Conservative party’s position is absolutely in line with the position of the British public, which is that we know we need to be in the single market because we are a trading nation and our businesses benefit and our economy benefits from that, but we are not happy with every element of our membership of the European Union. Unlike the Labour party, which just caved in, gave in on common agricultural policy reform, gave in on the rebate, gave in on the bail-out, we are prepared to stand up and get what we want.
Mr Jonathan Djanogly (Huntingdon) (Con)
Reform, for most EU states, seems to be focused on banking reform, but for many of us this extends to cutting waste and spending, CAP reform, and repatriation of powers—all things which will certainly be thrown into the reckoning in an in/out referendum or indeed any kind of referendum, so could my right hon. Friend explain how these wider issues are being addressed by the European Council members?
The Prime Minister
In terms of the UK, I think that the balance of competences review is a good exercise for looking at all our engagement with Europe and its costs and benefits. Within the European Union, all those issues are addressed and different countries come to different conclusions. We should not be frightened of standing up and saying very clearly what we think is in Britain’s interests.
Mr Speaker
I fear that the Annunciator is rather over-excited. I can assume only that it has not yet become accustomed, as I have not, to the spectacle of the hon. Member for Shipley (Philip Davies) using an iPad in the Chamber. It is quite a remarkable state of affairs on which he is, of course, to be congratulated.
Huw Irranca-Davies (Ogmore) (Lab)
I ask the Prime Minister: on actual, tangible economic growth, how is it going?
The Prime Minister
In the last quarter the British economy grew by 1%, the fastest growth of any major country in the European Union. Clearly, though, right across Europe there are immense growth challenges. The eurozone is back in recession. What we see with the British economy, despite all the difficulties, is that there are over 1 million extra people in private sector jobs compared with when we came into office.
Henry Smith (Crawley) (Con)
A few weeks ago I held a conference with my local small and medium-sized enterprises, along with UK Trade & Investment, focusing on increasing exports. Will my right hon. Friend say a little more on how he has been able to protect small and medium-sized enterprises from unnecessary and burdensome European regulation?
The Prime Minister
What we have managed to do is get the European Commission not only to instruct—it is quite fond of doing this—other European countries to look at deregulation, but to look at its own rules and regulations. I think that it is quite striking that the communiqué, the Council conclusions, actually uses the word “scrap” in relation to some European regulations, particularly those that are no longer of use. The Europe Minister, who is sitting next to me, is gesticulating because he knows that getting the bureaucrats in Brussels to use a word like “scrap” is an achievement.
John Cryer (Leyton and Wanstead) (Lab)
Will the process of increasing centralisation and integration, which the Prime Minister mentioned at the beginning of his statement, lead inevitably to a loss of democratic accountability, and what future implications will that have for the security of democracy in many western European countries?
The Prime Minister
I think that the hon. Gentleman makes an important point. It is for those countries that are contemplating that integration and that loss of sovereignty to answer that question. I would not be comfortable with it, as someone who believes in the importance of national Parliaments, national democracy and national decision making, but it is for Greek voters and politicians and Spanish voters and politicians to have that debate themselves. Are they content to give up that much sovereignty in return for a single currency that works? That is their decision. We can all have our views on that, but we have to allow them to make that determination. The point I would make, having attended these things for two and a half years, is that we should not underestimate the sense of mission that those European countries and leaders have about their own currency and wanting to make it work.
Mr Julian Brazier (Canterbury) (Con)
In supporting my right hon. Friend’s struggle for British interests and, in particular, his identification of the crisis in the eurozone as the key driver for change, may I urge him to put free movement of labour at the top of the issues for potential renegotiation because, as a number of Members on the Government Benches, including the Front Bench, have pointed out, it might not be only the recent entrants with whom we have problems if the crisis in southern Europe worsens over the next year or two?
The Prime Minister
I will look carefully at what my hon. Friend has said. Clearly, the freedoms of the European Union—the freedom to trade, free movement of capital and free movement of people—have all been important in trying to deliver the economic growth and success we want to see. I will make two points. First, when new members have joined we have been able to put in place transitional controls, and in my view we should always do that. Secondly—this was examined when there was a greater sense of crisis in the eurozone—there are rules that can be invoked in a time of crisis if we need to abrogate those freedoms in some way.
Gavin Shuker (Luton South) (Lab/Co-op)
Can the Prime Minister ever imagine Britain leaving the EU?
The Prime Minister
That is not a position I support, so I do not spend my time thinking about it, but clearly all futures for Britain are imaginable—we are in charge of our own destiny and can make our own choices. I believe that the choice we should make is to stay in the European Union, to be a member of the single market and to maximise our impact in Europe, but when we are unhappy with parts of the relationship we should not be frightened of standing up and saying so. As I have said, we have got out of the bail-out power. I think that we made a mistake joining the social chapter. We should be prepared to have these discussions. The fact that we are not in the Schengen agreement is not a disaster for Britain; it is a bonus for Britain. The fact that we are not in the single currency is not a disaster for Britain; it is a bonus for Britain. That is the sort of Europe we should be pushing for.
Mark Pritchard (The Wrekin) (Con)
Ahead of my right hon. Friend’s speech on Europe, and given his very busy schedule to which he referred, may I, in the spirit of Christmas, offer him a helping hand on his Europe speech and say that I will be fully available all over the Christmas holidays?
The Prime Minister
That is an alluring prospect, and I am sure that many hands will make light work.
Jim Shannon (Strangford) (DUP)
I thank the Prime Minister for his statement. I refer him to the growth and competitiveness part of it and the sentence about “new safeguards that will protect the interests of those countries outside the eurozone.” The United Kingdom of Great Britain and Northern Ireland has strong economic and trading contact with the Commonwealth countries. Will he assure this House that the historic trading links with the Commonwealth will be encouraged to continue and grow within Europe?
The Prime Minister
The hon. Gentleman makes an important point. Half our trade is with the European Union, but the other half is with countries outside the European Union. In recent years we have obviously seen very fast growth in that trade with some of the fast-growing BRIC countries—the Brazils, the Russias, the Indias and the Chinas—but we also have very strong relations with our Commonwealth partners. We should be encouraging our trade relations with all those countries. There is also the EU-Canada free trade agreement, which is under negotiation and could bring real benefits to both sides.
Rehman Chishti (Gillingham and Rainham) (Con)
Will the Prime Minister comment on reports that Turkey has made a new proposal to Russia for a transition in Syria?
The Prime Minister
Discussions are always under way between the leading powers who are concerned about the future of Syria. Obviously both Turkey and Russia play quite influential roles in terms of this issue, and everything we can do to encourage contact, particularly with the Russians, to encourage them to think about how we can achieve a transition in Syria is worth while.
Mr Graham Stuart (Beverley and Holderness) (Con)
I refer the House to my declaration of interest. Was there any discussion at the Council about co-operation with China to accelerate the reductions in cost in a transition to a low-carbon economy? Will the Prime Minister meet me and other members of GLOBE UK to discuss this issue?
The Prime Minister
There were no discussions about our relations with China on this occasion, nor were there discussions on energy policy, which take place at different European Councils, but I am always happy to meet my hon. Friend and hear his concerns.
Charlie Elphicke (Dover) (Con)
My right hon. Friend will be aware of the idea that, in future, City of London traders could deal in yen and in dollars but perhaps not in euros. Do the safeguards that he won in Europe protect the City of London from that risk?
The Prime Minister
My hon. Friend makes an important point. There have been moments over previous years when it looked as though, because of a location policy, it would have been possible to say that Britain could clear deals in pounds, in yen and in dollars but not in euros. As a member of the European Union, which is about free trade and a single market, this would have been a ridiculous state of affairs. The guarantee that my right hon. Friend the Chancellor secured on a no-discrimination policy takes us largely down the road we want to be on.
Bob Stewart (Beckenham) (Con)
Will my right hon. Friend reaffirm his position with regard to the European Union military command headquarters, particularly as five major nations in Europe want it to be established, and I do not think we do?
The Prime Minister
I am happy to repeat that we are against the idea of an operational headquarters. This came up again tangentially at the European Council, with some attempts to change the language about what was required, and I said that that was not acceptable. The focus of the European Council conclusions is rightly about capacity. We are all interested in European countries having greater capacity to deal with these issues, but we do not want duplication of headquarters and challenges to NATO.
Mr Robin Walker (Worcester) (Con)
May I welcome the Prime Minister’s very clear statement that we will never support a European army? In an increasingly multi-polar and fast-changing world, and given his answer to the question about Commonwealth trading, does he agree that it would also be against Britain’s interests as a trading nation to give up its independent foreign policy and support a full common foreign policy?
The Prime Minister
My hon. Friend makes an important point. I think we can have the best of both worlds, where we work with European partners to have common positions on issues such as sanctions against Iran or Syria, which can maximise our potential and our influence; but, at the same time, we are an independent power and are able to have independent policies and forge independent relations with some of the fastest-growing countries of the world, and we should continue to do that.
Valerie Vaz (Walsall South) (Lab)
Will the Prime Minister clarify whether, if he does not get his preferred position on renegotiation, he would consider leaving the European Union?
The Prime Minister
As I have said, I think that Britain will do best if we can maintain not just our access to the single market, but, crucially, our ability to help set the rules of that single market. That is where I part company with those people who want to leave altogether, because it seems to me that it is absolutely vital that a nation that is as reliant on trade and that is as open as Britain is does not just have access to those markets, but helps write the rules of those markets as well. That is the future we should seek.
Jason McCartney (Colne Valley) (Con)
I praise my right hon. Friend for raising the issue of the EU defence policy, because there is confusion and duplication in relation to command and control. I have seen the operations in the horn of Africa, for example, which has the EU’s Operation Atlanta and NATO’s Operation Ocean Shield. With that in mind, is he concerned, like me, about the proliferation of costly EU embassies, which are popping up all over the planet?
The Prime Minister
On the issue of the embassies of the European External Action Service, we in this party did not support them in the first place. We should limit them and try to make them as cost-effective as possible.
There is always a risk of potential duplication, which is why Britain and the other strong supporters of NATO should always stand up firmly and say that we do not want costly bureaucracies and new headquarters that are all about flags and politics. Obviously, however, we want other European countries to step up to the plate with greater capacity, so that in areas such as the horn of Africa or Kosovo we are able to get the effect that we need on the ground.
Mr David Nuttall (Bury North) (Con)
One of the many problems arising from our membership of the European Union is that UK businesses are burdened with rules and regulations from Brussels that hinder their ability to compete in the global race that my right hon. Friend rightly says we are in. To follow on from the point made by my hon. Friend the Member for Crawley (Henry Smith), paragraph 18 of the Council conclusions refers to reducing the regulatory burdens from Brussels. Realistically, however, what cuts in red tape does my right hon. Friend expect to be proposed when the matter is next brought before the Council in March next year?
The Prime Minister
What I hope for is that we will put pressure on the Commission between now and March to come up with a serious list of European directives and regulations that can be radically amended or cut. We are doing that in the UK through the regulatory changes being led by the Government—we have identified about 3,000 regulations to get rid of—and we want the same process to take place in Brussels. I mentioned paragraph 18 earlier. It says:
“The European Council welcomes the proposals by the Commission to reduce regulatory burdens and scrap regulations that are no longer of use”.
I do not think that the word “scrap” has ever appeared in European Council conclusions before and I am rather proud to be the person who put it there.
Jeremy Lefroy (Stafford) (Con)
Was my right hon. Friend able to raise with his fellow leaders the question of the fulfilment of the pledges they made to international development in 2005?
The Prime Minister
We did not discuss international development at this Council, because it was largely about the eurozone, but we did discuss briefly the effect of European aid, particularly in Syria, where Britain is playing a key role, as is the EU, with its aid budget, which is making sure that we ease the scale of the humanitarian crisis, and that is good and important work.
Dr Sarah Wollaston (Totnes) (Con)
Better tantric than premature—we have all seen where that got the Leader of the Opposition on Leveson. We are waiting breathlessly for my right hon. Friend’s speech in mid-January. Will he include in it a statement on the impact on employment in this country of an influx of Bulgarian and Romanian workers?
The Prime Minister
Given my hon. Friend’s medical background, I think that I will leave all such remarks to her and not make them myself. She makes an important point about the end of transitional controls. Obviously, I will look at that issue carefully.
Andrew Jones (Harrogate and Knaresborough) (Con)
Does the Prime Minister agree that a banking union should never be able to ride roughshod over those outside the eurozone?
The Prime Minister
I do agree with my hon. Friend. A banking union is necessary for the countries of the single currency. As I have said, we have a single currency in the pound and there is a banking union between England, Scotland, Wales and Northern Ireland. The countries with the single currency need a banking union, but it should not ride roughshod over others. That is why it is important not only that we are outside the banking union, but that we have secured the voting rules so that the “outs” have a say over things that could affect them.
Andrew Bridgen (North West Leicestershire) (Con)
In response to an earlier question, my right hon. Friend said that he believes it will take a considerable time for the eurozone countries to negotiate full fiscal union. Given the acuteness of the eurozone crisis, does he really believe that they will have the luxury of having the time that they need?
The Prime Minister
My hon. Friend asks a good question. Because of the success of the European Central Bank in calming the markets, there is perhaps less pressure on the eurozone countries to take the steps that many analysts believe they need to take. The reason why I think it will take time is that these are difficult issues for sovereign countries. As I have said, one issue that was discussed only in outline form at the Council was the idea of contracts between Governments and the European Commission. I do not know how such contracts will go down in other European countries, but I suspect that they would go down rather badly if we proposed them here. These are difficult issues that it will take time to discuss. We need to think about that as we calibrate our response.
Michael Fabricant (Lichfield) (Con)
Anders Borg, the Swedish Finance Minister, said that when the financial transaction tax was introduced in Sweden,
“between 90%-99% of traders in bonds, equities and derivatives moved out of Stockholm to London”.
What steps has the Prime Minister taken to ensure that we do not find that such a tax is imposed in the UK, which is what the Labour party wants, and that our traders do not all go to New York and Zurich?
The Prime Minister
My hon. Friend makes an important point. Anders Borg is an excellent Finance Minister. The Chancellor of the Exchequer and I work very closely with him. I believe that if a financial transactions tax is not introduced simultaneously around the world, the transactions will just go to the lowest-cost destinations. That is why it is totally self-defeating. The European Commission’s own piece of work on such a tax showed that it would cost hundreds of thousands of jobs and millions of pounds of revenue, not just in the UK, which has a large financial services industry, but in the rest of Europe.
Mr Philip Hollobone (Kettering) (Con)
Prior to the entry of a large number of eastern European countries to the EU a few years ago, the previous Government made the hideously inaccurate forecast that just 13,000 eastern Europeans a year would come to our shores. The total is now 1.5 million and rising. Next Christmas, the transitional controls for Bulgaria and Romania will cease, but the Home Office has refused to make an estimate—on the principle of once bitten, twice shy—of how many people will come to our shores. Have the Bulgarian or Romanian Governments apprised the Prime Minister of their estimates of how many of their citizens may be coming our way?
The Prime Minister
To answer my hon. Friend directly, I have not asked those Governments for an estimate. He is right to say that the transitional controls are coming off and that the previous forecasts were wrong. I will discuss this important issue with the Home Secretary in the months ahead.
Mr Speaker
I thank the Prime Minister, the Leader of the Opposition and all 58 Back Benchers who questioned the Prime Minister.
Points of Order
Mark Tami (Alyn and Deeside) (Lab)
On a point of order, Mr Speaker. Last Thursday, the Secretary of State for Wales attended an event at Airbus in my constituency. He did not have the good grace to advise me of it. I know that he has one of the busiest jobs in government, but do you agree that he should advise Members when he goes on such visits?
Mr Speaker
Yes. Visits on official business are subject to the requirement of advance disclosure to the Member whose constituency is affected. The busyness of a Minister is not a material factor. Often, these very busy, senior and respected Ministers have a significant number of people available to help them. We will leave it there for today.
Mr Speaker
The day would not be complete without a point of order from the hon. Gentleman.
Chris Bryant
Well, I have not had one for quite a while, Mr Speaker. You may have noticed that on occasion Ministers make speeches outside the House. We have no notice of them until we read about them in The Telegraph, but sometimes they are important developments of new policy. We now know for a certain fact that the Prime Minister will make a speech on Europe in the new year, and I think it will probably have some policy in it. Would it not be a good idea if that speech were made in the House rather than anywhere else?
Mr Speaker
I think the new year will bring new challenges, and it would be wise to embark on them then, but not now. In the hallowed words of the late Lord Whitelaw, “I generally find that it is better to cross bridges only when I get to them.” [Laughter.]
Mr Speaker
I don’t know, and I cannot very well ask Lord Whitelaw, I am afraid, but we will have to make do for today.
Growth and Infrastructure Bill (Programme) (No. 2)
Proceedings | Time for conclusion of proceedings |
|---|---|
New Clauses other than new Clauses standing in the name of a Minister of the Crown; amendments to Clause 1; amendments to Schedule 1; amendments to Clauses 2 to 5. | 5.45 pm. |
Amendments to Clause 6; amendments to Schedule 2; amendments to Clauses 7 to 9; amendments to Schedule 3; amendments to Clauses 10 to 12. | 7.00 pm. |
Amendments to Clause 25; amendments to Clauses 13 and 14; amendments to Schedule 4; amendments to Clauses 15 to 17; new Clauses standing in the name of a Minister of the Crown and related to Clause 18; amendments to Clauses 18 to 23; new Clauses standing in the name of a Minister of the Crown and related to Clause 24; amendments to Clause 24; amendments to Clauses 26 to 30; new Schedules; remaining proceedings on consideration. | 9.00 pm. |
Roberta Blackman-Woods (City of Durham) (Lab)
The House will see that we have a large number of amendments and a very short time in which to debate them, and I do not want to eat into that time any further by saying any more at the moment or opposing the programme motion.
Mr Speaker
Somebody says “Excellent”. [Interruption.] Oh, it was the hon. Member for New Forest East (Dr Lewis). We are grateful to him for his views.
Question put and agreed to.
Growth and Infrastructure Bill
17:45 - The House divided: - Ayes: 216 / Noes: 294 - Question accordingly negatived.
19:00 - The House divided: - Ayes: 220 / Noes: 271 - Question accordingly negatived.
20:39 - The House divided: - Ayes: 225 / Noes: 260 - Question accordingly negatived.
21:55 - The House divided: - Ayes: 273 / Noes: 231 - Question accordingly agreed to.
Roberta Blackman-Woods (City of Durham) (Lab)
I beg to move, That the clause be read a Second time.
Mr Speaker
With this it will be convenient to discuss the following:
New clause 6—Local powers to establish permitted development rights—
‘(1) Section 57 of the Town and Country Planning Act 1990 is amended as follows.
(2) In subsection (3) after second “order”, insert “issued by the local planning authority”.
(3) After subsection (3) insert—
“(3A) Where a local planning authority proposes to make an order under this section it shall first prepare—
(a) a draft of the order; and
(b) a statement of its reasons for making the order.
(3B) The statement of reasons shall contain—
(a) a description of the development which the order would permit; and
(b) a plan or statement identifying the land to which the order would relate.
(3C) Where a local planning authority has prepared a draft local development order, it shall consult, in accordance with regulations, persons whose interests it considers would be affected by the order.”.’.
New clause 7—Town and Country Planning Act 1990 pre-application case oversight—
‘Section 74 of the Town and Country Planning Act 1990 (Directions etc. as to method of dealing with applications) is amended by the addition of the following paragraph at the end of subsection (1).
“(g) for requiring the local planning authority, in relation to a proposed application for planning permission for development of a type prescribed by the order, to oversee (including by the giving of advice and opinions) the preparations and consultation being made and carried out by the applicant in relation to the proposed application, requiring the applicant and any other person specified by the order to participate in the oversight arrangements made by the local planning authority, including by attendance at pre-application hearings conducted by or on behalf of the authority, and requiring the payment of fees by the applicant for the oversight arrangements for a maximum period to be set out in regulations.”.’.
New clause 8—Pre-application stage of major infrastructure regime—
‘Section 51 of the Planning Act 2008 (Advice for potential applicants and others) is amended by the addition at the end of the following subsection—
“(5) Regulations under subsection (3) may also make provision for the oversight (including the giving of advice and opinions) by a person appointed by the Secretary of State of the preparations being made by an applicant in relation to a proposed application and the applicant’s compliance with the provisions of this Part and those having effect under it, and in doing so the regulations may require the applicant and any other person to participate in the oversight arrangements made by the person appointed by the Secretary of State, including by attendance at case management conferences, and the payment of fees by the applicant and for a maximum period to be set out in regulations.”.’.
New clause 9—Consents under Electricity Act 1989: powers of the Welsh Ministers—
‘(1) The Electricity Act 1989 is amended as follows.
(2) After section 36C insert—
“36D Consents under section 36 relating to generating stations in Wales
In relation to generating stations in Wales, sections 36 to 36C and Schedule 8 (so far as it relates to sections 36 to 36C) have effect as if references to the Secretary of State were references to the Welsh Ministers.”.’.
New clause 11—Infrastructure requirement—
‘(1) Section 39 of the Planning and Compulsory Purchase Act 2004 (sustainable development) is amended as follows.
(2) After subsection (2) insert—
“(2A) The person or body must exercise the function with the objective of identifying that there is, or will be, sufficient infrastructure to support new development that is proposed in a development plan document, or in a subsequent revision to a development plan document.”.
(3) In subsection (3) omit “subsection (2)” and insert “subsections (2) and (2A)”.
(4) After subsection (3) insert—
“(4) In this section ‘infrastructure’ has the same meaning as in section 216 of the Planning Act 2008.”.’.
New clause 12—Cumulative effects of development consents on climate change—
‘(1) The Planning Act 2008 is amended as follows.
(2) After section 13 (legal challenges relating to national policy statements) insert—
“13A Cumulative effects
(1) The Secretary of State shall publish on 6 April each year a report setting out the cumulative effect of development consents granted under this Act on the mitigation of, and adaptation to, climate change.
(2) A statement designated under section 5 must contain a statement to the effect that it is the Secretary of State’s view that the requirement of subsection (1) is ratified.”.’.
(3) In section 105 (decisions in cases where no national policy statement has effect), after subsection (2)(b), insert—
“(ba) the cumulative effect of development consents on the mitigation of, and adaptation to, climate change set out in the report published by the Secretary of State under section 13A;”.
(4) In section 105, at the end add—
“(3) For the purposes of subsection (2)(ba), the reference to the report published by the Secretary of State under section 13A means the last report published under that section.”.’.
Amendment 42, page 1, line 2, leave out clause 1.
Government amendment 5.
Amendment 43, page 36, line 2, leave out schedule 1.
Amendment 49, in clause 8, page 10, line 31, leave out
‘economic growth in the United Kingdom’
and insert
‘sustainable development and economic growth in the United Kingdom through the Government’s broadband programme.’.
Government amendment 6.
Government new clause 3—Variation and replacement of pre-Planning Act 2008 consents.
Government amendments 7 to 21, 33 and 34.
Roberta Blackman-Woods
The Minister will know that some time was spent in Committee debating the true purpose of clause 1 and its inherent anti-localist, centralising agenda. We sought to test whether the Government had intended to produce a clause that would enable major planning discussions and decisions in designated authorities to be taken by the Secretary of State—usually by the Planning Inspectorate on his behalf—thus significantly reducing the influence that local people have on planning decisions affecting their area. Astonishingly, that did seem to be their intention. Their love affair with localism seems to have been short-lived.
A second major issue in Committee was the nature of the designation itself, whether the criteria to be used were fair and whether the Government should be going down the route of designation at all. If their purpose is really to improve decision making in local authorities, that does not appear to be the appropriate or sensible route.
We were somewhat hampered by the fact that the consultation document relating to the designation of failing planning authorities appeared only a very short time—in fact, less than an hour—before the Committee commenced discussion of clause 1. Since then, we have had the opportunity to consider the document in more detail. Unfortunately, the consultation document does not make happy reading, and I feel that I need to urge local authorities and others to respond to it by 17 January.
An authority’s track record of speed is to be measured over a two-year period, based on the percentage of major applications determined within statutory limits, and quality is to be measured by the percentage of decisions on major applications that are overturned on appeal. Both criteria have their problems, but overall the approach seems to use a sledgehammer to crack a nut. As we know, application of the first will draw in only a handful of authorities—even then, we are not sure how many—and the second none at all.
The Minister knows there is no evidence base for the measures in the clause, and they could put additional pressures on local authorities to agree to applications that, on balance, they might have refused. We know that is the case because of what happened in Committee. The Minister was given alternative criteria for designation that were much more in line with the localist agenda, such as being designated for failure to make decisions in line with the local plan. Unsurprisingly, he refused to accept the amendment.
As we heard in Committee, however, it is much worse than that. The Government are consulting on criteria, but the clause allows the Secretary of State to alter them, seemingly on a whim. The Minister was vague in Committee on whether changes would occur only after a period of consultation, and I hope he will be able to give us more clarification today. The power-grabbing tendencies of the Secretary of State, as endorsed by the clause, were also a continual theme of our deliberations. At no stage have improvements been made, despite the Minister being given numerous opportunities to do so through our amendments, and that should be regretted.
I ask the House to excuse me, as I have a terrible cold.
Mr James Gray (North Wiltshire) (Con)
I am sorry to interrupt the hon. Lady’s flow to pick her up on a minute, but nevertheless important, point for those of us who love the English language. She will no doubt respond that this is purely a drafting error, but new clause 5 states:
“The purpose of the planning system is to positively promote the long term”.
In other words, there is a split infinitive written into her new clause. Does she approve of that, or would she like to change it on reflection?
Roberta Blackman-Woods
I am grateful to the hon. Gentleman for his intervention, not least because he has enabled me to have a coughing fit. I hope he agrees that the matters before us are much more serious than a split infinitive.
Mr John Redwood (Wokingham) (Con)
On a more serious matter, new clause 5 states that planning should create sustainable development, and that “sustaining” means
“the potential of future generations to meet their own needs by respecting environmental limits.”
Does the hon. Lady think there is a limit to how many people England can accommodate, and does she think her Government exceeded that limit?
Roberta Blackman-Woods
The right hon. Gentleman makes an interesting intervention, but I will not be distracted and will talk about that issue, because we have a serious matter in front of us—the measures contained in clause 1.
As I was saying, despite the Minister being given a number of opportunities to improve the clause in Committee, alas he did not take any of them on board. That was a pity, because our amendments sought to make the designation system more transparent and more accountable than just relying on the thoughts of the Secretary of State. As we know from Communities and Local Government questions earlier, those thoughts can at times be a bit alarming. He was telling us today that green is brown and brown is green, and he has often told us that down is up and up is down, so I am not at all sure where the Secretary of State’s thoughts on the clause would lead us. We are saying that we need to define what requiring local authorities “to do things” could possibly mean. I will not rehearse our long and interesting discussion in Committee about what that could mean, but it is truly extraordinary that we are being asked to adopt legislation allowing the Secretary of State “to do things” that are as yet ill-defined.
I raise those points to demonstrate the need for amendments 42 and 43, which would remove clause 1 and schedule 1 respectively. The Opposition consider this an extremely important matter, and, if possible, unless the Minister provides reassurances that have not yet been forthcoming, we will, at the appropriate point, seek to divide the House on amendment 42. We are totally against local authorities being designated as failing in the way he suggests and we do not believe that it will improve the performance of local planning authorities. Instead, it is very likely to lead to inappropriate development, as the Town and Country Planning Association said so powerfully in its evidence. It also pointed out—he needs to take this on board—that it could lead to a breakdown in trust in the planning system. As the consultation paper looks to be seeking to rubber-stamp the criteria put forward for designation and as the Government have made no effort to improve the clause to make designation and its operation more democratic, we had no alternative but to table an amendment to remove this thoroughly bad clause.
New clause 5 would provide an alternative approach to planning that we think the planning Minister needs to adopt as soon as possible. It would include in the Planning and Compulsory Purchase Act 2004 a definition of the purpose of planning. As hon. Members have pointed out, it is important to change the whole debate about planning. Instead of being presented simply as a brake on growth or somehow preventing growth, we want planning to be used to develop sustainable communities. The new clause would set out the need for planning policy to
“positively identify suitable land for development in line with the economic, social and environmental objectives so as to improve the quality of life, wellbeing and health of people and communities”.
Mr Redwood
I would be grateful if the hon. Lady could explain who would judge civic beauty, which I understand is an important criterion in her proposed system.
Roberta Blackman-Woods
The right hon. Gentleman raises an interesting point. It might be helpful if we discussed how to judge what is beautiful in civic terms. I will happily engage with the Minister on how we might set up such a system. We could have citizens’ panels and they could get advice from relevant bodies around the country. If the Minister were to adopt the new clause and discuss with us how the measures in it could be delivered, it would be a helpful and constructive way forward, so I am grateful to the right hon. Gentleman for his intervention.
As I was saying, we think that the system should look at
“the quality of life, wellbeing and health of people and communities... contribute to sustainable economic development…protect and enhance the natural and historic environment and quality of existing communities and the countryside…ensure long term sustainable patterns of resource use”
and, as I said and as the right hon. Gentleman just highlighted, it should
“positively promote civic beauty through high quality and inclusive design; and…ensure the planning system is open, transparent, participative and accountable.”
None of that, however, has been taken on board by the Minister. In fact, in their rush and desperation to be seen to be doing something to produce growth, the Government have forgotten the real purpose of planning. Planning is a tool for people to shape places positively and for communities to ensure that they have homes for their children and developments that are beneficial to them and the economy. The Government seem determined to characterise planning solely as an obstacle to growth—clearly an attempt to disguise the fact that their policies are the real brake on growth and what we should be resisting.
Mr Crispin Blunt (Reigate) (Con)
Will the hon. Lady tell the House what preliminary view she has taken of new clause 11, tabled by my right hon. Friend the Member for Arundel and South Downs (Nick Herbert), and whether she is broadly sympathetic to it? I realise that she has not yet had a chance to hear my right hon. Friend’s arguments, but is she open to the proposals in the new clause?
Roberta Blackman-Woods
I thank the hon. Gentleman for that intervention, and I will deal with that point in just a moment.
I was talking about the wide range of infrastructure that could be allowed to develop in areas of outstanding natural beauty, in our national parks and in conservation areas, if clause 8 were not amended. Many Members on both sides of the House would be gravely concerned if broadband masts, wires and cabinets—let alone any other communications equipment—were suddenly allowed to spring up all over our national parks, and the Government have not yet given sufficient reassurance on the issue. We have no idea how local authorities would be able to oppose inappropriate siting of overhead cables or broadband cabinets if they had to make economic development their overriding criterion. I have made it clear that we are not against the roll-out of broadband; we just think that the clause is incorrectly worded at present.
The Minister claimed in Committee that it was not possible to specify broadband in the Bill owing to European legislation. I asked him at the time to point to the precise area of European legislation that prevents the Government from specifying it in that way, but I am still waiting for that clarification. I hope that he will be able to answer the question today.
Some groups, including the Campaign to Protect Rural England, have called for clause 8 to be deleted in its entirety, not least because it would set a worrying precedent in legislation. It seems to propose the scrapping of the special and rightful protection that is offered to our national parks and areas of outstanding natural beauty, and to allow telecoms companies to install cabinets and masts in a free-for-all without securing permission from the relevant local authority. That would be unacceptable, and I hope that the Minister will take on board our concerns and those of the many organisations that have written to us about the proposal. I hope that he will give us an idea of how he intends to limit the impact of the clause on those beautiful areas, because we do not believe that it strikes the right balance at the moment.
The hon. Member for Reigate (Mr Blunt) asked me about new clause 11. I have looked at the proposal in some detail, and it makes a number of interesting points, but we feel that they are already dealt with in the planning system. Indeed, the hon. Gentleman might like to have a word with the Minister responsible for planning about how he will ensure that the national planning policy framework addresses the issue of planning policy shaping communities. I would say that our new clause 5 does a better job, because asking for such a positive view of planning and using it to shape our communities would mean that, in addition to looking at the need for new housing, we would look at the need for schools, jobs, a proper roads network for public transport, and so forth. It therefore seems to me that our new clause 5 positively supports new clause 11. I shall leave my comments there for the moment.
Nick Herbert (Arundel and South Downs) (Con)
I rise to speak to new clause 11, which is in my name and supported by 16 right hon. and hon. Government Members, including Liberal Democrat Members, several former Ministers and senior Members of Parliament, who share my concern about the adequacy of local infrastructure to support new development. My right hon. Friend the Member for Mid Sussex (Nicholas Soames), who feels strongly about this issue, and my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell) have asked me to give their apologies for being unable to be here: they have expressed their concern about the issue and have supported my new clause. Since I tabled the new clause late on Thursday evening, a number of other Members have indicated that they would like to support it.
The starting position is one I wish to make completely clear, and I believe it is shared by my right hon. and hon. Friends: new housing is necessary. The Minister with responsibility for planning, the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Grantham and Stamford (Nick Boles) is absolutely right to remind the House and the public of the necessity to ensure that there is housing provision, particularly for young people who are unable to get their foot on the housing ladder at the moment, and to get house building going again.
There is no desire on my part to challenge that argument, but the principle enshrined in the Localism Act 2011, to which I believe all Members subscribe, is that development should be sustainable. That means by definition—I share the Government’s definition—that the enjoyment given to the current generation should not make life worse for successive generations. Many of my constituents, and parish and district councils in particular have expressed concern that the local infrastructure is insufficient to support the additional development that has already been undertaken.
I mentioned on Second Reading that the drainage in my constituency is so inadequate that after heavy rainfall households face the problem of sewage rising in their gardens or running in the streets, and people have to ensure that their loos do not back up. That is an intolerable situation for residents in my constituency.
Mr Jim Cunningham (Coventry South) (Lab)
Does the right hon. Gentleman have a view about building on floodplains, which has been a big issue over the past few weeks given all the flooding?
Nick Herbert
The hon. Gentleman certainly raises a related issue. It is essentially part of the same principle, which is whether the development that takes place is or is not sustainable. There is obviously a great deal of concern about building on floodplains as well. Even where building takes place and it is not on a floodplain, it is essential to ensure that there is sufficient local infrastructure to support that development. It is not just a question of adequate local drainage, as it is also a question of ensuring that there are sufficient local school places and that the road network is sufficient to support the additional population. In villages throughout my constituency, we have found that that infrastructure has not been provided despite the additional development, and it is feared that further development would exacerbate the problems.
Mr Gray
Is my hon. Friend aware of the Ridgeway Farm development in Purton, in my constituency, where it was agreed this week that 700 houses would be built in an area where there are no schools, where the roads are tiny country lanes and there is no access, where the hospital is jam-full, and where the local villages have been flooded in the last couple of weeks? It is an entirely unsustainable development, but the inspector in Bristol has allowed it to proceed.
Nick Herbert
My hon. Friend has given a very good example of the local concern that is generated when there is inadequate infrastructure to support development.
Where is the mechanism requiring planning authorities to ensure that the necessary local infrastructure is in place when development is permitted? I repeat that the purpose of the new clause is not to prevent necessary housing from being built, but to ensure that it is built at sustainable levels and in the right places. We have to ask why, if the mechanism is adequate now, the circumstances that I have described have already arisen. There is clear evidence that the existing mechanisms are inadequate.
We are moving from a system whereby the gain from development was captured under section 106 agreements to a system involving a community infrastructure levy which, I understand, is intended to ensure that investment can be made in local infrastructure. My constituents will want to hear from the Government how that new system will work, and to be assured that when new housing is proposed under the development plans that local authorities are now undertaking, there will be a mechanism to ensure that the necessary infrastructure is provided along with it.
Steve Brine (Winchester) (Con)
As local authorities—a good example being my local authority in Winchester—develop their new local plans, which they are directed to do under the Localism Act 2011, they are getting perilously close to the numbers in the south-east regional spatial strategy, which my right hon. Friend and I share, or almost shared. I wonder whether anxiety about that situation underlies the new clause.
Nick Herbert
My hon. Friend is exactly right. It is a related issue. Although regional spatial strategies are being abolished—which is overdue but nevertheless welcome—there is a widespread fear among local authorities that planning inspectors will overturn their own assessments of the level of need in local areas, and that they will be unable to balance what could, in many areas, be a near-infinite level of demand with their ability to provide housing.
Mr Redwood
My right hon. Friend has made an interesting point about need and demand. The Government have stated clearly that they will cut net inward migration from a quarter of a million a year to a few tens of thousands. Presumably councils should take into account the sharp deceleration in the need for new households.
Nick Herbert
That raises the question of the process whereby councils are now assessing need, and the potential confusion between need and demand. I think that communities will feel cheated if, having been promised the abolition of the top-down housing target that was set by the last Government—effectively by means of the regional spatial strategies—they see it returning through the back door in the shape of a planning inspector, and if local authorities find that they have no choice but to provide a level of housing that they consider to be unsustainable.
Mr Blunt
Let me make it clear to my right hon. Friend, and to the Minister, that that is precisely what is happening to Reigate and Banstead borough council. Its draft plan has been kicked back by the inspector to “show again”, because it simply does not meet what he believes to be the required development objectives in the green belt. The council is being invited to review the green belt in its area, which is meant to be sacrosanct. It is not just in the case of ordinary developments that localism is being overturned.
Nick Herbert
My hon. Friend makes his point powerfully. The principle of localism is enshrined in the very name of the legislation recently mentioned and was set out in the coalition agreement. Under that principle, local communities should now have the power—on an objective assessment, I agree—to gauge the level of need. They are best placed to determine whether there is sufficient local infrastructure and what the environmental damage would be, and balance that against the economic needs of their area. They are best placed to determine the right level of housing in their area.
Rebecca Harris (Castle Point) (Con)
Does my right hon. Friend agree that often what statutory consultees such as the utility companies and the Highways Agency assure people is sustainable for the local infrastructure does not tie up with the reality of people’s everyday existence on the ground?
Nick Herbert
I agree, and one problem is that some of the agencies charged with giving a statutory response to draft development plans do not properly engage with those plans or give an assessment of the impact on roads, schools, drainage and water supply and so forth which accurately grapples with the increase in demand. There is not a properly joined-up process.
I suspect that the Minister will point me to the new national planning policy framework, which says that local planning authorities should work with other authorities and providers to
“assess the quality and capacity of infrastructure…and its ability to meet forecast demands”.
The provision does not, however, quite say that local authorities should ensure that local infrastructure is sufficient to match demand, but that is what the new clause says. It places a statutory duty on planning authorities to identify the demand on infrastructure caused by a new development. That is a stronger duty than under the national policy framework.
I recognise that there is little time left, and I am anxious to hear the Minister’s reply, but I want to impress upon him that since I tabled the new clause just a few days ago many Members of this House, as well as many members of the public and councillors, have expressed concern about the issue. There is widespread concern about it. There is insufficient provision in existing legislation to ensure local infrastructure is provided when necessary development is put in place.
Mr Deputy Speaker (Mr Nigel Evans)
Order. As Members know, our discussion of this group of amendments is timed to conclude at 5.45 pm, and I want to give the Minister at least 10 minutes to respond. The next speaker will be Mr Jonathan Edwards. I ask him to sit down by 5.35 pm.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
I will cut my speech in half in order to give my colleague, the hon. Member for Brighton, Pavilion (Caroline Lucas), a chance to speak to her new clause in this group.
I and my party believe that the natural resources of Wales should be harnessed for the benefit of the people of Wales. I am very concerned that any future exploitation of the ground for its mineral wealth, particularly through fracking, would see its riches and the money it generates leaving Wales, without its people benefiting from any of that potential.
The people and communities of Wales still bear the scars of the coal rush, which fired the British state and its empire yet there was an abject failure to leave any of the fruits of its riches in a legacy of prosperity. My new clause 9 was written with that in mind. It will address an anomaly in the devolution system across the British state, as the powers in question are already devolved in Scotland and Northern Ireland. If my new clause is accepted by the Government or passed following a Division, Welsh Ministers will have responsibility for all energy-generating planning applications in my country, instead of there being the current arbitrary and insulting 50 MW limit.
Wales is in the bizarre situation of being an energy-rich country in both mineral and renewable resources yet having one of the highest rates of fuel poverty in the UK. According to the Welsh Government, we have the potential to produce double the electricity we require for our needs. According to the Department of Energy and Climate Change here in London, we are a net exporter of electricity, yet energy prices in Wales are among the highest. Earlier this year, I presented a simple and reasonable Bill to Parliament to ensure that energy planning policy was devolved to the Welsh Government so that they could plan their energy projects coherently. It sought to put Wales on an equal footing with Scotland and Northern Ireland, and it was open to other MPs to amend it and make their own suggestions. It was an opportunity for the Labour party to introduce proposals from its manifesto, on which the Welsh Government were elected last year, but the vast majority of their MPs in London were strangely keen that Wales should not have those powers.
My Bill had cross-party support, but despite a few notable and honourable exceptions it was voted down. Labour MPs from Wales voted with the Tories. To be fair to the Lib Dems, most of their MPs voted to support the Bill and I look forward to their support later this evening.
Huw Irranca-Davies (Ogmore) (Lab)
Does the hon. Gentleman therefore consider Labour’s position on the devolution of projects providing up to 100 MW, which would include the vast majority of wave and tidal power schemes and many others, to be good and sensible, not least because it recognises that larger UK national infrastructure schemes, such as a Severn barrage scheme, were it ever to happen, are of interest to England and Wales?
Jonathan Edwards
I am grateful for that intervention and I welcome the hon. Gentleman to the world of Twitter —he was tweeting in Welsh over the weekend and I was very pleased to see it. I shall come on to Labour’s current policy later in my speech.
As I introduced my Bill, I said that the people of Wales were extremely protective of their natural resources. Naturally, as a result of the vote there was a public outcry in Wales, with Labour accused of betrayal. Subsequently, the First Minister made a public statement that the Labour party, despite the voting record of its MPs, supported total control over energy planning policy. His Government then published an energy policy document that highlighted how the sector was key to the future of the Welsh economy. I could not agree more, which is why I have introduced my new clause this evening.
I hope that, if pushed to a vote, the Lib Dems will maintain their principled position. If Labour MPs sit on their hands or join the Tories in the Lobby, the credibility of Carwyn Jones will be shot to pieces. The shadow Secretary of State for Wales has said today in the Western Mail, in response to my new clause, that Labour in Westminster supports the devolution of planning for energy projects only up to a limit of 100 MW. That shows a complete lack of coherence between Labour in London and Labour in Cardiff. It flies in the face of and contradicts the wishes of the First Minister, who said in March that he did
“not see why 100 MW should be the limit in the future.”
In addition, in June this year, John Griffiths, the Minister for Environment and Sustainable Development, stated that
“the Welsh Government…wishes to have further devolution of power over energy”
and “do not limit” themselves at 100 MW.
During a recent “Sharp End” interview, the First Minister adopted Plaid Cymru’s position and said that he wanted full control over energy planning policy. If energy policy is the key to the future of the Welsh economy for jobs and growth—I am certain that it is—why should a 100 MW limit be set? Total control over energy planning policy would allow the Welsh nation best to decide its energy future and would be essential in driving growth in our economy.
From a good governance point of view, there needs to be consistency in planning policy. Having two different authorities responsible for policy is a disincentive for investment, leads to a lack of coherence in energy and economic strategy and is awfully complicated for my constituents. I have two technical advice note 8, or TAN 8, areas in my constituency, which are designated zones towards which the Welsh Government direct onshore wind development. The projects under 50 MW are determined by the local planning authority and those above are determined by Ministers here in Whitehall. Local people experience a huge difference when dealing with both authorities. With the LPA, they have direct access to planning officers and local councillors, whereas not a single official or Minister has even bothered to come to north Carmarthenshire to discuss with them the Brechfa Forest West development, which has just landed on the Secretary of State’s desk in London. The arrangements lead to a huge democratic deficit and my surgeries are constantly filled with angry and disillusioned people. My new clause would help to deal with that.
I have tabled a modest and reasonable amendment that would enable the people of Wales better to plan our energy infrastructure over 50 MW on a par with Scotland. It will also help the Welsh Government play their part in helping the UK Government to achieve the aims of this Bill, leading to greater policy coherence and unleashing the economic potential of Wales’s energy resources. If Ministers refuse to accept the new clause, I am minded to press it to a Division.
The Parliamentary Under-Secretary of State for Communities and Local Government (Nick Boles)
I apologise to the House and to Members who tabled new clauses and amendments and have not had a chance to speak. I hope that the House will understand if I focus on amendments that are new on Report, rather than those tabled in the Bill Committee, where we had a full discussion, although I will of course return to clause 1 and the justification for it at the end of my brief remarks.
I shall start by addressing new clause 11, proposed by my right hon. Friend the Member for Arundel and South Downs (Nick Herbert) and a range of right hon. and hon. Friends. The Government and I share completely my right hon. Friend’s emphasis on the vital importance of infrastructure to support new development. Indeed, one of our main criticisms of the record of the previous Government was their complete failure to ensure that it was put in place. Ironically at a time when money, both public and private, was more available than ever before, infrastructure was simply not provided for.
Mr Blunt
The effect of the new clause tabled by my right hon. Friend the Member for Arundel and South Downs (Nick Herbert), to which I put my name, is “must,” rather than “should,” which is the position I believe the Minister is about to defend, and “must” speaks to the arguments he has just made.
Nick Boles
My hon. Friend anticipates the meat of the argument I want to make, but perhaps I could return to my point. It was in response to the failure of the previous planning regime to provide the infrastructure to support development and make local authorities and local communities feel empowered to shape their communities and their future that this Government produced the national planning policy framework and the Bill that became the Localism Act 2011. It is important to understand that while the national planning policy framework is indeed only policy, it is an incredibly carefully constructed and negotiated balance of measures. Taking one measure out of the framework and putting it into primary legislation, when no other part of it would be there, would be to up-end the balance, and would give primacy to one—very important—element at the expense of other important elements of the framework.
Mr Redwood
As the Minister may know, the borough unitary I mainly represent—Wokingham—has a local plan. It has identified land for 12,500 houses, which is a massive increase in development and well beyond the number many of my constituents would like. The authority has been prepared to argue the plan through; it wants to concentrate the development to get money for the infrastructure mainly from private sources, but the Minister decided to grant permission somewhere else, completely undermining the negotiations the authority wants to hold with the private sector. How does that help to get infrastructure?
Nick Boles
My right hon. Friend accuses me of things I have not done, but I am happy to take responsibility for all decisions of the Government, whether quasi- judicial or otherwise.
Perhaps I could return to the argument, because it is important. My right hon. Friend the Member for Arundel and South Downs made the very good argument that over the past 10 to 30 years local authorities have not been in a position adequately to provide the infrastructure improvements required to support housing and other kinds of economic development. I should like to try to persuade him that it is not because the provision is not in primary legislation as a duty—as a must, rather than a should—that the failure has arisen; it is because there have not been dedicated sources of revenue to support infrastructure. It is not that local authorities are out there saying, “We want to build 5,000 houses and not build any more roads and primary schools and not put in better sewers.” It has not happened because they have not had dedicated revenue streams to do it.
Nick Boles
Perhaps I could finish; I do not have much time.
The Government have put in place a huge range of specifically targeted measures to ensure that a funding stream is in place. That is why we supported the previous Government’s innovation of the community infrastructure levy, which is due to deliver £1 billion a year of infrastructure funding directly to local authorities; they will have to provide a list of infrastructure improvements so that developers know that they are making a contribution to specific matters, whether roads, drainage, schools or other things. We have also allocated £730 million to local enterprise partnerships.
Nick Boles
I have very little time and I need to get on to clause 1. I hope the hon. Gentleman will forgive me if I do not give way right now.
The autumn statement a few weeks ago included another round of £350 million for the regional growth fund and a new local infrastructure fund worth up to £470 million. I hope my right hon. Friend and my other right hon. and hon. Friends will understand that it is not primary legislation that will ensure that local authorities plan properly, as they should, for infrastructure; it is money. Part of the way to get that money is to plan positively for development, because that development will bring the community infrastructure levy and the new homes bonus.
Dr Phillip Lee (Bracknell) (Con)
I had the good fortune to be born in the Thames valley and I represent a constituency in the Thames valley. In my lifetime I have watched tens of thousands of homes being built and many industrial estates and business parks. The M4 motorway has never been widened and the hospital has never been built to serve the community that has grown so much. Can my hon. Friend confirm that the levy to which he refers goes towards a new motorway and a new hospital? My region desperately needs them.
Nick Boles
It will be for my hon. Friend’s local authority to specify the infrastructure. Those are good examples. The money could go towards a hospital, a school, drains or whatever is required. He is right that that has not been available previously.
Finally, on new clause 11, I make this promise to my right hon. Friend the Member for Arundel and South Downs. We are currently looking at all the planning guidance that is provided to local authorities about how they should go about interpreting the national planning policy framework and putting that into their local plans. Although I do not want to up-end the careful balance of local plans by putting this in primary legislation, I will look at making sure that the guidance that is provided in a much reduced set of planning guidance is very clear about the need to plan positively and specifically for infrastructure that is required to support the development and to ensure that it is brought on stream in good time for that development.
I turn to the general arguments about clause 1. The hon. Member for City of Durham (Roberta Blackman-Woods) and I have debated this at some length over the past few months. It has been my sole objective since the autumn to provide satisfaction to her, so it is a matter of great regret that I seem to have failed in this mission. I will try one last time on clause 1 to persuade her that her fears can be allayed and she, too, can embrace this extremely restrained proposal.
We hope that vanishingly few local authorities will be caught by the measure, but just as we accept that some schools fail and require intervention, and that Ofsted is the right judge of whether they are failing, and some hospitals fail and the Care Quality Commission is the right judge of whether they are failing, we believe it is our responsibility as Government to identify where some—very few—local planning authorities are failing to discharge their responsibilities to local people. That is why we are introducing the clause.
Annette Brooke (Mid Dorset and North Poole) (LD)
Has the Minister considered giving notice and support to such authorities, before moving to designation?
Nick Boles
I have good news for my hon. Friend. I had discussions with the Local Government Association just a few days ago. Because of the proposal on which we are consulting, which is that it should be two years of data about the timeliness of decisions on major applications, it will become clear, probably publicly but certainly to my officials and to officials in the Local Government Association, which authorities are heading into the danger zone, even after probably only six months’ data.
I have had discussions with the Local Government Association, with full support from the Department and my officials putting an arm round those authorities that are beginning to get into the danger zone and helping ensure that they get out before the axe falls—before the designation becomes real. It is my genuine hope that no local authority gets caught by the provision, because no local authority consistently fails to discharge its responsibilities.
Nick Boles
The statistics currently capture planning performance agreements that are agreed before an application is submitted, but not those that are agreed after. We will be altering that to ensure that the data are more accurate. Where we cannot do that, what we can do, which I think is just as good, is take submissions from local authorities on why the data might not present a fair picture of their performance, and we will of course take fully into account the fact that the data might not be absolutely conclusive for those submissions in year one.
Finally, new clause 12, tabled by the hon. Member for Brighton, Pavilion (Caroline Lucas), is incredibly well intentioned, but we believe that the national planning policy framework and the local plans already contain all the emphasis on sustainability, environmental quality and protection of rights and heritage for future generations—
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
I beg to move amendment 3, page 6, line 4, after ‘(1)’, insert ‘Subject to subsection (1A),’.
Mr Deputy Speaker (Mr Nigel Evans)
With this it will be convenient to discuss the following:
Amendment 4, line 5, at end insert—
‘(1A) This section does not apply to any planning obligation relating to development—
(a) in a National Park,
(b) in an area designated as an area of outstanding natural beauty,
(c) in an area designated as a rural area pursuant to section 157 of the Housing Act 1985, or
(d) for which planning permission was granted by a neighbourhood development order.’.
Amendment 45, line 18, leave out ‘means’ and insert ‘is assessed by the local authority to be the foremost reason.’.
Amendment 44, line 24, at end insert—
‘(3A) The Secretary of State shall make an order by Statutory Instrument setting out the criteria by which viability is to be assessed.
(3B) An order shall not be made under subsection (3A) unless he has consulted those persons or organisations he considers to be appropriate and a draft of the Order has been laid before, and approved by resolution of, both Houses of Parliament.’.
Amendment 46, line 40, at end insert ‘or,
(e) request that the requirement is to be met in part, or in full, by central government funding allocated for the delivery of affordable homes.’.
Amendment 47, page 7, line 8, at end insert—
‘(7A) Where the local authority has reasonable grounds to believe that the value of the land, on which planning consent with a planning obligation that contains an affordable housing requirement is placed, has risen and the original obligation has not been reasonably met at the end of one year they may—
(a) determine that the requirement is to have effect subject to modifications,
(b) determine that the requirement is to be replaced with a different affordable housing requirement, or
(c) determine that the requirement will be subject to review within a given time period.’.
Amendment 48, line 31, after ‘market’, insert
‘but not including requirements for land on the site to be reserved and transferred at nil cost to a local planning authority or registered provider of social housing.’.
Mr Raynsford
I draw attention at the outset to my interests as declared in the register.
It is widely agreed, I think, that clause 6 is unsatisfactory. It is clearly based on conjecture and prejudice, rather than evidence. It was put together in a hurry, without adequate thought about its likely consequences, and there is a wide view that it is likely to have damaging impacts, not least on the provision of affordable housing. Ideally, the clause should be withdrawn. However, if the Government persist in promoting it, it is at the very least essential that it be amended to prevent some seriously damaging impacts on well-established mechanisms for the delivery of affordable housing. The purpose of amendments 3 and 4, which have been tabled in my name, is to prevent the destruction of a mechanism that has been in place for 25 years or more and that has secured a great deal of affordable housing, particularly in rural areas.
The other amendments in this group have been tabled in the names of my right hon. Friend the Member for Leeds Central (Hilary Benn) and my hon. Friends the Members for City of Durham (Roberta Blackman-Woods) and for Edinburgh South (Ian Murray) on the Opposition Front Bench. They seek further amendments to the clause in order to offset some of its unfortunate consequences. I will not speak to those amendments; I will simply speak to amendments 3 and 4.
The issues were debated in Committee and were raised as a consequence of the evidence presented to us by Dr Nigel Stone of the English National Park Authorities Association. What was clear during the evidence sessions was the overwhelming weight of expert opinion against clause 6. Planning experts from the Royal Town Planning Institute, the Town and Country Planning Association and the Planning Officers Society joined representatives from local government, politicians and officers in condemning the clause as inappropriate and damaging. In his telling evidence, Dr Stone said that, as drafted, the clause could fatally damage the policy of rural exceptions, which has worked, as I have said, for more than 20 years and allowed the provision of affordable housing in a substantial number of areas where commercial housing development would not usually be acceptable.
The policy is called the exceptions policy because, exceptionally, it allows affordable housing—which may be social housing for rent, but could equally be low-cost home ownership—on the clear understanding that that housing will, in perpetuity, be kept available for the needs for which it was produced and that it will never be converted into market housing. The reason for that is obvious to everyone who cares about national parks, areas of outstanding natural beauty and rural areas where the beauty of the landscape would be seriously compromised by indiscriminate, speculative development. Such areas need people to work to help the local economy and desperately want to keep existing rural communities alive with opportunities for long-term residents to continue to live in the villages in which they were born and brought up.
Mr Redwood
Does the right hon. Gentleman not understand that the Minister’s intention is very simple and sensible? He does not want a commercial development of homes to be prevented by an affordable housing target that is not realistic for that development. Surely it is better to have some housing than none.
Mr Raynsford
If the right hon. Gentleman will bear with me, he will realise that, actually, the consequence of what the Minister is trying to do would be to destroy a policy that dates back to the days of the Conservative Government of the 1980s—I believe that the right hon. Gentleman was strongly supportive of them—who allowed it to come into being in order to ensure that it was possible to create affordable housing to meet needs in areas where there would usually be outright opposition to market housing. The reason for that outright opposition is that such developments would seriously compromise the character of an area. The rural areas in question do not want a mass of indiscriminate private sector development, but they do recognise the need for some homes for people who need to live and work in those communities. That was the basis of the policy, which was a product of his party’s Government. It was supported by my party, has remained in operation for more than 20 years and has secured a good supply of affordable housing to meet special needs. I would have thought that he would have welcomed it.
Mr Redwood
That was then and now is now. Then, we had working banks, a growing economy and people were able to invest and carry the costs. That is not true today, thanks to what the right hon. Gentleman’s party did in government.
Mr Raynsford
I am sorry to have to remind the right hon. Gentleman that it is his Government who have been in office for the past two and half years, over which time the economy, at the very best, has been grinding along on the bottom as the result of his party’s mismanagement of it. I do not, however, intend to go down that route. I want to return to a policy that has received widespread support from Members of all parties, including some of his hon. Friends, who have specifically welcomed my amendment. I hope that after he has listened more to my argument, he will recognise that there is logic to the amendment.
The exceptions policy has evolved to meet special needs without opening the floodgates to more indiscriminate development, which would have otherwise happened because the areas concerned are often highly attractive and desirable areas where there would be considerable financial return from building commercial housing.
Hastoe Housing Association is probably the specialist body in this field and its chief executive, Sue Chalkley, joined me and a number of other experts to talk to the Minister about the issue. I am extremely grateful to him for making time available to hear our case and hope he was persuaded by it. Hastoe describes its role as
“a rural specialist housing association”
that has
“developed affordable homes for local people in more than 200 villages across the south of England. Most of these schemes are on Rural Exception Sites.”
Its briefing goes on to explain how the process works:
“The Parish Council approaches us for assistance because they have identified that local people need affordable housing. We arrange a housing needs survey to evidence the need. We then walk around the village, with the Parish Council and planners, to identify site options.
The sites are very often just outside the village envelope and are usually, but not always, farm land. They are ‘exception sites’”,
as defined by the national planning policy framework. The briefing continues:
“We agree the preferred site with the Parish Council and planners and discussions are held with the landowner about purchase.”
The following is the crucial part:
“The price for an ‘exception’ site is an enhanced agricultural value, averaging £8,000 per plot.
Tenures can be affordable rent or shared ownership. Shared owners cannot buy more than 80% of the equity, so the homes remain affordable for future, generally local, purchasers.
The NPPF allows a small number of market sale homes on exception sites to help the financial viability of schemes where grant subsidy is limited.
The S106 agreement provides landowners and communities with confidence about the future use of the land; that it will always be prioritised for local people and always retained as affordable housing.
The delivery of new homes on exception sites requires willing landowners and willing communities. There are often only one or two landowners in rural communities and, without their co-operation, no homes will be built. We need their co-operation.”
Sue Chalkley stresses that the process gives confidence to all parties that such homes will for ever be kept available for the need for which they were developed, and will not simply become market housing by the back door. The section 106 agreement is crucial to that process. Without it, landowners are inevitably reluctant to provide land, because they can see the risk that sites that they sell substantially below open market value—I have quoted the figure of £8,000 for enhanced agricultural value—might produce a windfall gain to some future occupier who is fortunate enough to find that the property is saleable on the open market. That is the first problem.
The second problem is that communities that have agreed to an element of affordable housing on the basis that it is for people in need would be horrified if the policy could be subverted and the properties could become available as open market homes, rather than be used for the specific needs for which they were approved. Landowners and communities would have a crisis of confidence in the policy if clause 6 was passed unamended.
In Committee, I gave the Minister one example of how the policy could be subverted, but I have now highlighted a number of other ways. The first example that I quoted was an individual working in forestry in a national park being helped by a national park authority to get permission for an individual, self-built home for his needs. If that individual received consent for an exceptions home, but it subsequently became unviable because the builders’ prices had gone up or because he could not get a loan from the bank because of the mortgage difficulties that the right hon. Member for Wokingham (Mr Redwood) mentioned, he could say that it was no longer viable to proceed with the development as agreed. Under the provisions of clause 6, he would be entitled to ask the planning authority—in this case it would be the national park authority—to reconsider the section 106 agreement because it was no longer viable to proceed with building the home.
The legislation gives no let out. It does not allow the planning authority to consider the wider social impacts or the needs of the community. It simply requires it to look at financial viability. If the argument is a sound one—and in the scenario that I have quoted it is—the planning authority will ultimately have to say that the person has a strong case. However, it might decide to refuse the request because if it agreed, it would subvert the exceptions policy and destroy the confidence of local people in it, meaning that landowners would no longer provide land for such developments and local communities would no longer agree to them.
Then, of course, the next ghastly consequence of the clause bites, because at that point the decision is referred to the Planning Inspectorate, which has a remit to consider only viability. It does not have a remit to consider whether a development is desirable, whether it would subvert the exceptions policy, or whether it would result in inappropriate development in a national park or area of outstanding natural beauty. It is required to look only at viability. If it does so on the terms that I have described, it will inevitably find that the section 106 agreement has to be amended or set aside because it prevents viability.
At the moment when the first of those decisions is taken, the rural exceptions policy is dead, because shockwaves will go around the country rapidly and word will get around that this policy that has worked for 25 years; that has helped to secure housing in loads of areas for people in need; that has kept communities together; and that has given employment opportunities to people who need to work on a relatively low wage in such areas is no longer viable because people can no longer be confident that a section 106 agreement will bite and will remain in force. That is the terrible consequence of the Bill.
Mr Redwood
The Government are right to be concerned about the poor volume of house building that they inherited and that has continued for the past two and a bit years. It is right that they need to facilitate more development of more or less any kind. It will, by definition, be affordable because people will now build houses only if they can see a purchaser or tenant with reasonable security.
I have difficulty with the amendments proposed by the right hon. Member for Greenwich and Woolwich (Mr Raynsford). He and I would probably agree that we need more affordable housing of all kinds in this country. The biggest shortage is probably in affordable housing for sale. A large number of people would like to own their own home. It is one of the tragedies of the current situation that people in their 20s and quite a lot of people in their 30s are no longer able to obtain a large enough mortgage to afford the prices of homes in many parts of the country. We therefore have a new generation of people who do not have the access to home ownership that previous generations have enjoyed and taken advantage of.
That has come about because of a mighty land and property price bubble, generated primarily by the mortgage excesses of the previous decade and, to a lesser extent, by the capitalisation of the subsidies that the Government tipped into the housing sector to try to keep pace with the inflationary bubble that the banking and monetary policy was creating. We are using public money to chase a bubble, which makes it very difficult to get affordable housing to people. The public money then does not go around as far as it should, because land and property prices are so high.
How are we going to break into that conundrum? The Government are trying many things. They are trying to get a freer flow of mortgage money and cash to people at cheap prices, so that they can afford more. They are also working on the supply side to try to puncture the land bubble at a sensible rate, so that all homes become more affordable.
The danger with concentrating on so-called affordable homes for rent in the public sector is that, as the right hon. Member for Greenwich and Woolwich says, there is a big lottery element to it. If one was born in the right village or has lived in the right village for long enough, one might qualify for such property, but if one has moved around too much or has lived in a different village, there is no such opportunity. The lottery element is one problem with what the right hon. Gentleman is suggesting.
The right hon. Gentleman said that affordable homes would always be available, but of course they will not, because they will mainly be lived in by the people who first get them. Those people might decide to live in them for 20, 30, 40 or 50 years, so they will not be available to anybody else because they will be providing family accommodation to those people. We might say that that is fine, because that is the purpose of such homes, but they cannot both fulfil the intended role for the family who are lucky enough to get them and be available to a family that does not have them.
That leads to a distributional problem, because if somebody who takes on a heavily subsidised affordable rented house becomes very successful, we rightly do not tell them that they have to leave. That means that someone quite rich and successful can be living in a heavily subsidised house, which does not seem fair. It is better to move to a system of subsidising people rather than properties, by giving them income support and the means to achieve what they need—a house to buy, a flat to rent or whatever. It is subsidising property that has got us into all these awful arguments, and it is sending the wrong signals and drying up the market in all sorts of ways. There are not enough affordable properties, and an awful lot of developers are being put off.
I hope that the Minister will build on the ideas that are currently in circulation to allow some development to take place, and that he will not allow previous plans from better financial times to prevent that development. I hope he will consider the two important points that I have made—that it is surely better to subsidise people in need than particular homes, which can lead to the maldistribution of results both geographically and by individual; and that it is surely better to work on the land market, because it must be our ultimate aim to have a land market at prices that people can afford. Thanks to the mortgage and subsidy boom of the previous decade we are a long way from that, with the result that many of our constituents cannot access the housing that they need and would like.
Roberta Blackman-Woods
I wish to speak to amendments 45 to 48. Clause 6 greatly exercised us in Committee because of the threat that it presents to the future supply of affordable housing delivered through the application of section 106 agreements. No evidence has been provided in Committee or elsewhere of the necessity of the clause or of why section 106 agreements, as they relate to affordable housing, should be singled out for such treatment. Ministers and other Government Members seemed blasé about what the clause could mean for the development of housing, and particularly about the need to create communities that are both balanced and mixed.
I want to make it clear from the outset that we dislike clause 6 very much indeed, and that in tabling our amendments we have sought to curtail its worst excesses. The Minister was not able to provide an evidence base for it, a point noted by many witnesses, such as the National Housing Federation, which stated that
“no evidence has been provided to suggest that Section 106 generally, and its affordable housing component specifically, are routinely stalling developments.”
The Minister has not explained why the clause is necessary given that local authorities are already renegotiating section 106 agreements. The Local Government Association has emphasised that point, and as I have already pointed out to the Minister, the LGA is currently—I stress that word to my hon. Friends—under the control of the Conservative party. It stated that it believed the whole of clause 6 to be
“unnecessary because councils are already responding to changed economic circumstances by renegotiating Section 106…agreements voluntarily.”
Case studies exist from a range of councils, including Cheshire West and Chester, Exeter and Haringey. Given the relatively short time available I will not go into them in much detail, but it is worth pointing out that Cheshire West and Chester council has already renegotiated the section 106 agreement for Winnington urban village, and that Exeter city council has done the same for a series of new developments. There are a lot of examples of that across the country, and I am happy to pass the information on to the Minister if necessary.
Simon Hughes (Bermondsey and Old Southwark) (LD)
Does the hon. Lady accept that there is a problem with the current system? My local authority is run by the Labour party and has done a deal with the biggest developer on the estate near the Elephant and Castle, reducing the agreed planning percentage of affordable housing from 35% to 25%. When I asked, on behalf of those I represent, to see the paperwork justifying the viability of that, the council and the developer said no.
Roberta Blackman-Woods
The right hon. Gentleman makes an interesting point, and I hope that he will persuade Ministers to accept our amendment 44, on how viability is measured. It would require more precise guidance to be given to local authorities of whatever political shade so that they know how they should assess viability. Voluntary agreements, which usually mean negotiating section 106 requirements downwards, are occurring across the country, so we and local councils need a better understanding of what is meant by viability in that context.
We know from the evidence provided by the LGA that on average councils are willing to accept a level of affordable housing about a third lower than the amount set in their local plan. We also know that all but 2% of councils have said that they would be willing to renegotiate section 106 agreements. There is therefore a big question about the need to include clause 6 at all.
It may help the House to understand the full nature of what is wrong with the clause if I briefly go through each amendment and its purpose. Amendment 45 would require a local authority to establish first of all that it is the application of a section 106 housing agreement that is making a development unviable. As we pointed out in Committee, such an amendment would place a sensible requirement on local authorities to establish that it is the section 106 agreement for affordable housing that means that a development cannot go ahead as planned. It would also allow other types of obligation, such as highways contributions, to be put forward to the local authority for renegotiation as part of current section 106 arrangements. Developers can already ask a local authority for a renegotiation of section 106 agreements, so we simply cannot understand why the Government would not want to accept such a basic, common-sense amendment.
The LGA has continued to press that point, stating that it does not understand why the clause addresses only affordable housing when section 106 agreements also fund other forms of infrastructure. It has asked why social housing is deemed dispensable, especially since the current lack of funding has had a particular impact on the delivery of affordable housing, which is greatly needed.
After the May 2010 election, the Government cut the budget for new affordable homes by 60%. Labour invested £8.4 billion in the three years between 2008 and 2011, whereas the current Government will invest just over half of that amount in the four years between 2011 and 2015. At the same time, funding for existing affordable homes has fallen. As a consequence, shockingly, 37% of affordable homes do not meet the decent homes standard. I say to Ministers in passing that when we discussed the matter in Committee, no mention was made of the huge amount of money that went into upholding that standard under the previous Government. Of course, that kept a number of affordable houses in occupation.
We know that private rents are soaring. They hit a record high over the summer and are even higher at the moment. The number of homelessness acceptances is increasing, and over the past year rough sleeping has risen by about 23%. Affordable housing is therefore more necessary than ever, which is why the clause is so dangerous.
The Minister should note that the Local Government Association supports amendment 44. It asks the Minister to set out in regulations the criteria by which viability is to be assessed, and to consult relevant organisations before doing so—the issue raised by the right hon. Member for Bermondsey and Old Southwark (Simon Hughes). The LGA states that the clause encourages have-a-go behaviour for developers, because it offers no reason for them not to try to seek a reduction in their affordable housing obligations from the Planning Inspectorate. The LGA has said that the clause could delay house building and economic recovery as developers wait for the new regime to be put in place, while placing additional resources centrally with the inspectorate, rather than properly resourcing local planning authorities.
Madam Deputy Speaker (Dawn Primarolo)
Order. Just before I call the next speaker, I want to remind the House that the knife falls at 7 o’clock. The Minister has not spoken yet and it will be necessary to hear him speak.
Simon Hughes
I will be brief. I want to make a couple of comments on clause 6 and affordable housing, and to follow on from the comments made by the hon. Member for City of Durham (Roberta Blackman-Woods) on her amendments.
I have concerns about the protection of affordable housing, both as it is traditionally defined—social rents, council rents or target rents—and as it may be defined now or in the future, which is at a higher percentage of market rents. I have raised this personally with the Minister—he has been very helpful—and the Under-Secretary of State for Communities and Local Government, my right hon. Friend the Member for Bath (Mr Foster). I would be grateful if the Minister addresses three questions.
First, how can I be assured that my constituents, local councillors and I, as the MP, will be able to see any deal that is done between our local council and the developer, and be able to ensure that the argument about viability is justified? To be blunt, I do not often believe developers when they say, “The figures don’t stack up.” I have reasons for not believing them. On the south bank, for example, developers got out of an obligation with the local authority on the basis that the figures did not stack up, but, when the properties were sold, the sale price was much higher than the likely sale price they put down. Clearly, then, their profit was greater and they could have afforded to build many more affordable homes. How can my hon. Friend the Minister assure me that we can know publicly what is economically viable?
Secondly, how can we guarantee input into the discussions about the guidance, about which the Minister has spoken and written to me, to ensure that it is effective? Bills are often outline structures implemented by secondary legislation and guidance, so I would like reassurance about the effectiveness of guidance in ensuring viability—accurately defined—and transparency and a common way of assessing it that applies all over England. It is no good having a viability argument in Southwark that is different from one in the north-east; we need a common formula that developers and councils have to follow.
My final question relates to a point made, perfectly properly, by the hon. Lady. How can we provide for the deliverability of affordable housing to go up and down? If the market drops, I could understand developers saying, “We can’t deliver,” although they would need to explain their case publicly. But if, as with the case on the south bank, the market goes up and the money to be made by the developer is greater, the community, represented by the local authority, needs to be able to say, “We want some money back. We want an additional affordable housing component.”
I hope that the Minister will put on the record some of what he has written and spoken to me about and what I have discussed with the Under-Secretary, my right hon. Friend the Member for Bath. I also hope he can reassure us that in the remaining work on the Bill—before it becomes law and in subsequent secondary legislation and guidance—the House can have an input into what is drafted and confidence that we will not lose affordable housing because developers that can afford to deliver on that simply say that they cannot.
Mr Betts
I want to raise a number of points on which I hope the Minister can provide the reassurance that, in previous debates in the Chamber and before the Communities and Local Government Committee, he has not provided.
First, where is the evidence of a problem? The Homes and Communities Agency wrote to me to say that it had had no difficulties with section 106 agreements holding up any of its schemes. The volume house builders, to which I presume the Minister talks—I have been at meetings with them—say that the problem is not the section 106 agreements or the planning system, but getting customers who have access to finance and the confidence to spend it walking through their doors wanting to buy their homes.
The part of the industry most in difficulty comprises the small builders; the volume house builders and larger companies have simply reduced how much they are building. The small builders build on small sites which, by their very nature, do not have section 106 agreements attached to them, yet it is those schemes that have largely stopped across the country, again because of a lack of customers and the fact that banks, by and large, have withdrawn finance from that section of the industry. In that area, there has been almost no growth at all; in fact, the industry is now at a standstill. Once again, that is not due to section 106 agreements.
Mr Redwood
The hon. Gentleman is right that the main problem is the lack of effective demand because of the banking and mortgage collapse, but does he not see that, because of that, there is little or no profit in these prospective developments and that that is why they cannot afford the 106 agreement-type levels common before the bust?
Mr Betts
I put to the right hon. Gentleman a point that has already been made very effectively: why, then, are the Government targeting only the social and affordable housing element of section 106 agreements? What about the rest of the obligations on developers? Do they not cause a problem too? In an earlier debate—I do not know whether the right hon. Gentleman was present—when challenged by his colleagues behind him about the need to ensure proper infrastructure, the Minister talked about the need for the community infrastructure levy to provide the resources to ensure that that infrastructure was provided. If developers have a problem with viability, why is he championing the community infrastructure levy and 106 agreements that are currently providing infrastructure for non-housing elements while targeting the housing element of 106 agreements? Why is that necessary? Again, we have had no answer from him.
On the housing element, I want to return to a point that we discussed in the Select Committee the other day and which my hon. Friend the Member for City of Durham (Roberta Blackman-Woods) just made very strongly. I refer to the crucial issue of mixed housing developments. I would have thought that there would be cross-Chamber support for the idea of mixed housing developments. We do not want people in owner-occupied houses in one place and a smaller number of rented homes completely segregated on a different site. We need mixed schemes where everyone, irrespective of their tenure, can live together side by side. I thought that was the Government’s policy.
We had an interesting discussion about that in the Select Committee. We asked the Minister why, if £300 million was to be made available to provide additional rented homes in order to compensate for the ones lost under section 106 agreements, those properties could not be built on the same sites as the schemes in question in order to increase their viability. As I understand it, that is precisely what my hon. Friend’s amendment 46 would do, so will the Minister respond favourably to it? It would simply put into the Bill the idea that he seemed to welcome in the Select Committee the other day. I look forward to his response.
I turn to amendment 44, which was also tabled by my hon. Friend. The right hon. Member for Bermondsey and Old Southwark (Simon Hughes) made the point about viability and whether we can trust developers when they say that a scheme is not viable. By what criteria will they and the Secretary of State be judged if a scheme is changed and fewer affordable houses are built? The Minister must accept that 106 agreements are not often backroom deals made in isolation between council officials and developers; they are often out there and scrutinised not merely by councillors, but by the public affected by them.
Communities want to know what will be built in their areas and whether rented homes will be available for people who cannot afford to buy. They will be very suspicious if, without such criteria in the Bill, the Secretary of State seems to be doing a deal behind the scenes—whether or not it is called the Planning Inspectorate—which results in the withdrawal of the affordable homes that they thought were being built, and to which they and their families would have access, and different amounts of affordable housing, if any, being agreed for the site. That is why it is important that the Minister states upfront the criteria that will be used to change the affordable housing component that communities will assume will be negotiated for their areas.
Finally, the lack of rigorous time scales in the proposals is worrying. My hon. Friend the Member for City of Durham mentioned the possibility of revisiting the issue after one year and reinstating higher levels of affordable housing for any scheme. That is a really important point, because the worry that some people have about the proposal is that developers will simply say that schemes are not viable; renegotiate them so that less affordable housing has to be provided; and sit on the land and wait till times become more propitious—when they can sell the houses for more, sell more houses and provide fewer for rent. In the meantime nothing will happen. In other words, instead of a stimulus to growth, the proposals could defer development and increase the profitability of the schemes so that fewer affordable or rented houses are produced. The Minister needs to address that worry and include some proper time periods, as my hon. Friend the Member for City of Durham has suggested.
Nick Boles
Everybody is keen for me to explain things and reassure them, but they have not given me a great amount of time in which to do so. I hope you will understand, Madam Deputy Speaker, if I canter through my remarks pretty quickly.
I am a simple soul and do not have a lot of truck with ideology. I want to build more houses now, and I want the absolute certainty that they will go up, rather than a vague, tenuous hope of even more houses at a possible future date. Our discussions in Committee and this evening have persuaded me even more of the merit of this clause, and I am redoubled in my enthusiasm.
Nick Boles
I am sorry, but I will not give way because many hon. Members have asked me for explanations and assurances. I am entirely convinced of the merit of this clause, but in Committee I heard good arguments from Members across the House about ways in which the legislation might be applied that would not produce more houses soon, or could threaten that possibility. I will address two of those arguments, which I hope will offer some reassurance to many hon. Members.
My right hon. Friend the Member for Hazel Grove (Andrew Stunell) and the right hon. Member for Greenwich and Woolwich (Mr Raynsford) raised the issue of rural exception sites. I understand that the likelihood of more land being brought forward in the future to supply affordable housing in key rural exception sites might diminish if the clause were to be applied to those genuinely exceptional schemes. I am grateful to the right hon. Member for Greenwich and Woolwich for organising a meeting with the housing association and the national park authority, and to my right hon. Friend the Member for Hazel Grove for attending it. I have been persuaded by the principle of their argument, but the precise way that the right hon. Gentleman’s amendment takes account of the issue is not necessarily right and I hope I can persuade him not to press the amendment to a vote. I am currently looking at proposals that will be brought forward in the other place to achieve a carve-out for rural exception sites from this provision.
I have also been persuaded by some of the arguments about developers achieving a more favourable affordable housing agreement and then sitting on it. That is why, unprompted, the Government have clarified that any affordable housing agreement renegotiated by the Planning Inspectorate will survive for three years but return to its previous level at the end of that period. If the developer has not built out on the basis of the new, lower, affordable housing agreement, the agreement will return to the previous higher level and they will have to continue to build it out at that level.
Simon Hughes
Will the Planning Inspectorate system ensure that anybody can see the figures as well as the facts?
Nick Boles
I was coming to that. Currently, I am glad to say, the Planning Inspectorate is required to consider in its decision only evidence that is published or available publicly. It is not allowed to take into account anything that it is given on an entirely confidential basis. We intend to apply that principle to its decisions on viability under this clause, and through guidance we will urge local authorities as strongly as possible to adopt the same policy. Currently there is not quite the same expectation, but being a proper localist I am not in the business of compelling local authorities to do such things. However, I reassure my right hon. Friend that we will be nudging them hard.
The further financial support announced at the same time as measures in the Bill—£300 million of subsidy and a further £10 billion of guarantees—was also raised. As I explained in Committee—it is important to repeat it in the House—the subsidy is awarded to particular providers of affordable housing, not particular schemes, and Members across the House will want provision of that subsidy and its allocation to different providers to be based on value for money. We all want more, rather than fewer, houses for the amount of money available. We cannot allocate money to solve the problem of a particular site, because that would not meet the value-for-money test, as some sites will represent worse value for money than others. It is, therefore, right to retain the discretion to give the subsidy where value for money is greatest, but there is nothing to prevent providers who have sites that are affected by such renegotiation from coming forward with proposals for that subsidy and guarantee. If they can make the case that a site represents a good place to invest the Government’s money, there is every chance they will secure some of that subsidy.
What we are trying to achieve is simple. Many local authorities, of all political stripes, have understood that some agreements were based on market values that no longer pertain, or on market conditions that are no longer in place, and are therefore impossible for any developer to build out. Those authorities—and I congratulate them on it—have voluntarily renegotiated the affordable housing elements of their section 106 agreements, and sometimes other elements, to unlock activity and house building now. The Government would like to see every local authority do that willingly, off its own bat, without the application of this clause, and transparently so that the local population can see why it has taken those decisions.
A common thread running through this Bill is that we want many of its measures never to be needed because local authorities have acted first. That is true of clause 1 and equally true of this clause. We want local authorities to take responsibility, and instead of fetishising an agreement that sets out a vague target for affordable homes that might be built, we want them to do whatever it takes, pragmatically and practically, to ensure that homes are built. I have accepted many suggestions from hon. Members on all sides of the House, and I have learned a great deal from those more experienced than me about such things as rural exception sites and the way viability is assessed.
I hope I have persuaded hon. Members that the Government are genuinely trying to make the legislation work to produce more houses now, while retaining the important principle of mixed communities, emphasised by Members across the House. We want mixed communities to remain a key theme; we do not want gated communities. That is why the new section 106 affordable housing agreements will return to their previous level after three years if they have not been built out fully. The Government hope and would prefer local authorities, rather than the Planning Inspectorate, to renegotiate affordable housing agreements. The amendment is a last resort to prevent a very few pig-headed local authorities from doing what is in the interests of their own people and ensuring that more houses get built quickly, rather than waiting for some never-never land where that unrealistic agreement is finally translated into bricks, mortar and roofs over people’s heads.
This debate, and those in Committee and on Second Reading, have shown that the Government—two parties with very different philosophies—believe in practical measures to get things done and make people’s lives better. All too often the Labour party prefers postures, statements and wild aspirations with absolutely no explanation about how it will deliver them. On that basis, I hope that the right hon. Member for Greenwich and Woolwich will withdraw his well-intentioned and sensible amendment with a view to an alternative being brought forward in the other place. I urge the House to resist the amendments tabled by the hon. Member for City of Durham and her hon. Friends.
Mr Raynsford
I am slightly disappointed that the Minister cannot accept the wording of my amendments. I took some care with the wording in Committee—indeed, one of my amendments was treated as poetic, which was a rather attractive description. On this occasion, despite the affront to my amour propre and the fact that the Minister has not accepted the wording, I accept his good intentions and the fact that he has agreed for the Government to introduce amendments in another place. I therefore beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed: 46, page 6, line 40, at end insert
‘or,
(e) request that the requirement is to be met in part, or in full, by central government funding allocated for the delivery of affordable homes.’.—(Roberta Blackman-Woods.)
Ian Murray (Edinburgh South) (Lab)
I beg to move amendment 59, page 32, line 9, leave out clause 25.
Madam Deputy Speaker (Dawn Primarolo)
With this it will be convenient to discuss the following:
Government amendments 22 and 23.
Amendment 60 in clause 25, page 32, line 13, leave out ‘or becomes’.
Government amendment 24.
Amendment 37, page 32, line 14, at end insert—
‘(za) the individual has been an employee of a company for at least two years.’.
Amendment 61, page 32, line 15, leave out ‘the company’ and insert ‘a majority of the employees of the company’.
Government amendment 25.
Amendment 62, page 32, line 21, after ‘£2,000’, insert—
‘if the individual has been an employee of the company for less than three years, increased by an additional £2,000 for every additional year for which the individual has been an employee of the company’.
Amendment 40, page 32, line 23, at end insert—
‘(1A) The Secretary of State shall make by statutory instrument such regulations as are necessary to safeguard an employee who declines to enter into an agreement under subsection (1) from any consequential detriment.
(1B) The Secretary of State may not make any regulations under subsection (1A) unless a draft of the statutory instrument containing the regulations has been laid before, and approved by, a resolution of each House of Parliament.’.
Amendment 41, page 32, line 23, at end insert—
‘(1C) The Secretary of State shall issue such guidance as is necessary to safeguard any person who declines to enter into an agreement under subsection (1) from any consequential reduction or withdrawal of any state benefit to which they are entitled by virtue of their current employment status.’.
Amendment 63, page 32, line 23, at end insert—
‘(1A) The Secretary of State shall provide by regulations for there to be, for every company having employee shareholders, a director who is elected by those employee shareholders.
(1B) Regulations under subsection (1A) shall be made by statutory instrument and shall not be made unless a draft has been laid before and approved by resolution of each House of Parliament.’.
Amendment 39, page 32, line 24, leave out from beginning to end of line 11 on page 33.
Government amendments 26 to 31, 64, 65, 32 and 66.
Ian Murray
We now come to the worst clause in a bad Bill. In the words of the Christmas song, ’tis the season to be jolly, but sadly this out-of-touch Government are dampening the festive spirit with a measure that embodies the characteristics of the classic Dickens character, the miserly employer Ebenezer Scrooge, at his worst. I would never accuse the Minister of State, the right hon. Member for Sevenoaks (Michael Fallon), of being such a character, but I hope that he will prove to the House that he is not, by removing clause 25 from the Bill.
As in that Christmas tale, let us look back at the ghost of Beecroft past. It was back at the beginning of October when, much to everyone’s surprise, the Chancellor announced the Government’s intention to introduce a new employment status. A company would be able to offer an employee shares in its business in exchange for some of that individual’s rights at work. The proposal has had a quick passage since the Chancellor’s speech, in which he spoke of
“owners, workers and the taxman, all in it together. Workers of the world unite.”
I have to give it to the Chancellor; he has certainly fostered a sense of unity. He has unified outright opposition to this policy from every quarter. It has received a lukewarm response, at best, from the business community, and it has been roundly trounced by employee organisations, trade unions, business leaders and charities. Only five of the 219 consultation responses welcomed the proposals. We therefore believe that our amendment 59 is the only acceptable option, as we can see no way in which the clause could be amended to make it more palatable. I appreciate that amendments have been tabled by my hon. Friend the Member for Hayes and Harlington (John McDonnell), who is in his place, but, to be honest, he is trying valiantly to make a silk purse out of a sow’s ear.
As my right hon. Friend the Member for Leeds Central (Hilary Benn) said on Second Reading, this measure is about cash for repeal. For as little as £2,000-worth of shares, an employee would be able to give up legal rights such as their right to training, their right to unfair dismissal protections, their right to a redundancy payment—even though their shares might be valued at less than the statutory redundancy payment—and their right to flexible working, which would fly in the face of announcements made by the Department for Business, Innovation and Skills only last week.
Mr David Anderson (Blaydon) (Lab)
My hon. Friend is making a very good case. Is it not clear from what Conservative Members have said that we know exactly what this is about—it is about the complete disregard for workers’ rights by Government Members? They believe anything can be resolved by waving money at it. It is absolutely disgraceful that we even have to discuss this issue tonight. I hope the Liberal Democrats will have some of the courage that they have not shown in two and a half years so far and vote against this measure tonight.
Ian Murray
My hon. Friend makes an incredibly strong point. If the clause had been drafted to increase employee ownership without the exchange for rights, we would have fully supported it. What the Government are doing, however, is saying to employers, “If you wish to buy out the rights of your employees, you may do so for as little as £2,000 without any regard whatever to the protection they have against unfair dismissal and redundancy.” Crucially, in response to my hon. Friend the Member for Blaydon (Mr Anderson), this flies in the face of the Government’s flexible working policies that they were trumpeting just last week. In addition, the people who will be hit worst by this policy will be those who are not able to seek advice and those who are not members of trade unions or other associations.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)
We Labour Members have enjoyed my hon. Friend’s Dickens metaphor. He will be aware that what Dickens disliked above all else was the Liberal party of the late 19th century, which believed in a laissez-faire economy—and the devil take the hindmost. What does my hon. Friend think Dickens would make of this Liberal Democrat party supporting such a bonkers idea?
Ian Murray
That is a worthwhile intervention from my hon. Friend, who is an historian himself, so I could not possibly argue against the valuable points he has just made. It is extraordinary that the Liberal Democrats are bringing forward this proposal and are wholeheartedly supporting it. The Business Secretary is not here, and the Business Secretary was not here for the Third Reading or vote of his own Enterprise and Regulatory Reform Bill, in which provisions affecting the rights of workers were pushed through. If the Liberal Democrats do not see that this is Beecroft by the back door, they should have a look at some of the information being put out by the business community and others.
I was quoting Justin King a few moments ago. He said that we
“should be making employing people easier and less costly.”
That sounds very much like our national insurance holiday, which is part of Labour’s five-point plan.
I referred in my opening remarks to Ebenezer Scrooge—a cold-hearted, tight-fisted and greedy character who treated his employees appallingly. I believe that the overwhelming majority of hard-working and entrepreneurial businesses in the UK are exactly the opposite, and understand that the relationship between employers and employees in the workplace is critical for good business.
We know the Minister has no appetite to take these “shares for rights” proposals forward, and I think he knows that the Government are opening the opportunity for Scrooge-like employers. Let us remember, however, the tale of that character's redemption when he sees the error of his ways. This is a Christmas tale: the Minister and Government Members should take heed and bin the ghost of Beecroft future. They still have the chance to remove this nasty, Dickensian clause from the Bill, and I look forward to them joining us in the Lobby this evening.
Andrew Stunell (Hazel Grove) (LD)
I tabled amendments 40 and 41. I look forward to hearing what my right hon. Friend the Minister has to say about Government amendments 64 and 65, which go a long way towards meeting the concerns that lie behind amendment 40.
I agree with the hon. Member for Edinburgh South (Ian Murray) in one respect. When the Committee took evidence, we heard from a succession of Jonahs. Neither the TUC nor the CBI was exactly over the moon about the Government’s proposals, and, indeed, all the outside organisations that gave evidence had criticisms to make. I particularly noted the words of a senior employment lawyer, who said, in plain terms, that he would not encourage any of his clients—that is, employers—to take advantage of the measure. The CBI described it as a very small niche product. However, my amendments are intended to deal not with circumstances in which it will be a niche product, but with circumstances in which all the evidence that the Committee received turns out to have been too pessimistic about its success. If that proves to be the case, it is important that the Minister’s plainly expressed intentions are clearly met, and that no employees are forced to accept a deal that they do not consider to be suitable for them and their circumstances. Amendment 40 makes it clear that there should be no detriment to such employees.
I am happy to say that Government amendments 64 and 65 appear to cover exactly the same territory, and—as is the way with Government drafting, as opposed to Back-Bench drafting—probably more thoroughly and comprehensively than I did. I therefore do not intend to press amendment 40, although whether I do so will depend on what the Minister says about the Government amendments. I assume that they are intended to provide safeguards against two possible outcomes. Amendment 64 would prevent an employee who turned down a contract of this kind from discrimination or other disadvantages in the workplace, while amendment 65 would ensure that the dismissal of such an employee constituted an unfair dismissal in employment law. That more or less covers what I was trying to do in amendment 40.
I have not yet been able to detect a Government amendment that matches amendment 41, but, again, I look forward to hearing what the Minister has to say. My amendment is designed to deal with circumstances in which a vacancy arises in a firm that has adopted the proposed structure, and a jobcentre sends someone to the firm to apply for the job. As was pointed out by the hon. Member for Edinburgh South, the current policy of the Department for Work and Pensions is, rightly, that those who are receiving benefit and are directed to vacant posts have a duty to consider them, and, if they constitute reasonable offers of employment, to accept them. If they do not do so, their benefits will be suspended or withdrawn. My amendment proposes that if people refuse jobs because they are offered an employee-owner contract, that will not be grounds for the suspension of their benefits and for them to be put at a disadvantage. If they do not have some protection of that sort, it will be impossible for the Government to fulfil their clear commitment, which was confirmed by the Minister in Committee, that no one would be forced into such a relationship. Again, I look forward to hearing from the Minister, and, having done so, I may or may not choose to press amendment 41.
I hope it is clear to the House that my central objection is not to a new or alternative type of employment contract. I have no problem with that. The problem will arise if the power relationship between employer and employee is so out of balance that the employee does not have the discretion and the free will to refuse and to do something else instead. What I wanted to do, and what my Liberal Democrat colleagues wanted me to do, was ensure that neither those currently in employment nor those prospectively in employment would suffer any detriment in relation to the state benefits system. I look forward to hearing the Minister’s response.
John McDonnell (Hayes and Harlington) (Lab)
I heard what my hon. Friend the Member for Edinburgh South (Ian Murray) said about the inability to amend this part of the Bill, and I sympathise with his view, but I thought that it would be useful for us to test whether the Government’s intention was to adopt a genuine approach to developing the concept of employee ownership or whether this was merely an attack on employment rights. I thought that it would be useful to set out how an employee ownership scheme could be introduced, and that if the Government’s intention was indeed to develop the concept of employee ownership they would support my amendments, or at least commit themselves to tabling amendments to the same effect.
The argument about employee ownership relates to economic democracy. I believe that we should socialise our economy. I believe that individual workers at every level should have control over their own working lives, and that that means democratic control of the firm, the region and the nation. Over the years, the House has debated a variety of methods of bringing that about. We have discussed public ownership, and nationalisation as part of that; co-operation; mutualisation, by which I mean true mutualisation and not the alternative description of privatisation employed by the present Government; and worker ownership models, which have included the extension of employee ownership. A range of models have been discussed over the years, including the Scandinavian model—in which share entitlements are given to the workers and then put in trust, gradually amounting to control of the firm itself—and the individual employee ownership model proposed in the Nuttall review.
Jeremy Corbyn (Islington North) (Lab)
Will my hon. Friend confirm that none of the interesting employee ownership and co-operative models that exist throughout the world depend on individual employees giving up their statutory rights to redundancy, maternity pay or access to an employment tribunal?
John McDonnell
Quite the reverse, and as employee ownership has developed in this country, all the arguments have been about the enhancement rather than the withdrawal of rights. However, that can succeed only on the basis of an open, transparent commitment to a partnership in the company concerned. The purpose of the amendments is to offer an alternative to the Government if they are serious about employee ownership.
As I was saying, my proposals are very much in line with the Nuttall review, published in July this year. I propose that when someone has worked for a company for two years, which is the normal qualifying period, and the majority of the other employees agree, that person can become an employee owner and can be awarded the first £2,000-worth of shares. As in normal employee ownership schemes, the longevity of the employee’s commitment to the company is rewarded with the further allocation of shares, usually on an annual basis.
I suggested there should be a further £2,000-worth of shares for every year of service. I am unsure about the nature of the shares that will be offered, but employee ownership shares are normally full voting rights shares; that would be the normal way of developing an overall co-operative. My amendments also suggest employee owners should have the right to elect a director employee owner on to the board, to represent the employee owners. That, too, is in accordance with the standard model of employee ownership. My amendments would also ensure there is no relationship between the award of shares and any reduction of employment rights; I have deleted the measures relating to the exchange of employee rights for the award of shares.
The model my amendments propose is the standard model for an employee ownership scheme, as called for in a wide range of consultations over the years, and recently by the Employee Ownership Association. If the Government do not accept this model, I will fear that their proposals are, in fact, designed to attack and undermine employment rights. In fact, I am now convinced that that is the case, on the basis of the Government’s responses to the consultation. The time scale for the consultation was extraordinary. The Government proposal was announced on 8 October, and the consultation started on 18 October and was completed on 9 November. That is one of the fastest consultations for a major proposal under any Government in recent times, apart from for emergency legislation.
Ian Murray
That is an important point. Furthermore, not only did the consultation response come in on the morning we were debating these measures in Committee, but the Government completely ignored it, because the only amendment they committed to introduce was to change the name from employee owners to employee shareholders.
John McDonnell
The fact that there was just one cosmetic change shows that the consultation was ignored.
In support of my amendments, it is worth putting on record exactly what the consultation proposed. It found that the majority view was that no one should be asked to exchange their employment rights for shares. The Employee Ownership Association forged an alliance with the Fawcett Society, Family Lives, the Chartered Institute of Personnel and Development, the Family and Parenting Institute and Working Families. They described the consultation response as anti-democratic, rushed and poor quality, even containing a series of factual errors.
The Office for Budget Responsibility found that the Government proposal is more likely to be a cost for the Exchequer than a gain for the overall economy. The OBR said it will cost £1 billion by 2017-18. Others have described it as not particularly welcome. Businesses have certainly not welcomed it. Out of 184 responses to the Department for Business, Innovation and Skills, only two individuals and one organisation voiced support, saying they may take it up. There is hardly a clamour for these measures, therefore.
In none of the evidence submitted in the consultation did anyone describe the giving up of employment rights in this way as being likely to remove barriers to significant increases in employment. The Government’s reform flies in the face of the Nuttall review, too. We thought that there was to be a lengthy period of negotiation and discussion, and the Government would then come forward with proposals for the extension of employee share ownership, which would, in fact, probably receive cross-party support.
Gregg McClymont
My hon. Friend mentions the astonishing fact that the OBR says this reform will cost money at a time when, as the Government keep telling us, money is so very tight. Is my hon. Friend surprised that this bonkers reform will cost money? The reform is based on the work of Mr Beecroft, who admitted under examination that there was no evidence whatever to support his proposals, and that they were mainly based on anecdotes and personal experiences.
John McDonnell
I am trying to find a Dickensian analogy; perhaps it should be great expectations met by hard times.
I was interested in the TUC response which was supplied to Members. It addressed the potential for this reform to be used for tax-avoidance purposes, through people switching their share schemes and entering into new ones. It appears, therefore, that although there will be no gain in terms of increased employment, this reform will be used as yet another tax dodge.
These proposals also threaten flexible working. As the Fawcett Society says, they will discriminate in particular against women and those who are carers. I thought Members across the House supported flexible working, but it is now suddenly seen as a burden that is to be negotiated away and lifted off businesses. The Equality and Human Rights Commission also expressed concerns about the potential of the Government’s proposals to allow discriminatory behaviour.
My overall assessment is therefore that these proposals are not intended to promote employee ownership at all; rather, they are an attack on employment rights. If the Government were serious about promoting employee ownership, they would either accept my amendments or work them up into a more definitive scheme. I am convinced we would then achieve cross-House consensus in favour of such a scheme. There must not be any link to an exchange of employment rights, however. As I have said, far from serving to promote employment and therefore be a benefit to the economy, it appears these reforms will be an expensive tax avoidance scheme, with up to £1 billion lost to the Exchequer.
I urge the Government to think again and to bring forward proper proposals. As on all such occasions, I give them this warning: legislate in haste and regret at leisure. That is what will occur as a result of these proposals. I am extremely disappointed that the debate has been dragged into the gutter, with attacks on working people. Over the years, so many of us have advocated democratising companies, the benefits of worker involvement in companies and the benefits of extending ownership in companies so people have greater control of their working lives. The Government have demeaned themselves by tacking such proposals on to this Bill in this way. Fresh thought is required if we seriously want to legislate for employee ownership schemes.
Gordon Birtwistle (Burnley) (LD)
My first question is: where are all the Members who are supposed to be supporting this Bill?
I believe in freedom of choice. If an individual wishes to work for a company on a contract such as that which is proposed, they should be able to do so. That will not be the case in the big industries. Rolls-Royce and Jaguar Land Rover are not going to get involved. This scheme is for small niche companies in the high-risk sectors, such as high-tech firms and website designers, which employ recent graduates who want to get involved in such firms because they hope they will become a second Google. These companies are the gamblers that grow and create jobs in the future. I cannot understand why this Parliament should stand in the way of these people and say, “I’m sorry, but you can’t do that, even if you wish to do so.”
I think back to the 1960s when I was 24 and I had just come out of my apprenticeship. I went for a job as a contract draughtsman. I was offered two alternatives by the company. It was a good company, and it said I could have all the schemes it had, such as holiday pay and a contract for 44 hours of work a week—those were the hours we used to work in those days—and I would have a fixed rate. Alternatively, the company said I could have none of those schemes and have four shillings an hour more than everybody else was getting. I was keen to earn extra money, because I wanted to save up and put a deposit down on a house, so I decided not to have any of the conditions laid down by the company. I decided, on my own back, as I had the freedom to do so, to take extra money for working as many hours as I wished while having no contractual employment. I did that for two years and managed to raise enough money to put down a deposit on a house. That was my choice and it was the company’s choice to offer it to me. Other people worked there who wished to carry on with the conditions they had, but other young guys like me wanted to raise as much money as they could to put down deposits on houses, buy new cars and so on, and they went ahead and did it. They were free to do it—there was no pressure.
Mr Chuka Umunna (Streatham) (Lab)
The hon. Gentleman’s central argument is that the proposed scheme is voluntary, but my problem, in addition to all the comments made by my hon. Friend the Member for Edinburgh South (Ian Murray), is that the Government have singularly failed to give any guarantee that a prospective employee in receipt of JSA who does not wish to take up such employment will not be penalised for not wishing to take a job without basic fundamental rights. That is, in fairness, the point that the right hon. Member for Hazel Grove (Andrew Stunell) has made: we have received no guarantees whatsoever. How can the hon. Member for Burnley (Gordon Birtwistle) say that this is voluntarily, if people could face such sanctions?
Gordon Birtwistle
I thank the shadow Secretary of State for his observation. My name is on the amendments tabled by my right hon. Friend the Member for Hazel Grove (Andrew Stunell) and I am waiting for the Minister to answer the questions they raise. I am sure he will give us some advice. If a the jobcentre advertisement for a job makes it clear that it involves giving away rights in return for shares, the person going for it will know that before they apply and will be completely open to the idea. If the jobcentre does not advertise those conditions, and the applicant is told about them only when he goes in for interview, my concern is whether he will still get his benefits when he tells the job centre the conditions he has been offered. I hope that the Minister will advise me that that applicant will still get their benefits, and if he does not I shall be extremely concerned and will have to consider which way to go. However, I am sure that the queries raised by our amendments will be answered.
Sheila Gilmore (Edinburgh East) (Lab)
The hon. Gentleman does not appear to be aware that even if someone refuses to go for an interview for a job because they have read the details and seen that they would have to give up their rights, they could be sanctioned—that is, they could lose benefit—because of that.
Gordon Birtwistle
The hon. Lady will be anxious to hear the Minister’s answer to that question, which our amendments put to him. We have tabled the amendments to tease the answers out of him—if she had proposed an amendment, she would have received an answer to her question, but she has obviously merely turned up today to try to stir things up.
Amendment 41 will, I hope, clear this question up. I hope the Minister can give us an answer, and if he does not we will have to ask other questions at another time. My main concern is about an applicant who is sent for a job by the jobcentre and finds out only when they arrive that it is a share-ownership job. Will their jobseeker’s allowance be affected if they refuse it? I am reasonably confident that it will not.
This will only happen in small niche companies. I do not think that we have the right to stand in the way of people who wish to get involved in such businesses, to get on, to take a gamble or to be involved in a company that will grow, so that their £2,000-worth of shares grows with it. There might well be a second Google somewhere, but I do not want to tell people that although they might have wanted to make those decisions, I did not want to give them the opportunity. That is why I support these proposals.
Ian Murray
I am very grateful to the hon. Gentleman for giving way, as he is being incredibly generous in doing so. Does he not accept that in his example from the 1960s—50 years ago—taking extra money in return for rights was completely voluntary? He could have refused that, but many of the examples we are hearing involve cases that will not be voluntary, as people might be coerced to give up their rights for worthless shares.
Gordon Birtwistle
I accept that in my case it was voluntary. I could have taken holiday pay, but I would rather have had the four shillings an hour more, which is very little today but was a lot of money in those days, to save up. I am reasonably confident that what I will hear from the Minister will lead me to believe that the proposal is voluntary enough. I am sure that it is voluntary and what I have read in the Bill does not suggest that people will be forced. I think the proposal is okay, but it is a small idea for niche businesses. Major companies will not be offering the option, only small companies, and we do not have the right to stand in the way of people’s freedom to take it up if they wish.
Mrs Mary Glindon (North Tyneside) (Lab)
I want to speak about this group of amendments because in recent weeks, like many other hon. Members in the Chamber, I have been contacted by a number of my constituents who are concerned about the Bill and would rather see it rejected. In the past week, I received a constant flow of correspondence specifically on clause 25 and not one of those people had anything good to say about it.
My hon. Friend the Member for Hayes and Harlington (John McDonnell) made a good case for his amendments and the coalition partners, the right hon. Member for Hazel Grove (Andrew Stunell) and the hon. Member for Burnley (Gordon Birtwistle), have tried to ease the severity of the clause with their amendments. As my constituents have identified, however, the clause has no saving graces. The recent consultation showed that as few as five out of 200 businesses say that they would want to use such a scheme, but the Government want to see it rolled out. They want employers to take it up, as they would get a far greater pool of employees to choose from, and it is hoped that potential employees would have a better opportunity of finding employment—but at what cost? If someone has to forfeit their rights on unfair dismissal and to redundancy pay, that cannot be a price worth paying.
My constituents have asked time and again what the real value of shares could be. Once the shares are paid for, national insurance and pay-as-you-earn taxation will come into play. Forfeiting all those rights for a hefty tax bill does not make sense. One of the strongest arguments for me is that the clause is bad for women, as parents, and carers, who need flexible employment to have the dignity of working while they carry out their valuable roles. Such employment gives them the opportunity to be outside the home and to feel not only that they contribute by looking after their loved ones but that they play a valuable role in society, as well as providing them with a social link with the wider world.
By not having flexible working, people also forfeit the right to training. How does that fit into a Bill about growing the economy? Training for personal and professional development is crucial for firms to grow and expand. We cannot have a standstill work force who do not keep up with all forms of training. People do not feel valued if they do not have that development. We have seen what a difference investing in people makes to firms.
The whole scheme smacks of inequality and goes completely against the equal opportunities that have been so hard-fought for. We could go on: the loss of maternity rights would be something else that disadvantages women.
The clause should be deleted. It is completely against the rights of workers and it will do nothing to grow businesses.
Mr Iain McKenzie (Inverclyde) (Lab)
I firmly believe that there is nothing in the Bill to address the root cause of the problem that faces us—the Government’s economic failure. Our economy is only just back to the size it was a year ago, and we have seen a double-dip recession and increased Government borrowing. Adding “growth” to the title of the Bill will not make it so. Even the Prime Minister admits that we cannot legislate for growth.
As we have seen, the Government’s economic plan has plunged Britain into the longest double-dip recession since the second world war. To cover that, they have hurriedly pulled together this flawed piece of legislation. There is nothing in the Bill to address our problems of economic failure; instead, the clause on employee owner shares for rights will only make it an attack on workers’ rights.
The proposals announced by the Chancellor will allow businesses to offer individuals contracts and a new employment status to make them employee owners. Under that new status, employee owners will receive shares in the employer’s company. However, as we know, there is always a catch: in return, employee owners will have to give up certain employment rights, including those on unfair dismissal, statutory redundancy pay and requesting flexible working and training. The scheme has not won support from the business community; a 33-week consultation had more than 200 responses but only five businesses said they would be interested in taking it up.
Labour is in favour of employee ownership, but not coupling it with slashing employment rights. Doing away with people’s rights at work is wrong in principle and will do nothing to bring about growth in our economy.
There are concerns about the full cost of the scheme. It has been said that
“the cost is expected to rise towards £1 billion,”
and:
“Uncertainties abound like assumptions on take up rates, the average value of shares that are entered into the scheme, the extent of tax planning and the timing of disposals.”
According to the Office for Budget Responsibility, a quarter of the £1 billion additional cost—£250 million—is expected to arise from tax avoidance as a result of the scheme.
Slashing the rights of people at work is wrong in principle and will not help bring about jobs and growth; the proposal is yet another example of how out of touch this Government are. The scheme has not won support from business; it has received at best a lukewarm reception. Not even the CBI supports the proposals and called them
“niche…and not relevant to all businesses.”
As we have heard, the chief executive of Sainsbury’s was not exactly over the moon about them either. He was hardly embracing them when he said:
“This is not something for our business...What do you think the population at large will think of businesses that want to trade employment rights for money?”
We all know what we think about that.
Jim Shannon (Strangford) (DUP)
Earlier on, there was a reference to Ebenezer Scrooge. Is it not more a case of the grim reaper going deep into the rights of employees?
Mr McKenzie
The hon. Gentleman makes a very good point. There are stark connotations for employees across the country if the scheme is put into practice.
Jeremy Corbyn
My hon. Friend is making an important point. Does the proposal not indicate the Government’s thinking? They are quite prepared to offer the carrot to many companies that they can simply buy out rights at any time in the future. Next time it might be a cash offer or something like that. We legislate to protect all workers. We legislate for all women to have maternity rights. We legislate for everybody. It is not up to a company or a Government to pick and choose who should be eligible for those rights.
Mr McKenzie
My hon. Friend makes a very good point; I could not agree more.
The Chancellor proclaimed that the proposal represented
“owners, workers and the taxman, all in it together,”
but the measure is divisive, goes against the spirit of one nation and risks creating a two-tier labour market across the country.
Offering employee owner contracts, where employees effectively sell their employment rights for shares, is unlikely, if ever, to deliver the highly motivated, engaged work force employers need. Ministers should be making it easier to hire employees, not easier to fire them.
Labour’s jobs plan includes tax breaks for small firms taking on extra employees. Labour supports employee ownership, but not coupling it with slashing employment rights. The US National Centre for Employee Ownership, one of the world’s leading groups promoting share ownership, has also criticised the scheme. The proposal smacks of fire at will. Although Ministers, including the Business Secretary, have claimed they are not going to take forward Mr Beecroft’s fire at will proposals, in practice they are introducing them by the back door. Ministers are trying to introduce the scheme without proper consultation or discussion, or indeed any real support.
The way the scheme will operate in practice and its ramifications are unclear. There are concerns about other ways in which the scheme could have an adverse impact on employees. Will jobs be advertised as being only employee owner and will employers be able to impose the scheme on individual employees or groups of employees? What safeguards will there be to ensure that the scheme is voluntary for existing employees, as Ministers claim?
The clause is a disaster for all, be they employees or employers, and it will not deliver growth in our economy. Businesses that utilise the scheme in recruiting will be recruiting from a smaller pool of talent, which will risk their not being able to take advantage if ever a real recovery comes about.
People giving up their hard-fought employment rights in return for a few shares beggars belief and takes this country back to the dark ages of employment practice. I ask that the clause be dropped.
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
We have had a good and reasonably balanced debate about the merits of the new employment status created by clause 25. I fully accept that there are concerns about it. Some of them are genuine and I hope to address them a little later. Some are based on a misunderstanding of the intent behind the new employment status and others take no account of the Government amendments that have already been tabled.
I will try to address all the points raised by hon. Members, but I first want to resist the casting of the hon. Member for Edinburgh South (Ian Murray), who suggests that I represent Scrooge in “A Christmas Carol.” Perhaps I could refer him to a better character, Scrooge’s older employer, Fezziwig, who was noted for the magnanimity he displayed towards apprentices and young workers and for the generosity of his Christmas party. Such generosity, I suggest to the House, is reflected in the new opportunities we are extending for share ownership and in the very generous tax relief that comes with it.
Clause 25 creates a new employment status—employee shareholder—in addition to the existing employment statuses of worker and employee. The United Kingdom already has differing types of employment status with different levels of rights and different obligations, to allow businesses and individuals to choose the right type of contract that suits their particular circumstances. It is important, therefore, before we come to consider the new status, that the House understands the differences between existing employment statuses, because each has different employment rights.
Employees, for example, have all employment rights, whereas workers do not have unfair dismissal rights, do not enjoy the right to statutory redundancy pay and do not have other statutory rights. Workers, however, do have the right to the national minimum wage and do have protection against unlawful deductions from their pay, paid annual leave, rest breaks and protection against discrimination, including on the ground that they work part-time. The statuses of worker and employee are distinguished by the level of control and obligation that the employer has over the individual. The employer has a higher level of control over an employee—he can dictate how, when and what an employee does, whereas an employer cannot dictate in the same terms how a worker carries out his work.
The new status that we are considering carries the same level of control as an employee, but links employment with shareholding in the company. Individuals in the new status will have similar rights to employees, but they will not have the right to statutory redundancy pay, the statutory right to request flexible working unless they have returned from parental leave, time off to train, or unfair dismissal rights except for automatically unfair reasons. The new status is designed to give companies more choice in the type of employment contracts they can use to structure their work force. But the flexibility that businesses have is not restricted to different types of employment status. Businesses may already choose to take on somebody as part-time, full-time, permanent or for a fixed period. The important principle underlying the Government’s approach is flexibility. We want to allow businesses a choice of which type of employment contract to use. This new status gives companies an additional option, should they wish to use it. They do not have to use it if it does not fit their business model.
We consulted in October and November on how we could best implement the new employment status. Our consultation lasted for three weeks and we received more than 200 responses. Those were very helpful, along with the discussions that we had on Second Reading and in Committee, and helped us address the areas of the policy that need improving with the set of Government amendments before us. Before I deal with those, let me consider the points raised on the other amendments.
The hon. Member for Hayes and Harlington (John McDonnell) tabled amendments 37 and 60, which would limit how companies can use the new employment status so that, in effect, they could offer it only to existing employees with at least two years’ service. The Government are creating a further employment status to provide additional flexibility and choice for companies in managing their work force. Allowing businesses greater flexibility in how they manage their work force encourages growth and confidence, and the difficulty that I have with the hon. Gentleman’s amendments is that they are restrictive and remove choice from employees and employers.
The employee shareholder status is a novel way for companies to arrange their work force. From its inception, it was principally intended—I think this was the point made by my hon. Friend the Member for Burnley (Gordon Birtwistle)—for fast-growing new companies. The amendment to limit the new status to existing employees would deter or even prevent many newer companies from making use of this innovative and flexible model. It would also prevent new or newly recruited employees from taking advantage of the status that existing employees might already enjoy. As I have just reminded the House, we decided to create a new employment status to give companies additional choice about the contract types they can use for those who work with them and for them.
Amendment 61 would cause inflexibility in the decision-making process for companies by giving their existing work force a veto over the type of employment status which the company may choose to use. The result of the inflexibility caused by amendment 61 would come at a time when companies need to be agile and innovative to respond to changing economic circumstances. Furthermore, we do not force companies to consult in this way if they decide to take on people as workers or as employees. I suggest to the hon. Gentleman that the new status should be no different. The decision on how to structure a work force is for companies to make. They are the ones best placed to determine how they go about employing staff, and the responsibility for deciding which employment status to offer should rest with them. Nor would the amendment be fair to employees in the work force who may wish to take up the option.
John McDonnell
I tabled a further amendment, amendment 39, on the breaking of the link between employee share ownership and the exchange of employment rights. Is the Minister going to deal with it?
Michael Fallon
The hon. Gentleman is right to chide me, because I have missed out that amendment. If I discover it in time, I will try to return to it.
The Government amendments form a package of comprehensive measures that will strengthen the Bill’s provisions for companies and people. They respond to important points raised during the consultation, on Second Reading and in Committee. I hope that they fulfil the undertaking I gave the shadow Secretary of State to ensure that amendments, whether or not he agrees with them, were at least produced before the Bill leaves the House.
First, amendments 22 to 28 would amend the Bill to change the name of the new status to “employee shareholder.”—[Interruption.] Hon. Members cannot have it both ways; they cannot criticise the consultation and say that we did not listen to it when we did. When organisations asked us to change the name, we did exactly that. During the consultation we received comments on the name “employee owner”. I recognise that “employee owner” might be seen as confusing in relation to the wider employee ownership agenda. It is important that we do not confuse people. The name “employee shareholder” is far better at describing the new status, as it links the concept of employment and shareholding.
Secondly, amendment 29 ensures that employee shareholders who are parents can request flexible working once they return from parental leave. The parental leave directive requires that parents should be able to request flexible working after their return from a period of parental leave. The amendment ensures that the UK will be compliant with the directive. We have decided that employee shareholders should have to make a request for flexible working within two weeks of their return. The time limit gives companies employing employee shareholders certainty about the working patterns of their work force.
Let me turn to the issue of shares and what happens to them at the end of the employment relationship, on which we sought views during our consultation. We believe that employers and employee shareholders are likely to agree sensible terms for the disposal and buy-back of shares in order to ensure that the shares have the necessary value to meet the conditions for employee-shareholder status. The Bill is drafted on that basis.
It is not the Government’s intention that employee shareholders should be left with shares that they can sell back to the company only at prices that are unfair or where the buy-back arrangements would leave the employee at a financial disadvantage if there is no other way of disposing of the shares for value. We therefore believe that it is prudent to seek a power in the Bill to allow the Government to set a minimum value for the buy-back of shares if the company and employee shareholder enter into a buy-back agreement. Amendment 30 creates that power. Let me be clear for the House that the power will be used only if it is needed to safeguard employee shareholders in the unlikely event that employers behave unscrupulously.
Bob Stewart
I have a simple question. If an employee shareholder wants to keep his or her shares, am I right in assuming that he or she can do so and sell them on the open market later?
Michael Fallon
That will depend on the particular arrangement that the company has.
Amendment 31 will provide clarity and certainty to employers and individuals who are considering accepting a position as an employee shareholder, as it spells out how shares will be valued. It aids employers who want to be certain that the contract will not be void because too few shares in value have been given. It will therefore reassure individuals that they are getting at least £2,000-worth of shares in consideration for becoming an employee shareholder.
Mr Ronnie Campbell (Blyth Valley) (Lab)
Can the Minister tell me what happens to a worker’s £2,000-worth of shares if the company goes bankrupt?
Michael Fallon
If the company goes bankrupt, the shares will clearly not have their original value.
I must respond to the hon. Member for Hayes and Harlington on amendment 39—I apologise for not doing so earlier. The amendment would remove the distinguishing feature of the new employment status and deprive companies of the flexible way of taking people on, because it would link directly back to employment rights.
I will now turn to the serious points raised by my right hon. Friend the Member for Hazel Grove (Andrew Stunell) and my hon. Friend the Member for Burnley, first in relation to amendment 41. The amendment seeks to ensure that individuals in receipt of benefits should not be disadvantaged if they turn down an employee-shareholder contract. I would like to reassure the House about what the Government have done to ensure that employee-shareholder status does not lead to jobseekers being deprived of benefits if they decide not to take a job they have been offered on the basis of the new status.
My right hon. Friend the Member for Hazel Grove proposed in Committee that the Government should issue guidance to ensure that an individual’s refusal to enter the status voluntarily is not used as grounds for withdrawing or reducing state benefit. He suggested that that should be made explicit in the Bill. The Government recognise that the status should not be regarded as suitable for all businesses or individuals and should therefore be entered into voluntarily and with a clear understanding of what it will mean for them. Although I made it clear in Committee that his proposed amendment would not work, I accepted that it is a serious matter and undertook to consider it carefully. I think that the matter was also raised on Second Reading by the shadow Secretary of State.
The Government have therefore considered what safeguards would be needed to ensure that the individuals receiving benefits are not deprived of them if they reject a job offer as an employee shareholder. I can confirm that the Employment Minister, my hon. Friend the Member for Fareham (Mr Hoban), has also looked at that carefully. The Government believe that jobseeker’s allowance claimants must actively seek and be available for work. That must include consideration of all suitable vacancies, and it is right that employee-shareholder jobs should be as much a part of that consideration as any other. If a claimant applies for an employee-shareholder job and is offered a position, they should normally accept the offer. If they do not, their benefit payments might be sanctioned if they do not have good reason for refusing the offer. Exactly the same rule applies now.
However, in considering whether the claimant does or does not have good reason, the decision maker will take into account the claimant’s individual circumstances and the specific terms and conditions on offer under the company’s employee-shareholder scheme. It is certainly possible to envisage situations where a job that is appropriate for one person may not be for another. For example, the right to request flexible working could well be crucial for a parent with young children and that may therefore be good reason for that parent to turn the job down if they cannot negotiate flexibility.
So that advisers are able to help claimants to make the right decision about employee-shareholder positions, we will provide guidance and information to them on what the status means and the factors that a claimant will need to take into account before making the decision. We will want to ensure that claimants make the right decision, which might be that they decide voluntarily to accept a job on employee-shareholder status. I confirm to my right hon. Friend the Member for Hazel Grove and to the House that we will provide guidance for decision makers to help them to reach consistent decisions in this area, and we will now seek views from key stakeholders to make sure that that guidance is fit for purpose.
The current guidance for decision makers, “Decision Makers’ Guide”, is on the Department for Work and Pensions website. We propose to amend chapter 34 of that guidance to ensure that it is available to decision makers in jobcentres. That safeguard can be put in place without the need for legislation, and the necessary changes will be made when employee-shareholder status is legally implemented.
Andrew Stunell
My right hon. Friend is being very helpful. I think I heard him say that there was to be a process of consultation with stakeholders. Will he say a little more about that? I am sure that Members around the House would want to convey to the Department for Work and Pensions that there is sometimes a gap between the intentions of Ministers and the advice that they give, and the actual practice at individual offices. I would like to hear a little more from the Minister about that link between good intentions and good outcomes.
Michael Fallon
I certainly accept that point. What comes between the intentions and the outcome is the guidance. There is currently guidance to all staff in jobcentres, and I have already undertaken for my right hon. Friend that we will amend it. However, we will not simply amend it to put my words of tonight into it; we will consult all the various stakeholders involved on how we can make sure that it properly reflects what both he and I want to do.
Mr Umunna
I am not very comforted by the Minister’s comments, because he seems to be suggesting that there would be circumstances in which it would be unreasonable for a prospective employee to turn down a job offer if it were conditional on employee-owner status. Will he, for the benefit of Jobcentre Plus employees, make it clear that if they have a jobseeker’s allowance claimant who refuses to take a job offer because they do not wish to have employee-owner status and lose their rights, no sanctions should be levied on that prospective employee in terms of the deduction of any benefit or any other adverse consequence? Will he make that clear for the record?
Michael Fallon
I am happy to make it as clear as I can. By the way, I think that it is somewhat unlikely that the jobcentre applicant in this case will be offered a significant number of shares and then still find himself unable to take up the position. Let us be clear about how the jobcentre system works: these decisions about sanctions are taken on an individual, case-by-case basis. What I am announcing tonight is that the guidance will make it very clear as to the reasons that the employee had to have before having his benefit sanctioned.
Let me turn to the second point raised by my right hon. Friend the Member for Hazel Grove, which is the only really serious issue about this new employment status. As he and my hon. Friend the Member for Burnley have said, it is a voluntary status. No one on the Government Benches wants employees to be pressurised, harassed or bullied into accepting it. We therefore want to ensure that no individual can be coerced into accepting an employee-shareholder contract. Throughout all the discussions since the policy was announced, there have been concerns that existing employees—not new employees, but existing employees—might be coerced into accepting these contracts. I have been very clear that the new status is entirely voluntary, but I wholly accept that it needs to be seen as such.
Amendment 40, tabled by my right hon. Friend the Member for Hazel Grove, seeks to ensure that existing employees are not coerced into the new employment status. The principle behind the amendment is right and the Government support that principle. Indeed, we think there is a stronger way of ensuring that no detriment will arise in the Bill than by relying on secondary regulation, and that is why we have tabled amendments 64 and 65.
Government amendment 64 creates a new right not to suffer detriment if an employee refuses to sign an employee-shareholder contract. This means that if an employee has been overlooked for promotion or has been disadvantaged in any other way because of that refusal, he may then be able to present a claim to an employment tribunal.
Government amendment 65 creates a new unfair dismissal right. This means that if an employee is sacked because he has refused to accept an employee-shareholder contract, this will be regarded as automatically unfair. Importantly, both these rights will apply from day one of an employee’s contract. That means that employees are protected from the first day of their service. I want to place that beyond doubt. Employees cannot be taken on and then, on day two, be forced to become employee shareholders.
Michael Fallon
I will not, because of the time.
Finally, let me turn to amendment 59, tabled by Opposition Front Benchers, and deal with their opposition to the clause. I have already outlined how the creation of the new employment status adds to the existing statuses of worker and employee. The new status gives companies a new way of taking on individuals, giving both companies and individuals greater choice and flexibility. Removing the clause in its entirety would remove the opportunity for new flexibility and choice for companies. Using the new employment status, just like using the existing status of worker and employee, is a choice for both companies and individuals. By increasing the range of employment statuses, companies limited by shares will have a greater choice about how to grow and adapt their work force. It will also create opportunities for an individual to take up an employment status that may allow them to share in the rewards of a company.
It is for the company to decide what type of contract will be most suitable for it to offer, depending on its requirements and circumstances. The clause does not prevent employers from offering more rights to their staff, such as a contractual right to request flexible work or contractual redundancy pay, just as they can now do with all other existing employment contracts.
This is not about taking away employment rights; it is about creating a new employment status with a different set of rights, just as there are different rights associated with being an employee or a worker. This Government want companies and people to share in the risks and rewards that share-ownership offers, and this is a new way to do so. The clause should remain part of the Bill, to give people and companies a new way of working together, and I urge the House to reject Opposition amendment 59.
Ian Murray
The Minister said that he was not Ebenezer Scrooge, but Fezziwig. Wikipedia explains that Fezziwig is
“a happy, foppish man with a large Welsh wig.”
Let us see whether that description fits the right hon. Gentleman.
The employee-shareholder schemes will not be voluntary and will have absolutely no value. How can the Minister tell the House that he knows better than the 204 respondents to the consultation who said that this policy was, as Dizzee Rascal would say, to give a more contemporary reference, “Bonkers”?
I finish by echoing the Business Secretary, who said that this provision would not be compensated no-fault dismissal by the back door. I could not agree with him more: this proposal is no-fault dismissal without any compensation. Anybody who cares about business and employees in this country will join us in the Lobby.
Question put, That the amendment be made.
Roberta Blackman-Woods
I beg to move amendment 50, page 45, in schedule 4, leave out lines 21 to 27.
Mr Deputy Speaker (Mr Lindsay Hoyle)
With this it will be convenient to discuss the following:
Amendment 51, page 45, leave out lines 38 to 47.
Amendment 52, page 46, leave out lines 27 to 34.
Roberta Blackman-Woods
In Committee, we discussed at length the process of registering town and village greens, and the value of such spaces. My hon. Friend the Member for Rochdale (Simon Danczuk) reminded the Minister of the speech by a previous Conservative Prime Minister, who spoke about warm beer, swallows overhead and cricket on the village green. We were led to think how odd it was, and how much coalition must have changed the Conservative party, that Opposition Members were having to protect precious town and village greens. Clearly, hon. Members on both sides have open spaces in their constituencies that they and their communities want to preserve. Unfortunately, it was made clear to the Committee that there are instances of vexatious applications for town and village green registration that are intended to stymie development, rather than to protect open space. Although such instances are relatively few in the grand scheme of things, they do delay much-needed development. That is why the Local Government Association and other organisations that, like us, want to encourage sustainable development are in favour of placing some limits on the registration of town and village greens, but we think that schedule 4, in particular, goes much too far along that road.
The Open Spaces Society has helpfully provided us with a long list of cherished greens that would not have been registered had the Bill been in place. I urge Members to think about land that might be lost if the schedule is passed unamended, before they vote in support of it. Some of the triggers in schedule 4 are reasonable. For instance, trigger 6 states that, if a neighbourhood development plan identifies a piece of land for development, it cannot be registered. If a neighbourhood plan is in place, it will have been drawn up by residents, published, consulted on and agreed by local people, and land that they have democratically identified for development should be kept as such, but some of the triggers go too far, and it is these that the amendments would delete to ensure that local people can still protect land that is important to them.
John Howell (Henley) (Con)
The hon. Lady talked about warm beer, village greens and all that, but the sort of land we are talking about would not be wide enough even for a bowler to stand at one end.
Roberta Blackman-Woods
In the spirit of localism, I think it is up to local communities to decide what piece of land, no matter its size, is important to local people and not to take the hon. Gentleman’s word for it.
Martin Horwood (Cheltenham) (LD)
If the hon. Lady believes in localism, would she not encourage local communities to use the new local green space designation introduced in the national planning policy framework, which can be made use of at the time of plan-making and so is a more reliable route to protecting local valued green spaces than the village green process, which is a bit haphazard at the best of times?
Roberta Blackman-Woods
The hon. Gentleman makes an interesting point that was also made by the right hon. Member for Hazel Grove (Andrew Stunell) in Committee, but he ignores the fact that a number of communities have not yet been able to draw up a neighbourhood plan. We are terribly concerned—this is the reason for the amendments—to ensure that simply publishing a draft neighbourhood plan does not mean that a village green cannot be registered. That is really important. We asked the Minister to think about delaying the operation of the triggers to enable all communities to develop neighbourhood plans, but sadly I was disappointed once again by his response.
Andrew Stunell
I thank the hon. Lady for giving way—I know that time is short—but I draw her attention to section 87 of the Localism Act 2011, which deals with lists of assets of community value and under which any village green candidate could be listed. That has nothing to do with neighbourhood plans. I also draw her attention to sections 76 to 79 of the national planning policy framework. I think she is going for overkill on this one.
Roberta Blackman-Woods
I am afraid that the Open Spaces Society simply does not agree with the right hon. Gentleman. It made it clear in its briefing to Members on Report:
“The government claims that people would know of the threats through the neighbourhood planning process, but this process is in its infancy and is not widespread. Those who use and enjoy their local open spaces are usually doing just that and are not necessarily clued up about, or involved in, the planning process, and they cannot be expected to know or realise that there is a potential threat to their rights. Moreover those who may be aware of the neighbourhood planning process may not be the same people enjoying the use of a particular piece of land and thus would not be in a position to know that such land is being used as of right.”
It seems odd to give communities the right to register village greens under the Localism Act and the neighbourhood planning process—rights that have not yet been firmly embedded in all communities—while in the Bill taking away rights to register village greens. We ask the Minister to think again.
Michael Fallon
The amendments are identical to those that were moved in Committee, and I explained then that they would weaken the Bill by bringing in trigger points far later in the planning process. The Government do not understand why that is needed and we think it undermines the ability of local authorities and neighbourhoods to contribute to their own plans. The amendments were misguided when they were moved in Committee and they are equally misguided this evening. If the hon. Member for City of Durham (Roberta Blackman-Woods) suggests pushing the amendment to a vote, I urge my hon. Friends to reject it—
Michael Fallon
I beg to move, That the Bill be now read the Third time.
The Bill is about the coalition’s priority: promoting economic growth. It contains a range of practical measures to boost infrastructure, increase housing supply and simplify planning rules, and all those things will make a difference now. I am grateful to the House for acting so swiftly in considering the Bill and I thank all colleagues who have contributed today, in Committee and on Second Reading. I particularly wish to thank the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Grantham and Stamford (Nick Boles), who shouldered most of the burden, and the Opposition for ensuring that, although we did not come to agreement on all the main issues, they were at least properly ventilated and discussed.
As amended, the Bill will provide for commencement on Royal Assent for clauses that support stalled sites being unblocked, broadband being rolled out, the removal of legislative blocks on the gas innovation network competition, and broadening the major infrastructure regime—key reforms to promote growth, on which the Government are acting decisively. It is regrettable that the Labour party stands alone in failing to appreciate the urgency of the Bill and in continuing to oppose it.
Sir Bob Russell (Colchester) (LD)
Does the Minister agree that where the landowner blocking a development happens to be a Government Department—that is the case with the national health service and the missing link of road infrastructure in north Colchester—other Departments must bring pressure to bear and have joined-up governance so that the land can be released, rather than other less-desirable land going instead?
Michael Fallon
I understand that and it is such a skilful piece of constituency pleading that I fear I may have to address it in greater detail in writing. I will do that in the next few days if the hon. Gentleman will allow me.
Local councils and communities are at the heart of the planning process and we have no intention of changing that. We reject the flawed approach of top-down Whitehall housing targets and it is for local councils to determine where development should go and how best to meet housing need. That is why our policy is to revoke Labour’s regional strategies as soon as possible. Indeed, we have laid an order in Parliament to revoke the east of England regional strategy, which will come into force on 3 January.
Our reforms have given significant additional power to councils and communities but with that comes the responsibility to exercise planning functions properly. The measures in the Bill for tackling poor performance are aimed squarely at councils that are failing to deliver an effective service. Applicants can reasonably expect timely and good quality decisions—justice delayed is justice denied. Most councils deal with planning applications efficiently, but a small minority need to raise their game if we are to ensure that their local areas do not lose out in the recovery that is now under way. The Bill is therefore not about removing local people’s involvement in planning decisions. Where a decision is made by the Planning Inspectorate, local people will still have their say in the same way as they would if the decision were made by their local planning authority, but slow decisions are bad for local communities as well as for the wider economy.
The Bill also seeks to broaden the scope of the nationally significant infrastructure planning regime to promote investment, so that developers of large-scale business and commercial schemes will have the option to request to use the infrastructure regime. Given that the speed with which large-scale major applications are determined is falling, it is right to offer developers an alternative.
The need for affordable housing remains high, and the coalition is committed to unlocking stalled sites where affordable housing obligations make them unviable because they are economically unrealistic or were negotiated during Labour’s housing bubble. Let me repeat: affordable housing that is stalled is not affordable housing; it is non-existent housing. The Bill will enable developers to challenge the affordable housing elements if they make the site unviable.
As well as making those reforms to the planning system, the Bill will facilitate infrastructure investment, which is crucial for jobs and growth. Our ambition is for the UK to have the best superfast broadband of any major European country by 2015. It is vital that the deployment of broadband is fast-tracked to support the UK’s long-term economic future, but roll-out is being delayed or blocked because of planning requirements. As a result of this Bill alone, we estimate that 4.4 million more people will have access to superfast broadband. Without that measure, many hard-to-reach areas would be left unserved.
The Bill also amends the Electricity Act 1989 so that developers of power generating stations that want to apply to change their projects will in most cases need to undertake only a three-month consultation, rather than going through the whole process of applying for consent again. That could unlock investment decisions across a range of technologies, bringing thousands of new jobs and millions of pounds of investment to the UK economy.
As well as making the reforms I have mentioned, the Bill cuts red tape to speed up processes. In particular, it carries forward recommendations from the Penfold review of non-planning consents, most significantly the reforms to the town and village green registration system, which we discussed albeit briefly just before Third Reading.
As well as making the reforms to the planning system and unlocking infrastructure investment, the Bill contains two important economic measures. First, it postpones revaluation 2015 in England to avoid local firms and shops facing unexpected hikes in their business rate bills over the next five years. As business rates are linked to inflation, there will be no real-terms increase in rates over the period. That reform will provide certainty for business to plan and invest, supporting local growth. Secondly, as we have discussed at some length, the Bill creates a new employee-shareholder status to increase the range of employment contracts that businesses and employees can use. The measure is about increasing choice and flexibility in the employment relationship. The Bill makes it absolutely clear that it will be for the employer to choose to offer the new status, and for an individual to choose whether to accept it.
In conclusion, the House this evening has the chance to vote for practical measures to boost growth. The Bill will unblock delays in the planning system, encourage faster roll-out of superfast broadband, bring forward investment in energy projects, and give employers and employees more choice and flexibility. The Opposition repeatedly attack the Government for failing to do enough on growth, as if some magic wand could repair at a single stroke the terrible damage they inflicted on our economy. In the Leader of the Opposition’s speech to the CBI last month, he said:
“Enterprise and job creation are fundamental to the good economy and good society, and I will lead a party that understands that at its core”,
but businesses that back the Bill will see that, when his party has the chance to live up to those words and support reforms to promote growth, it votes against them. Government Members instinctively understand enterprise and will back the risk-takers and those willing to invest in creating jobs and growth. We want to help to modernise our economy, our infrastructure and our planning system. Only one part of this country resists modernisation—the Labour party. Better planning, more affordable housing, faster broadband, bigger investment in infrastructure and a boost for share ownership are the core of the Bill, and I commend it to the House.
Roberta Blackman-Woods
I, too, want to begin by thanking all Members who have contributed to the debate and by acknowledging all the hard work undertaken in Committee. In particular, I thank my fellow shadow Minister, my hon. Friend the Member for Edinburgh South (Ian Murray), for his highly effective dissection of key clauses. I also want to thank my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) and my hon. Friends the Members for Scunthorpe (Nic Dakin), for Rochdale (Simon Danczuk), for North Tyneside (Mrs Glindon) and for Sheffield Central (Paul Blomfield) for their excellent comments in Committee and today.
The best thing that I can say of the Ministers is that they have been extremely gracious in rejecting all my suggestions for improving the Bill. Let us be clear: the Bill will do little to promote growth or to encourage the delivery of infrastructure. As the shadow Secretary of State, my right hon. Friend the Member for Leeds Central (Hilary Benn), said in Committee, it is a “rag-bag of measures” put out in haste in September as one of a number of panic measures to suggest that the Government were doing something to address the flatlining economy. There are so many things wrong with the Bill that I simply do not know where to start, but I shall highlight some of the worst offenders.
As I have said, it has not proved possible to improve the Bill in Committee or on Report today, and that is a matter of regret. The centralising, anti-localist processes that underpin clause 1 are still there. Let us be clear: this will lead to local communities losing their ability to influence planning decisions that relate to their areas. The Conservative-controlled Local Government Association has stated that clause 1 could be “counter-productive”, as the proposed criteria for measuring performance—the time taken to make a decision on major applications and the proportion of major decisions overturned on appeal—will result in a focus on blunt targets, driving unintended consequences and behaviours.
The LGA goes on to say that the Bill goes against the localism agenda by shifting authority and resources away from local planning authorities and over to the Planning Inspectorate. I could not agree more. We said several times in Committee that if the Minister was serious about improving the performance of planning authorities, he should, instead of imposing the measures in clause 1, fund the kind of projects that were clearly outlined in our evidence sessions by the Royal Town Planning Institute, the Town and Country Planning Association and others. Such projects would provide intensive support to local planning authorities, and evidence has clearly shown that they can turn authorities around. The Campaign to Protect Rural England has also said that, although the Government say that they want to improve the performance of local councils on planning, the Bill’s approach will be counter-productive.
We have not yet said anything today about clause 5, or about the changing demands for information from local authorities when determining applications, but we must ensure that those authorities get the information that they need to make good determinations. Speed does not necessarily make for a better decision, and a lack of relevant information will simply hold up the determination process.
As we said earlier, the introduction of clause 6 is simply disgraceful when the country is so short of affordable housing. Figures make clear the desperate need for affordable housing clear. As we noted, there was a 9% increase in statutory homelessness between April and June this year, and a 23% increase in rough sleeping over the last year. It is simply outrageous that the Government should be bringing forward measures that seek to reduce the supply of affordable housing in this country. Any measure that would reduce the level of affordable housing, other than through sensible renegotiations being undertaken by local authorities, should be rejected by this House.
I hope that Members in the other place manage to persuade the Government of the error of their ways, as we have not managed to do so here. In particular, the Minister should give serious consideration to keeping land for affordable housing in place and using money allocated by the Government for affordable housing to enable schemes deemed unviable to go ahead. The Minister has refused to look at this today, but I hope he will look at it again. The failure to accept any of today’s amendments leads me to question the motive behind clause 6. It looks more and more like a device to let unscrupulous developers renege on their section 106 obligations.
The Bill also risks huge damage to our environment by giving inadequate protection to areas of outstanding natural beauty, national parks, conservation areas and so on. It is not acceptable to reduce the current protection by allowing economic criteria to be part of the determination. This could reduce the ability of local authorities to ask for sensitively sited cabinets, no overhead cables and the like.
Chris Ruane (Vale of Clwyd) (Lab)
I represent the Vale of Clwyd, which has an area of outstanding natural beauty. One of the chief people in charge of it, Howard Sutcliffe, asked me to relay to Parliament his concerns about this issue. We have a beautiful area in the Vale of Clwyd, and the laws proposed by the Tories will diminish it.
Roberta Blackman-Woods
My hon. Friend makes the point well. The Government have given absolutely no evidence in support of this case. We noted in Committee that BT had said a number of cabinets had been delayed, but what had led to that delay was not made clear. No evidence has been provided to show that it was because local authorities were not considering economic criteria; it was simply that they did not wish their areas to be ruined by the unsightly and inappropriate siting of broadband cabinets and overhead cables.
We need to limit clause 8 so that it covers broadband only. As I said earlier, we support broadband roll-out and did much in government to facilitate it, but this Bill does not have the balance right. It is playing fast and loose with our areas of outstanding natural beauty and our national parks, and it is putting at risk the development of tourism in some of those areas. As such, this could be a profoundly anti-growth measure when it comes to developing the tourist economy in a number of areas.
A range of organisations have made a number of points to the Government, so I hope they will take this issue away and look at it again. We need to take great care with our areas of outstanding natural beauty and national parks. I am sure Government Members do not wish to have these areas cluttered up with mobile masts, overhead cables and unsightly cabinets; I am sure they would want to think again in the interest of protecting our wonderful natural environment and developing tourism sensitively in those areas.
The balance is also not right with regard to the registration of village greens. Communities need time—we accept that the period could be short so that development is not held up—to register a green once it appears in a draft plan. We want to limit the trigger-happy tendencies of the Secretary of State, so clause 15 needs to be looked at again.
If the Government are serious about using major infrastructure projects to promote growth, they must do better than the measures in the Bill. Simply allowing developers to bypass local communities in decision making will not necessarily lead to new development. We need to establish that the Planning Inspectorate system will be quicker, that there will be criteria enabling it to speed up work, and that it can be applied consistently across the country.
Business needs access to finance and markets need to grow, but strangely there is no mention of that in the Bill. Tinkering around with planning is not the solution to the need for more infrastructure or economic growth. The Town and Country Planning Association has said that the Bill
“has the potential to undermining public legitimacy without dealing with core barriers to growth which are primarily the availability of credit (both development finance and mortgage availability) and the capacity and skills of the planning service.”
That is an excellent point, but the Government have not raised such issues in the Bill or in the discussions that have accompanied it.
The Government have also given no reason for the delay in business rate revaluation. They must provide evidence of winners and losers, because otherwise it will be suspected that the Bill was designed simply to help businesses in more prosperous areas.
Asking workers to give up substantial employment rights won over many decades in return for a few shares is simply deplorable. Despite the amendments that we have discussed today, the Bill could lead to pressure on employees to sign up. In Committee and again today, the Minister has shown no real understanding of the lengths to which people will go to save or retain their jobs, or to apply for jobs. He needs to take that on board.
During our debate on clause 25, a number of Members on both sides of the House gave examples—real examples from their constituencies—illustrating our concern about the clause. We fear that, rather than being voluntary, the arrangement that it proposes will cause many people to be persuaded to take up this new employment status—perhaps against their short-term or long-term interests—and to give away rights which, as I said earlier, have been fought for over generations, in return for a few shares. Incidentally, the shares will not necessarily have been valued. The Minister has still not made clear what will happen to them, or, indeed, to the employment rights of the people who have bought them, should the company go into liquidation.
I listened carefully to what the Minister said about amendment 59, but I heard nothing that allayed my concerns. Indeed, I heard quite the opposite. The Minister was asked to give a categorical assurance that people seeking employment through a jobcentre who refused to attend an interview because the job would require them to take up employee shares would be entitled to refuse to attend without a sanction being applied to their benefits. The Minister told us this would be assessed on a case-by-case basis. That means there must be a set of circumstances in which an individual who refuses to attend an interview for a position that will lead to their being an employee share owner will have their benefit removed.
Chris Ruane
The Minister did, indeed, say it would be judged on a case-by-case basis. He also said there would be guidelines. Does my hon. Friend know whether they have been published, and whether we can have a look at them?
Roberta Blackman-Woods
My hon. Friend makes an interesting point that I will address later. At the last count, the number of consultations underpinning this Bill had risen to four—or perhaps five—and we have had at least six sets of guidance. As far as I am aware, however, the final guidance has not yet been produced. We will wait to hear what the Minister has to say on that.
Michael Fallon
I have said that we will provide fresh guidance to decision makers to help them make consistent decisions. The current guidance is referred to as the decision makers guide. We will consult all the key stakeholders involved to make sure the new guidance properly reflects the position I have outlined and the reassurances I have given.
Roberta Blackman-Woods
I heard what the Minister said about the guidance, but Opposition Members are looking for a categorical assurance that people who refuse to attend an interview for a job that will lead to their having to give up all their employment rights will not have their benefits stopped as a consequence. That requires a yes or no answer. If the Minister wants to make it clear that the answer is no, I will happily take an intervention from him now. As he does not rise, I think we can assume that no such assurance can be given. That shows why have so many grave concerns about clause 25.
We will certainly be voting against the Third Reading of this horrible, nasty little Bill that does little to promote growth, but risks employees’ rights and the protection of our environment, while also reducing the amount of affordable housing. The Wildlife Trusts’ comments are pertinent:
“Our primary concern is that the Bill perpetuates the myth that planning is responsible for holding back growth rather than focusing on the significant issues of financial restraint and borrowing difficulties. We believe that this approach to growth, risks putting our natural capital at risk and undermining future prosperity.”
I hope the Minister listens to the Wildlife Trusts, even if he will not listen to us. This Bill changes the basis on which planning applications are determined by breaking the trust with local communities, and thus we must vote against it.
Sir Bob Russell
As the Bill’s title suggests, it is about growth and infrastructure, but, as I pointed out earlier, problems arise when we have growth without infrastructure. The rhetoric on the national stage is one thing, but the reality in individual constituencies is quite another when the Government own the land where infrastructure development is being stopped.
Let me explain the situation in respect of the northern approach road from junction 28 of the A12 to Colchester mainline station. Sections one and three have been constructed, but section two, which goes through NHS land, has not, because the NHS trust has so far failed to take it forward. I urge the Under-Secretary of State for Communities and Local Government, the hon. Member for Grantham and Stamford (Nick Boles), to visit my constituency, following on from the excellent work of the hon. Member for Bromley and Chislehurst (Robert Neill), who met members of the Myland community council to see what can be done there.
The population of the borough of Colchester has increased by 17,278 in the decade between the 2001 and 2011 censuses. That is an increase of 11%, almost double the Essex increase, and as the Minister of State suggested, the east of England is the fastest growing region in the country. To put it simply, we need infrastructure so that land elsewhere in the town is not used when that would be undesirable. By that, I mean the fields of west Mile End, which the Secretary of State has personally viewed.
In summary, observers are warning that the town’s expansion is happening too fast for its facilities and infrastructure to cope. I therefore urge Ministers to consider local examples, such as the ones I have given, to ensure that infrastructure goes in where people want it and to avoid the alternative, which is the largest housing estate in the country, with 1,600 houses, served by a cul-de-sac more than 1 mile long.
Mr Raynsford
Let me start by agreeing with the Minister of State’s opening remarks. He said that the Bill is about the Government’s priorities and I agree with him: it is about obfuscation, smoke and mirrors, waffle and self-delusion. It seeks to give the impression of activity when the Government are doing next to nothing to stimulate growth in the economy and to ensure that there is the infrastructure investment we need. It might be entitled the Growth and Infrastructure Bill, but I would be astonished if five years down the line anyone could identify a significant economic consequence for either growth or infrastructure investment.
The Bill essentially reflects Government prejudice rather than evidence. That is the biggest single charge against the Government: rather than evidence-based policy making, we have been fed a diet of prejudices about the supposed failure of the planning system, the discredited Beecroft agenda, how regulation and workers rights are somehow impeding growth and the fear of revaluation—I shall come back to that, because it is a curious question that reflects something in the Government’s psyche that they would do well to begin to think about.
Let us turn to planning first. Everyone who gave evidence to the Public Bill Committee said quite clearly—Ministers know this—that we are not getting development, housing and economic growth not because of the planning system but because of the lack of confidence and lack of lending, as well as because of the fact that people are very nervous about investing because they are uncertain about the future of the economy. That is the fundamental problem and the Government ignore it at their peril.
As everyone has heard, planning is a useful whipping boy blamed by the Government for any problems. As we listened to Ministers, we heard them changing their tune as the debate went on. They started by saying that all the planning problems were holding back growth, but by the end they were saying that only a small number of councils were not acting as well as they should. They said that the intention was to incentivise those councils and that it would not impact heavily on or affect many of them, as not many were failing. The fascinating thing about that is that when they were challenged they could not name a single such authority. The Secretary of State, who sadly is no longer in the Chamber, had a go on Second Reading, but got it spectacularly wrong, naming an authority that was not in any way failing. That is the measure of the Government; they really do not know what they are talking about. It is prejudice rather than evidence.
When we come to Beecroft, the situation is exactly the same. I have to say this to the Liberal Democrats: what a disgrace that they have gone along with the Beecroft prejudice about employee rights when their Business Secretary said that he had stopped the implementation of the Beecroft agenda. Would that he had, but he has not, and the rephrased employee ownership option—changed to shareholder ownership because the Government realised that calling it employee ownership would probably contravene the Trade Descriptions Acts—is universally condemned by people who really care about employee ownership. All the organisations who gave evidence to us—the people who have worked for years to build up employee ownership—said, “Don’t do this.” They told us that it would discredit the whole process of getting employees more involved in the running of their businesses and the measure was a fraudulent product that would do harm, not good.
That was the second prejudice. I have already referred to the third one—the extraordinary postponement of the business rate revaluation. Why is there somewhere in the psyche of the Conservative party a fear of revaluation? The Conservatives think it is somehow going to cause them harm. I suppose it is because the revaluation is due to take effect in 2015, and they probably think it might be bad news and that if they can halt it they might be able to turn it around. Once again, they have acted on the basis of bogus figures that no one believes. When the rating experts gave evidence—Gerald Eve, the British Property Federation and the British Council of Shopping Centres—they all said that they did not believe the figures from the Valuation Office Agency. Ministers have trotted the figures out again today—800,000 potential gainers, compared to 300,000 losers. No one believes it. When we proposed the simple amendment that the Government should publish serious estimates and consult the interested parties before taking a decision, they would not accept it. They wanted to proceed on the basis of their prejudice rather than on evidence.
In between the bookends of prejudice that characterise the Bill, there are one or two worthwhile and sensible provisions, and I welcome them. The Penfold agenda for the rationalisation of conflicting planning and consent regimes is a sensible move forward, and there are some good things in that area, but it is hard to find them with those awful, unjustified, un-evidence-based prejudices on either side of them.
It is to the Government’s credit—this is a seasonal comment as we approach Christmas—that Ministers have realised that there are some turkeys in the Bill that had to be changed. I thank the planning Minister, the Under-Secretary of State for Communities and Local Government, the hon. Member for Grantham and Stamford (Nick Boles), for agreeing to reconsider the rural exceptions policy; the Government were going to make a serious mistake, but they have backed away and I am grateful to them for that. But those are small mercies in a Bill that is fundamentally flawed and will do nothing about the two subjects that it is supposed to stimulate—growth and infrastructure—and will actually perpetuate a series of myths that do nothing for good government or development in this country.
John Howell
It is a great pleasure to follow the right hon. Member for Greenwich and Woolwich (Mr Raynsford), but it will come as no surprise to the House that I do not agree one jot with what he said.
I spoke on Second Reading, I participated in the Committee and it is a pleasure to speak on Third Reading. Before that, I was intimately involved in the production of the Localism Act 2011 and the national planning policy framework, so I can assure the right hon. Gentleman that planning was no whipping boy. In “Open Source Planning” I set out a vision of how the planning system should operate and the Government have more or less faithfully fulfilled it in their reforms. Planning was not a whipping boy; it was given proper status, as it was in my Second Reading speech when I pointed to surveys showing the overwhelming impression among business that planning was the great preventer of development.
Both the Opposition and the LGA entirely missed the point about localism. Localism was always a double devolution. The first devolution was down to local councils, whether they were district or borough councils. The second devolution, which was just as important, was down to local people, principally through their parish and town councils, but generally to the people at large to deal with.
It is not surprising that the LGA is interested only in the first of these. It is not interested in devolving power from itself down to community groups. It is interested in retaining that power. The purpose of the Bill is to deal with district or borough councils that cannot or will not let go and complete the devolution process. Clause 1 partly deals with that aspect of localism. It is an incentive for those councils to get it right and to get their act together.
I want briefly to discuss a couple of other points. In Committee and in the earlier debates today we heard a great deal about section 106 agreements, but nothing more powerful has been said about the proposal for section 106 than that a share of nothing is still nothing. It is to the credit of my hon. Friend the planning Minister that we have pushed forward the renegotiation of section 106 in order to ensure that a share of something is something.
Similarly, let us not forget that the reason we were discussing the clauses on village greens is that they are a direct result of the Penfold review. It is a treatment of a situation in which a non-planning regime for village greens rubs up against a planning regime in neighbourhood planning and, as the right hon. Member for Hazel Grove (Andrew Stunell) made clear, in assets of community value. It is instructive that the Opposition have tried to confuse the two and not kept them separate. The village greens legislation is separate from the planning legislation. It should not be used to confound planning proposals. It is right that we have split it as we have and that we should be given credit for doing that.
There are many other aspects of the Bill that I could trespass on to, but I will give other Members a chance to speak. The Bill is a perfectly formed example of its type. It could not be more different from the description given by the right hon. Member for Greenwich and Woolwich. It is a perfectly formed Bill that we should vote for with absolute confidence.
Mrs Glindon
Serving on the Bill Committee confirmed to me that all of us in the House are human, to a greater or lesser extent. I genuinely believe that the coalition Government want to see growth, but their approach is wrong.
It has already been said that this is not a Bill for growth. I am sad to hear Members on the Government Benches decry what has been said by the Local Government Association, an association that is trusted by all the councils throughout the land and their representative body. What could be more representative of our local communities and the elected bodies that represent them than that body? The Government would really have shown a commitment to growth if they had listened to the LGA’s suggestions on the Bill. It said that planning is not why no construction work is going on; the reason is that banks are not lending and people are not buying. That is what is stalling and stopping development. Until the Government listen, no progress can be made.
Drawing on my past as a member of a local authority planning committee—having been a councillor for 15 years, I sometimes find it hard to leave things behind—I know how committed councillors are when making planning decisions, how they can listen directly to local people and how local community groups or individuals often make representations about their planning concerns. What could be worse than, as might happen because of clause 1, a council that is deemed to be a failed council, whatever that might mean—we are still unsure about the definition—finding that its planning decisions are being taken away and swept off to either the Secretary of State or the Planning Inspectorate? How will the people who have been voted in to represent local people feel? How will local people feel when they have no right of appeal? It is that stark.
I have a further concern. The Planning Inspectorate makes household decisions within seven weeks and non- household decisions within 17 weeks, but local authorities make household decisions within eight weeks and non-household decisions within 13 weeks, and that is the case for more than 89% of councils. It seems that the majority are being punished for the failings of the few.
In relation to section 106 agreements and affordable housing, I have referred to the fact that in North Tyneside alone around 4,000 people are currently waiting for council housing. That does not include those who are hoping to buy and struggling to raise money to put down a deposit for a mortgage. I have constituents coming to me who simply cannot buy a house and cannot get affordable housing and so are looking to the council. However we define affordable housing, the need is as great, whether it is for someone looking for a house they can afford to buy or to rent. Taking away the housing element and the 106 agreements will leave those people even more desperate.
I spoke before about employee ownership, or share ownership as it is currently called. Many constituents have contacted me about that over the past week because they are so concerned about it, as well as about the rest of the Bill. They see what is wrong with it. They see how it undermines workers’ right and takes away women’s rights and carers’ rights to flexible working. I have stressed the need for training and the fact that it is not right that people will lose their right to training. Training enhances and helps companies grow in professionalism through personal development, and that can really make employers proud of their employees.
I have mentioned those three points. It is rather like someone going to confession to recite their sins for a period of time and saying, “That’s all I can remember, Father.” I am looking back at my time on the Bill Committee and in the House today, but it is not my sins that I am concerned about; it is the Government’s transgressions and what they are doing with the Bill. I hope that we reject it.
Annette Brooke
I thank everybody who has been involved in the scrutiny of this Bill, particularly my right hon. Friend the Member for Hazel Grove (Andrew Stunell) and my hon. Friend the Member for Burnley (Gordon Birtwistle).
I applaud the objectives of the Bill. We inevitably need a multi-pronged approach to achieving growth in the sort of economic climate that we are in at the moment. We have to work with the banking system to make credit available and to help first-time buyers. We need land to be available, although I do like to protect the green belt. We need the public sector land availability that my hon. Friend the Member for Colchester (Sir Bob Russell) mentioned. There is much more scope for that on the way, whether it be for infrastructure or for housing itself. We need investment from the Government, although the £10 billion contribution is most welcome, as is the direct £300 million.
Not so long ago, I was standing here arguing against regional spatial strategies. In a relatively short space of time, we have had the Localism Act 2011 and the national planning policy framework, which are really good steps forward. The Bill has brought about further debate on localism versus centralism, and it is important that we get the right balance. Today we have had some important reassurances, particularly on the designation of planning authorities, to say that there will be early intervention and support. It is very important to work with local authorities and local people, not in conflict with them. I am worried that we have not quite sorted out quantity and quality as regards planning decisions, but there is scope for more debate on that.
On section 106 agreements, we have had some reassurances about the transparency of any renegotiations and a really firm test of viability. I am also reassured by the time-limited aspect. We have all been calling for outstanding planning permissions to be implemented rather than developments going out into our green fields, so this time limit has potential. I am sure that we all care about affordable housing and mixed housing developments. We have to use all the tools at our disposal, not just in this Bill but right across Government.
I am concerned that the measures in the Bill should not be counter-productive. It will be important to have more scrutiny in the other place. It is also important that we all respond robustly and encourage others to take part in the many consultations that the hon. Member for City of Durham (Roberta Blackman-Woods) mentioned. I shall certainly be participating on behalf of the Liberal Democrats, and I hope that the listening process will continue.
Simon Hughes
I thank the Under-Secretary, my hon. Friend the Member for Grantham and Stamford (Nick Boles), for what he said about making sure that we have a much more open system for assessing the viability of applications for developments with affordable housing. We have lived in a world where people in communities such as mine have gone to their local authority and developers and asked why the case has been made for a reduction in the original plan for affordable housing, and they have been told that it is all confidential and nothing can be seen. The good news that comes from today’s debate is that the process will be much more visible and transparent. That was called for by Labour Front Benchers, and it was certainly undertaken by my hon. Friend.
I encourage Ministers to consider the fact that we absolutely need to respond to the demand out there in all our constituencies and to go on looking for new ways of finding more affordable housing. I do not think that there is a single constituency in England where there is not a huge demand for affordable housing, and we have pressures that the Government need to work out ways of resisting. In London, we have lots of purchases from abroad of land to be used primarily for marketing abroad, not for marketing at home. Foreign investors will buy to build and then leave the properties unoccupied. That is unacceptable. It forces up prices, it reduces availability, and it may be new housing but it is not new affordable housing. As my hon. Friend the Member for Colchester (Sir Bob Russell) said, public sector land, not only in Greater London but elsewhere, is not being brought back into use.
I hope that the Department for Communities and Local Government will work with the Department for Business, Innovation and Skills to realise the benefits of house building in terms of growth and jobs. It is one of the most certain ways of getting maximum numbers of jobs and apprenticeships into the economy. I hope that the Department will also work with our colleagues in the Treasury to make sure that we have a tax regime that incentivises people to develop brownfield land, not to sit on it. Too many sites in constituencies such as mine have been sitting idle and not used for anything for too long. People want affordable housing and imagination from the Department for Communities and Local Government, but I hope that this Bill is only the beginning of a development that produces far more affordable housing under this Government than was ever developed during five years of the Labour Government.
I did not come to this place just to be critical of a Labour Government who developed far fewer council properties than any preceding Government; I want to encourage this Government to make sure that they do better than our predecessors and develop homes that meet the aspirations of my constituents, who want housing that they can afford and who do not want the only available offer to be the ridiculous costs of some of the new housing currently being built.
Question put, That the Bill be now read a Third time.
Business without Debate
Small Business Growth (Hazel Grove)
(12 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Andrew Stunell (Hazel Grove) (LD)
I am pleased to have the opportunity to bring this debate to the House. Although it relates specifically to my constituency, I am certain from the remarks I have heard from other Members over the past few months that the problem is universal, and that we could easily have another 649 such debates relating to other constituencies. The problem is that there is a huge gap between what the retail banks tell the Government is going on, what they tell Members of Parliament is going on and what they tell small and medium-sized businesses in my constituency is going on. As soon as it was known that I had secured the debate, a number of organisations got in touch with me to say words to the effect of, “Good on yer, get on with it, and there’s lots more to follow.” The British Chambers of Commerce e-mailed me to say:
“Across Britain, there is strong evidence of a serious market failure around access to finance, especially for fast-growing and newer businesses.”
The e-mail went on:
“The introduction of state-backed support schemes to increase the availability of finance to SMEs has been impeded by a lack of coherence, poor roll-out, poor communication, and over-dependence on existing bank infrastructure.”
By that, the BCC means that the existing banks are being expected to deliver it.
The Federation of Small Businesses got in touch to say that as part of its quarterly economic index it asked members whether they had requested credit, and other related questions. In the third quarter of this year, 21.6% of those questioned had applied for a loan—in other words, more than a fifth of businesses—and of those 42.4% were rejected and 14.8% still await a decision. In addition, 74.7% of firms rated credit availability as quite poor or very poor, with only 6.9% rating it as good. In other words, half of those who applied had their loans rejected, and three quarters of all firms thought that credit availability was poor or very poor.
The FSB went on to tell me that it had also recently carried out a survey of its members in Hazel Grove regarding their main concerns. Approximately one third said that getting bank lending or lending from other sources was their biggest concern—a third of the businesses they polled in my constituency. It provided a quote from one of its members:
“the high street banks are not the vehicle for engaging small business due to their aggressive policies and their inability to discuss/consider risk based lending. What we need is not lots of different schemes that try to get the banks to do their job, but rather one scheme that does not involve the high street banks.”
Not everybody shares the pessimism about retail banks. I was drawn to remarks made in the newspaper City A.M. on 6 December by Anthony Browne, the chief executive of the British Bankers Association. His commentary was:
“It is time politicians wake up to the fact that, when it comes to returning the economy to growth, banks are no longer the problem–but part of the solution.”
That is why it is so important for us to have this debate and to hear the Minister’s response. There is a huge gap between the perception of the banks as they represent themselves to the Government and MPs—we all get monthly or quarterly newsletters from each of the big retail banks in which they point out that everything is as good as it ever possibly could be, they are trying hard and nothing is going wrong—and my constituency inbox, in which every month small and medium-sized enterprises tell me of their problems.
I want to spend a little time on four specific cases. In each case, I have spoken to the companies concerned and they are happy and ready for me to use them as examples in this debate. The first case is Isaac Hirst Fine Furniture, which I think is best described as a micro-business—it is a one-man furniture making proposition. Mr Hirst has been running it since 2011 and banks with Lloyds. At the beginning of the year, he was offered a £10,000 contract from a big company specialising in high-end commercial kitchens. He approached the bank for an overdraft to provide working capital. When he opened his account with Lloyds in 2011, he was told that he would be eligible for consideration of an overdraft after a few months. In fact, his overdraft application triggered a refusal and a robust challenge from the bank over how he got a business account in the first place, and, because of the bank’s response, his company had to turn down the contract.
The same company that had offered my constituent the £10,000 contract then offered him a £2,000 contract. He realised that cash flow could still be a problem, because he was finishing off a piece of furniture for a client in Valencia—export business, you see—so on 2 July this year he approached the bank for a short-term overdraft of £500 to help pay for the materials for the new commission, but the bank refused.
That is when I came into the picture. I took up the case and received a letter from Lloyds TSB dated 11 September that, apart from some explanatory stuff about its decision making, said:
“I’ve also asked Leigh Taylor to contact your office to arrange the meeting which was previously discussed.”
By the end of November, Leigh Taylor had not contacted me, but on the other hand I had got an invite to breakfast from Lloyds TSB and to meet Annette Barnes, whose job title was “ambassador for the north”—a suitably grand title and perhaps worth compromising my ethical position for by accepting a breakfast from her. I thought she might be at least dimly aware of the fact that I had raised a complaint about the bank’s behaviour in relation to Isaac Hirst Fine Furniture, but that turned out not to be the case—she was completely unsighted—although she said she would make some inquiries. She made them and came back saying, “Everything’s okay, I think.” Well, I am still waiting for the call from Leigh Taylor, and it is now 17 December.
I have, however, got endless briefing notes from Lloyds bank. I have a note telling me it employs 9,000 people, has got 350 branches and gives £4.9 million to charity. It sent me a “state of the economy” pack and a constituency factsheet that, among other things, tells me what the average child’s savings are in my constituency, but it has avoided telling me how many SMEs there are in my constituency, how many applications for loans it has received from SMEs in my constituency and how many have succeeded.
I would not want the House to think that I have a particular gripe about Lloyds bank, so it is right to introduce my second example, which relates to an engineering company in my constituency, JD Hughes, Europe’s largest manufacturer of emergency safety showers, eyebaths and decontamination equipment. A lot of its equipment goes into chemical plants and petrochemical plants so that, in the event of spillage or some other problem, workers can get immediate relief. The company’s products are used throughout industry and by civil and military authorities worldwide, including by our own fire and rescue services. They are sold directly to end users and contractors or sometimes through an international network of distributers, and they are sold through specialist safety equipment suppliers.
This case came to my attention when I attended the awarding of the Queen’s award for export given to the company by the lord lieutenant of Greater Manchester in the presence of me, as the constituency MP, and the mayor of Stockport borough. At that point, it became clear that it, too, had a quite a serious problem. Its turnover is £12 million a year, it employs 90 people and 70% of its product is exported. Some 97% of the materials it uses are UK-supplied, and a dozen or more of those companies are based in Stockport. It provides local jobs, and has a local purchasing policy but worldwide trade. However, it cannot get the money and support it needs from the banks.
JD Hughes started with RBS—we can add that to the rogue’s gallery—but it was not much use so the company switched to HSBC. That did not work so it switched to NatWest. In the course of that process it received a mysterious £250,000 cut to its overdraft, a reduction in invoice discount rate, and an offer of factoring for outstanding bills which, given that it was dealing with internationally known major corporations, was inappropriate. That cost the company £50,000 to sort out.
In July this year I am happy to report—I am sure the Minister will be pleased to note this—that the Export Credits Guarantee Department offered the company 50% for its export project. However, that must be matched by the bank, although five months later the bank has not agreed to do that. The money is there but cannot be released. JD Hughes needs an underwriting of its bond facilities but at the moment that is costing it £1 million in money held back by clients because it cannot get the bond in place. The company’s finance director estimates that it is £1 million behind where it could be in terms of turnover—the equivalent of 10 jobs. It has recently been approached by a foreign bank that is offering a better deal than any of the domestic banks. Its plea is for the banks to adopt not a no-risk but a low-risk way of evaluating propositions they receive. On Friday I met Mr Steve Sankson, the regional director at NatWest commercial banking, and to be fair he left the meeting with a clear understanding of my concerns. It remains to be seen whether that will lead to action.
My third example concerns Tribourne Catering Services, and the villain of the piece is HSBC. Tribourne recently secured a 10-year contract to run catering facilities at a newly opened private sports centre in my constituency, Woodley Sports. The company has been banking with HSBC since 1996 but to get the contract under way it is necessary for the successful catering company to equip the kitchen, which requires the purchase of capital materials. Tribourne asked for a loan of £100,000, which was refused. When it approached the bank to say, “Okay, if not £100,000, how much?” the answer was, “None at all.” When I spoke to Brenda Hopkins of Tribourne she said that the response may have something to do with the fact that she is now in contact with her ninth relationship manager in 16 years of banking with HSBC, although she has not heard from most of them in her time with the bank.
What does HSBC have to say about that? A letter on 13 September stated that
“in the North West region we are pleased to report that we have in the first six months of the year: agreed in excess of £657 million gross new lending to over 13,650 small and medium sized businesses—an increase on the same period last year.”
No doubt that is true; I am sure the bank would not deceive MPs in its correspondence, but it certainly missed one company in which it should have invested—another example of things that go wrong.
Fourthly, just to get a full suite of banks, let us look at Barclays. Childcare Products has had a 15-year business relationship with Barclays bank. In January 2012 there was a change of bank manager—or relationship manager as they seem to be called these days—and the boss was called into talk about his overdraft facility and how the bank could make things a bit easier for him. The company has an £18,000 overdraft facility that could be extended to £20,000 via a phone call to the bank manager. The new proposition was to turn that into a loan, with a change in interest from 8% to 14% over five years. When the company refused, nothing very much happened until it discovered that the £18,000 overdraft was reduced to £10,000 without anybody bothering to notify it.
The Federation of Small Businesses was tipped off by Childcare Products and an all-party group has considered the matter, but what did Barclays have to say to me? It wrote on 29 November to say that it is running
“a series of clinics and seminars…to encourage entrepreneurship and help businesses boost skills, overcome challenges and widen their networks.”
It has a strange way of doing that.
I have given an overview from the British Chambers of Commerce, the Federation of Small Businesses and the British Bankers Association and asked the House to judge which has got it more right in the real world. I gave examples of four different companies in my constituency that approached me—I did not seek them out—to say, “Mr Stunell, can you not do something about how the banks are treating small businesses?” All had the option and capacity to create more jobs in Hazel Grove doing productive work, and all have been blocked as a result of decisions taken on their applications.
What do I want to hear from the Minister tonight? I want to hear his assurances on the Government’s good intentions. I share them, and I know he has worked hard. I want to hear the report on progress and to know how soon we will have the business bank. I want to know whether and how soon we can channel more of the Government’s and public taxpayers’ resources through the non-retail banking sector, for which the British Chambers of Commerce has asked.
I want to ask the Minister for just one practical step. I would like him to convene a meeting at which the British Bankers Association and senior representatives of each of the banks I have named in the debate are in the same room with him as the Minister and me as the affected MP. I also want the opportunity to bring one or two of the people to whom I have referred into that room, so that we can short-circuit the gap between what the banks tell the House and the Government and what really happens on the ground. We must get to a point at which we get real action, instead of talking on two different planets about two different situations while jobs go begging. I am looking forward to what I know the Minister will tell me.
The Economic Secretary to the Treasury (Sajid Javid)
I thank my right hon. Friend the Member for Hazel Grove (Andrew Stunell) for securing this debate and for presenting his case so eloquently.
All hon. Members are keen to see successful businesses in our constituencies, whether in Hazel Grove or Bromsgrove. We recognise the importance of businesses. Whether they are small, medium or multinational, they provide jobs for our communities. Indeed, only with the help of successful British businesses will we be able to deal with the economic challenges that our country faces. I am therefore glad to have the opportunity to discuss retail banks and small businesses, and business finance more generally.
My right hon. Friend has shared some interesting case studies of the difficulties that some of his constituency companies have faced. He mentioned four companies, including Isaac Hirst Fine Furniture, JD Hughes and Tribourne Catering. I am sure he understands that it would not be appropriate for me to try to address the company issues he has, but his message comes through clearly from the illustrative examples he has picked.
I would like to start by talking about some of the action that the Government have already taken, and then to answer some of the excellent questions that my right hon. Friend has asked. The Government have taken a number of steps, and the first that they took on coming to power was to set up Project Merlin, which began in 2011. In that year, UK banks lent a total of £214 billion to British businesses. That represented a 20% increase on 2010, exceeding the lending target by £24 billion. On top of that, the national loan guarantee scheme enabled businesses to receive a 1% discount on loans, compared with the price of loans outside the scheme. As a result, over 28,000 cheaper loans, worth over £4.6 billion, have been committed to businesses. Of those loans, over £2.7 billion has already been used by businesses to help them to invest and grow.
One of the Government’s most ambitious schemes is the funding for lending scheme. Also referred to as the FLS, this joint project between the Government and the Bank of England was launched in July this year. It works by reducing banks’ funding pressures in return for increased lending to businesses and households. The FLS creates strong incentives for banks to increase lending to UK households and businesses, and as a result of the scheme, we have already seen a number of participating banks launch new and discounted SME loan products. The scheme is transparent, and the Bank of England will publish data on the amount that each bank has drawn from the scheme and how much they have lent to UK households and businesses.
Other Government measures include the enterprise finance guarantee scheme, which enables lenders to provide debt finance to small businesses that can demonstrate that they have capacity to repay the loan in full but do not have sufficient security. The EFG has already supported £300 million of lending in 2011-12 and, subject to demand, is due to provide over £2 billion in total over the next four years.
My right hon. Friend mentioned the newly announced business bank, which is in the process of being created. A number of the bank’s functions will be operational from spring 2013, with the institution becoming fully operational by the following autumn. The bank aims to address gaps in business finance by drawing together the Government’s existing initiatives under one roof in an integrated service to all firms, and £1 billion of additional capital has been allocated to the business bank to stimulate the market for long-term capital. At least £300 million of that will be co-invested over the next two years in channels that will diversify the sources of finance available to SMEs, such as non-bank lenders.
As my right hon. Friend has rightly pointed out, the public want to know that the money from all those schemes is finding its way from banks to businesses, so let me say a word or two about the importance of transparency. I believe that we are going further than any Government to ensure transparency in lending, especially in relation to the lending that the Government are helping to provide. The Government will be working with industry—through the British Bankers Association and other interested parties—to get a commitment from the banks that they will publish more granular data. We have agreed to work with industry to collate and publish lending data that are disaggregated by institution and presented on a postcode-level basis. The Government will take this forward as an urgent and pressing matter.
In reiterating our commitment to make progress in this area, I confirm tonight that, should our negotiations with industry fail to deliver for any reason, the Government will introduce amendments to the Banking Reform Bill to ensure that the data, in disaggregated and postcode-specific form, are published. That will enable my right hon. Friend to see exactly how much the banks are lending to small businesses in Hazel Grove. Indeed, it will allow all Members to see similarly detailed data. I hope that my right hon. Friend agrees that that will be a welcome development.
I want to say something about the appeals process, which I do not think is given enough air time and which is not as well known as it should be. It is important for businesses that fail to secure loans to be given clear and honest information about the reasons for that. In April 2011, the major UK banks established the appeals process as one of the 17 commitments of the business finance taskforce. The process allows any business with a turnover of up to £25 million that has been declined any form of lending to appeal against the decision, for any reason, to the participating bank concerned. If an appeal is raised, the decision will be reviewed by a second person from the bank who was not involved in the original decision. The results of the first year of the process show that in 40% of cases in which a decline was appealed against, a lending agreement with which both parties were satisfied was reached.
I am not sure whether the four companies in my right hon. Friend’s constituency have tried to use the process, but if not, I certainly recommend it. He said in his speech that he had raised the issue with some of the banks, and mentioned the “ambassador to the north” from Lloyds TSB. I hope he agrees that it is worth while for the Government to advertise the appeals process and ensure that enough people know about it. Better promotion is needed, so that every firm knows that it has somewhere to turn.
We must bear in mind, however, that banks and other lenders must make sensible decisions about whether to lend, how much to lend and on what terms to lend. Lenders consider a number of factors when making such decisions, including the cost of obtaining funds and the risk that some borrowers will default. Both these factors have been heightened by the financial crisis in the eurozone, and that may have contributed to changes in the way in which some banks have approached their lending activities. Decisions about whether to lend to specific businesses remain commercial decisions for banks to make. It is important for them to have in place the correct lending criteria, so that we do not see a return to the excessive balance sheet growth that we saw during the financial crisis.
Towards the end of his speech, my right hon. Friend suggested that a meeting could be convened between him—along with, perhaps, some representatives from his constituency—and members of the British Bankers Association, including some of the banks that he mentioned this evening. I would be more than happy to write to the BBA and try to convene such a meeting on his behalf, because I believe that it is a sensible idea. Perhaps we can take that up directly later.
The Government believe that it is important for viable businesses that want to invest and grow to have access to the finance that they require in order to do so, and we are therefore pursuing a substantial agenda. I thank my right hon. Friend again for raising this important issue. The Government are well aware that banks play a vital role in serving the economy, and I assure him that we take this issue very seriously.
Question put and agreed to.