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Oral Answers to Questions
(9 years, 5 months ago)
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Jeremy Lefroy (Stafford) (Con)
1. What plans he has to invest in the armed forces helicopter fleets.
The Minister for Defence Procurement (Mr Philip Dunne)
The Government are investing to transform the helicopter fleets supporting our armed forces. Last week’s news of a bigger budget and confirmation that we will meet NATO’s target of 2% of gross domestic product reinforces confidence in our equipment plan, which sets out our plans to spend more than £12 billion on helicopters over the next 10 years.
Jeremy Lefroy
I thank the Minister for the welcome investment in the helicopter fleet, which is underpinned by the commitment to spending 2% of GDP. The tactical supply wing of the RAF, which is based in my constituency of Stafford, supports UK, NATO and allied helicopters around the world by performing hot refuelling, which means that the rotors are running. Will he confirm that sufficient resources will be made available to TSW so that it can support the investment in the new fleet?
Mr Dunne
I congratulate my hon. Friend on taking such an interest in the tactical supply wing, which is based in his constituency. I believe that he has seen it on duty, supporting our training activities in Kenya. I join him in paying tribute to the unit, which provides invaluable support to deployed helicopter fleets, at extreme and very high readiness. It recently supported our Merlin helicopters on HMS Bulwark to assist in the fight against Ebola in Sierra Leone and in the human trafficking efforts in the Mediterranean. I know that he takes a great interest in both matters.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Minister will know that it is not only what we buy that is important, but where it is manufactured. What percentage of our helicopters are made in the UK, and what about the other defence industries that seem to be declining? We are relying too much on imported defence equipment.
Mr Peter Bone (Wellingborough) (Con)
Does the Minister agree that we want the best helicopters for our forces? It is right that there is a spread, but we want the best, not necessarily just ones that were made in this country.
Mr Dunne
I completely agree with my hon. Friend, who has some knowledge of this subject; I met his son flying one of the Chinook aircraft in his constituency. It is right that we invest in the best capability and provide our forces with the best equipment that is available across the world, irrespective of where it is manufactured.
Mr Robin Walker (Worcester) (Con)
2. What steps he is taking to increase the number of cadet units in schools.
The Parliamentary Under-Secretary of State for Defence (Mark Lancaster)
I am sure that my hon. Friend will have welcomed the Chancellor’s announcement in last week’s Budget of an extra £50 million to expand the number of cadet units in schools to 500 by 2020. That is excellent news and will ensure that more young people get to experience the life-enhancing activities that cadet service brings.
Mr Walker
I do, indeed, welcome that excellent investment. I recently met members of the cadets and reserves association for Hereford and Worcester at the Three Counties show, where they told me about their excitement at more state schools being able to host cadets. Will the Minister update me on the progress of that project in Worcestershire?
Mark Lancaster
I am delighted that, in addition to the existing combined cadet force units in Kidderminster and Stourbridge, four more schools in Worcestershire will give their pupils the chance to join a CCF unit as a direct result of the cadet expansion programme: the Tudor Grange academies in Redditch and Worcester have established new units; and North Bromsgrove and South Bromsgrove high schools have forged partnerships with the CCF unit at Bromsgrove school. This is a real success story and I am delighted that many more young people will reap the benefits of belonging to a cadet unit.
Mrs Madeleine Moon (Bridgend) (Lab)
Community-based cadet forces heard with great envy about the £50 million of additional funds for school-based cadet units, but what will be the impact of that funding on community-based units? There is great concern that students will be seduced into staying in school, rather than attending community-based units. Some instructors in community-based units are extremely anxious that they will be wound down and lose their important role within their communities.
Mark Lancaster
The hon. Lady is right that the cadet expansion programme applies to schools, and that there are two types of cadet unit. We are absolutely determined that the programme will not have a negative impact on community cadets, and to that end I am looking carefully at how we can continue to enhance the role of our adult volunteers, for example by considering the expansion of Frimley Park, where they are trained.
Andrew Griffiths (Burton) (Con)
3. What progress he has made on recruitment to the reserve forces.
David Morris (Morecambe and Lunesdale) (Con)
4. What progress he has made on recruitment to the reserve forces.
Mr Nigel Evans (Ribble Valley) (Con)
15. What steps he is taking to ensure that reserve forces are at full strength.
The Parliamentary Under-Secretary of State for Defence (Mr Julian Brazier)
Six thousand, eight hundred and ten personnel joined the reserve forces in the last financial year, an increase of 65% on the year before. We have made significant improvements to recruiting processes, the offer to reservists and the support we give employers. As a result, recruitment continues to improve, and we remain committed to meeting our overall target.
Andrew Griffiths
I congratulate the Minister not only on the fantastic decision to spend 2% of GDP on our armed forces but on his decision to save William Coltman House, the Army reservist centre in Burton. Will he join me in commending Major Marvin Bargrove and everybody else involved for their work in increasing recruitment and showing people in Burton the opportunities that are available through being part of our reservist force?
Mr Brazier
I share my hon. Friend’s delight both at the announcement of the 2% commitment and at the fact that we have been able to save the centre in Burton. He will be aware that 4 Mercian, which has a detachment there, has recently been deployed in a number of interesting exercises, as well as providing two formed platoons for an operational deployment in Cyprus.
David Morris
What progress has the Department made in getting employers to recognise the benefits of their employees becoming reservists, and of hiring reservists?
Mr Brazier
This year, we have already awarded 160 new bronze awards and 25 new silver awards for employers. We are also building links between companies in industry sectors and their equivalent reserves. For example, the Royal Signals is formalising links with BT, Vodafone, HP and Virgin Media; Defence Medical Services has an excellent arrangement with the NHS; and the Military Provost Service is partnering with Serco.
Mr Nigel Evans
I, too, welcome the 2% commitment, which will ensure that the right level of reserves will be reached.
Does the Minister agree that it is absolutely right that reservists who see action get the right equipment to protect them, which would include the use of drones manufactured by some of my constituents at BAE Systems?
Mr Brazier
The 2% commitment enables us to reconfirm the additional £1.8 billion for the reserves. All reservists today are routinely supplied with the same uniform and personal equipment as their regular counterparts, and last year we were able to bring forward earlier than expected £45 million of investment for dismounted close combat equipment. I am afraid that it is above my pay grade to answer my hon. Friend’s question about drones.
Derek Twigg (Halton) (Lab)
The Prime Minister has said today that he wants an increase in the number of special forces. Given our armed forces’ greater reliance on reservists, what are the Minister and the Government doing to ensure that we still have a good pool from which to pick our special forces?
Mr Brazier
As a former Defence Minister, the hon. Gentleman will know that Ministers of the Crown never talk about special forces in the Chamber. On his wider point about the size of the pool in the armed forces as a whole, our commitment, as shown most recently by the 2% announcement, is to outstanding armed forces in quality and equipment.
Mr John Spellar (Warley) (Lab)
I understand that the coroner is due to give his judgment shortly, possibly tomorrow, in the case of the reservists who died in the Brecon Beacons. Will the Minister undertake to come to the House and make a statement following that judgment?
Mr Brazier
We will have to wait for tomorrow’s judgment before making a decision on that.
Mr Kevan Jones (North Durham) (Lab)
Two weeks ago the Secretary of State said that he was confident that the Government’s target for reserve recruitment would be met. He said that the programme was “now back on schedule”. However, last month the Major Projects Authority downgraded the Future Reserves 2020 project from “doubtful” to “unachievable”. Who is right, the Major Projects Authority or the Secretary of State?
Mr Brazier
The Major Projects Authority reviewed the Future Reserves 2020 programme almost a year ago, in September 2014. By convention the review is published six months behind, and because of purdah and the election it was published something like 10 months behind. A great deal of water has flowed under the bridge since then.
Mr Brazier
The target of 30,000 Army reservists—indeed, 35,000 trained reservists across the three services—was firmly in the Conservative party’s manifesto, and this Conservative Government are committed to delivering it.
Mr James Gray (North Wiltshire) (Con)
I warmly welcome the maintenance of that target, and I congratulate the Minister on what has been achieved so far. He will recall that the purpose of the target was to enable the reserve and regular forces to be interoperable—change backwards and forwards between each other. A reserve force was to do precisely the same job as the regulars who, in the case of the Army, we were then cutting by 20,000. Will he confirm that the excellent plan that he laid out before the last election—and which has been laid out consistently in the House since—will remain? Will there be any change in that way that we use reserves?
Mr Brazier
As my hon. Friend knows, the Government do not accept that the expansion of the reserves was a direct swap with regulars in the way that he describes. The purposes of the reserve forces were set out in the commission—which, as he says, carried my signature—and were threefold: to provide extra capacity at slightly lower readiness; to provide skills not available to the military; and to rebuild the connection between the military and society. We are committed to all those things, and the commitment of £1.8 billion over the next 10 years for reserves, which was recently reaffirmed by the 2% commitment to defence spending, further underlies that.
Mr Speaker
If the Minister would look at the House we would all be deeply obliged to him. I understand the natural temptation to turn round, but if he could face the House it would be helpful.
Keith Vaz (Leicester East) (Lab)
I welcome the Prime Minister’s commitment to increase by 10% the number of our armed forces from ethnic minorities. Can the Minister confirm that that will include members of the reserve forces?
Mr Brazier
Yes, I can. We are strongly committed to our black, Asian and minority ethnic targets. It is a fact that the attraction of UK citizens from ethnic minorities—as opposed to Commonwealth citizens—to the reserve forces, has consistently run ahead of figures for the regular forces.
Mrs Sheryll Murray (South East Cornwall) (Con)
5. What assessment he has made of the potential contribution to the economy of the building of the Queen Elizabeth class aircraft carriers. [R]
The Secretary of State for Defence (Michael Fallon)
At its peak in 2013-14, the carrier programme created or sustained around 8,000 jobs at shipyards in Glasgow, Portsmouth, Devon, Birkenhead, Newcastle and Rosyth, with a further 3,000 jobs in the supply chain. These are the largest and most powerful warships ever built for the Royal Navy, and they will be flagships for British technology and innovation for the next 50 years.
Mrs Murray
The House will know of my special interest because my daughter is an officer in the Royal Navy, and I know that she and her colleagues will welcome the 2% commitment. The excellent initial sea training facility in my constituency at HMS Raleigh contributes to the economy of Torpoint and the surrounding area. Is the Minister confident that we are meeting the training requirements necessary to ensure that we have the manpower to run those ships?
Michael Fallon
I pay tribute to the service of my hon. Friend’s daughter in the Navy. Although three times the size of HMS Invincible, the new carriers will operate with approximately the same number of crew. The Royal Navy is already planning to ensure that it has the suitably trained and qualified people it needs, which includes training at HMS Raleigh in my hon. Friend’s constituency and at Devonport nearby.
Brendan O’Hara (Argyll and Bute) (SNP)
As the Secretary of State points out, the Queen Elizabeth class was partly built on the Clyde where the Type 26 frigates are to be built. Can he explain a quote from the Cabinet Office, reported in yesterday’s edition of The Sunday Times, which stated that the Type 26 frigates will now be ordered in small batches
“to bring realism to the programme”?
What does that mean, and what was so unrealistic about the initial order?
Michael Fallon
We confirmed earlier this year that we are spending £859 million on the design of the Type 26 frigates and on some of the long-lead items for the first three.
Brendan O’Hara
I have no doubt that the Type 26s are on the order book, but could the Secretary of State explain the quote from The Sunday Times yesterday about the need
“to bring realism to the programme”?
What was so unrealistic about the initial programme?
Michael Fallon
Only the Scottish National party could regard £859 million as somehow half-hearted. We will finalise the design of the ships shortly, but we have to make sure that we get good value for taxpayer pounds.
Nigel Adams (Selby and Ainsty) (Con)
6. What plans he has to strengthen the armed forces covenant.
Rishi Sunak (Richmond (Yorks)) (Con)
9. What plans he has to strengthen the armed forces covenant.
Marcus Fysh (Yeovil) (Con)
16. What plans he has to strengthen the armed forces covenant.
The Parliamentary Under-Secretary of State for Defence (Mark Lancaster)
The Government are honouring their pledges under the covenant and encouraging wider society to think about its contribution. The Secretary of State has written to the chief executive of every company in the FTSE 350 asking them to consider what they might do better to support our armed forces community, including by signing a corporate covenant.
The demands of service life can impose obstacles for personnel, for example in credit ratings, mortgages and even mobile phone contracts. We are taking forward work to combat commercial disadvantage as a priority.
Nigel Adams
I am keen for companies in my part of north Yorkshire to sign up to the corporate covenant. Can the Minister update the House on what plans he has to extend the scheme across the country?
Mark Lancaster
As I mentioned, the Secretary of State has already written to the chief executives of the 350 largest companies, but the House could do worse than follow the example set by my hon. Friend who is, I know, a champion of the armed forces in his constituency. In light of that, I intend to write to all hon. Members to offer them an information pack and to encourage them to engage with companies in their constituencies, so that we can extend the corporate covenant across the UK.
Rishi Sunak
My constituents at Catterick garrison welcome the 2% commitment, but commercial disadvantage often bedevils them when it comes to areas such as insurance and mortgages. Can my hon. Friend update the House on how he is working with companies to tackle that disadvantage?
Mark Lancaster
The Government have taken a number of steps to level the playing field for those in the military who seek financial products. We have secured a pledge from the UK Cards Association, the British Bankers Association and the Council of Mortgage Lenders to notify their members that those who serve in the armed forces should not be disadvantaged because of their occupation, and that applications for credit and mortgages should be treated fairly and consistently.
Marcus Fysh
May I start by expressing my gratitude for the covenant funding that Somerset has received, including for the Tall Trees family centre in Ilchester, which serves the Fleet Air Arm at Yeovilton and their families? It has been brought to my attention that the criteria for fertility treatment for those serving in the Army can be more restrictive on the issue of existing children than those of some clinical commissioning groups. Will the Minister please look into that as a matter of urgency so that we can continue to ensure, in the spirit of the covenant, that no one is disadvantaged by serving in the forces?
Mark Lancaster
The NHS has committed to providing fair treatment to the armed forces community. I would be concerned if any policies discriminate against our service personnel, but I am not aware that that is the case for the assisted conception policy. That said, if my hon. Friend has evidence to the contrary, I would be delighted to meet him in support of his constituents.
Marie Rimmer (St Helens South and Whiston) (Lab)
It is over a year since the Labour party called on the Government to undertake an audit of what local authorities are being asked to do and what resources they are being given to meet the expectations laid out in the community covenant—which we are all committed to. When will the Government carry out such an audit, so that we know once and for all what is actually happening on the ground and can start to take steps to rectify problems and meet the spirit of the covenant and the Government’s intentions?
Mark Lancaster
I am delighted to say that all local authorities in England, Scotland and Wales have now signed the covenant, and that is excellent news. I am keen that we should have best practice across local authorities, and we have the annual report to Parliament, which has now been published on three occasions. I am more than happy to look at this matter and come back to her.
Mr David Hanson (Delyn) (Lab)
Last Friday, I attended a military covenant event in Flintshire, organised by the county council, which brought together employers to look at how they could recruit reservists and provide employment to former military personnel. The outputs of that are very successful. Will the Minister give an indication not just of the number of those who have signed the covenant but of the outputs of their involvement with the covenant, through a proper audit?
Mark Lancaster
I am delighted to hear the good news. Word is finally spreading across the land and we are seeing some areas of best practice. I recently awarded Barclays a gold award. Its AFTER programme is a fine example to other companies of the outputs the right hon. Gentleman desires.
Yvonne Fovargue (Makerfield) (Lab)
The problem with the military covenant is that it is not being properly observed and veterans still remain a disadvantaged group in civilian society. A poll carried out for SSAFA last month makes it clear that seven out of 10 people believe not enough is being done to support ex-armed forces personnel. The same poll found that eight out of 10 people had never heard of the covenant. Many of the veterans who face the biggest problems are under 35 and, although that is not the group people think of when they imagine a veteran, they do struggle greatly. SSAFA says that one in 20 has been forced to take out a payday loan. What in particular are the Government doing to address the problems faced by younger veterans?
Mark Lancaster
I am slightly disappointed by the hon. Lady’s tone. I think this Government have done more than any previous Government to address these matters: it was this Government who enshrined the military covenant in law; it was this Government who, for the past three years, had a report to Parliament; and we have invested nearly £150 million of LIBOR funding. Yes, these things do take time, but we are moving forward in a positive way. The hon. Lady seems to quote rather selectively from the SSAFA report. I would much rather come to this Dispatch Box and work with her to ensure that we can move this forward, rather than simply try to pick it to pieces.
Ms Margaret Ritchie (South Down) (SDLP)
7. What discussions he has had with the Northern Ireland Executive on submarine activity in the Irish sea in the past 12 months; and if he will make a statement.
The Minister for the Armed Forces (Penny Mordaunt)
There have been no such discussions between the Secretary of State, or other Defence Ministers, and the Northern Ireland Executive.
Ms Ritchie
The Minister is well aware that I have been in correspondence with her regarding an incident on 15 April, when a Northern Ireland-registered fishing vessel had its gear snagged. The Ministry of Defence confirmed that it was not a vessel belonging to the Royal Navy. Would it be possible for the Minister and the MOD to pursue the matter of jurisdiction and who undertook such activity, in order to obtain compensation for the loss of fishing days?
Penny Mordaunt
I know that the hon. Lady is very concerned about this issue. She will know that the Royal Navy takes its responsibilities very seriously. Since 1993, it has adhered to the comprehensive code of practice and conduct for operations in the vicinity of fishing vessels, which ensures not only the safety of our ships and submarines, but other vessels. I can tell her that any NATO submarine under UK operational control would also have to conform to that code of practice, but obviously we are not responsible for other people’s submarine operations.
Andrew Bridgen (North West Leicestershire) (Con)
Does my hon. Friend agree that under the Scottish National party’s deeply flawed defence plans, this country would have far less ability to detect, intercept and deter potentially hostile vessels in the Irish sea and elsewhere? [Interruption.]
Mr Speaker
Order. Let me just remind the hon. Gentleman, in the most genial spirit but in terms that are unmistakable, that questions must relate to the responsibilities of Ministers, not of other parties. Let us leave it there.
Andrew Stephenson (Pendle) (Con)
8. What plans he has to increase the proportion of recruits to the armed forces who come from ethnic minority groups.
The Minister for the Armed Forces (Penny Mordaunt)
The Prime Minister has made a clear commitment to have at least 10% of armed forces recruits from black, Asian and ethnic minority backgrounds by 2020. Increasing the diversity of our workforce is an operational imperative, which is why we have set up a diversity programme. Each service has developed a range of initiatives to achieve this aim. An increasing defence budget and the regeneration of our capabilities will be an attractive proposition to any potential recruit, no matter what background they come from.
Andrew Stephenson
Pendle residents have a strong tradition of service in our armed forces. I was pleased that the Duke of Lancaster’s Regiment exercised their freedom of the borough of Pendle in May with a parade through the town of Colne. Is my hon. Friend aware of any outreach work being done by our armed forces to ensure that we are recruiting from all of Pendle’s diverse communities, including our sizeable Pakistani heritage community?
Penny Mordaunt
I am pleased to tell my hon. Friend that a great deal is being done in the Pendle area in this regard. That same regiment also conducted an adventurous training event over a weekend in May with community leaders from Pendle and surrounding areas, including the chairman of Lancashire council of mosques. The Army will be holding a personal development engagement event at Burnley College and at the mosque in Nelson. As my hon. Friend is aware, the Army promotes regular and reserve opportunities at its annual jobs fair in Pendle, an event my hon. Friend has been instrumental in organising.
Karen Lumley (Redditch) (Con)
10. What steps his Department is taking to degrade and defeat ISIL.
Sir David Amess (Southend West) (Con)
13. What steps his Department is taking to degrade and defeat ISIL.
The Secretary of State for Defence (Michael Fallon)
In addition to over 300 strikes, the Royal Air Force’s sophisticated intelligence surveillance and reconnaissance aircraft are making a crucial contribution—some 30% of the total intelligence effort—to the counter-ISIL coalition air campaign. We have trained over 1,600 members of the Iraqi security forces, and last month we announced that up to an additional 125 personnel will train Iraqi security forces in countering improved improvised explosive devices and in other vital skills.
Karen Lumley
It is clear that we need to defeat ISIL in Iraq and Syria, but will my right hon. Friend confirm that if and when further action needs to be taken, Government time will be allocated for a debate and there would be a vote in this House?
Michael Fallon
RAF intelligence surveillance and reconnaissance aircraft are already operating over Syria at the moment. As the Government have made clear, we will need to return to Parliament for approval if we propose to undertake air strikes against ISIL in Syria. ISIL has its command and control centres in north-eastern Syria, from where it is directing forces against the democratic Government of Iraq and from where it is planning terrorist attacks against the west, including Britain.
Sir David Amess
A key part of defeating and degrading Daesh is to destroy its propaganda campaign and not to give it legitimacy by calling it Islamic or a state. Will my right hon. Friend join middle east countries such as Kuwait, United Arab Emirates, Saudi Arabia and other countries such as France, Pakistan and Turkey by calling it Daesh?
Michael Fallon
Understanding the appeal of ISIL and its recruitment approach is a key focus of the coalition’s communications strategy. The term “Daesh” is now regularly used by Ministers in our Government and officials within the middle east and when engaging with many of our coalition partners. However, the term “ISIL” is still used when addressing UK audiences as this, at the moment, is better understood.
Conor McGinn (St Helens North) (Lab)
It is good that the Government have invited the Leader of the Opposition and my hon. Friend the Member for Gedling (Vernon Coaker) to tomorrow’s National Security Council meeting to discuss these important issues—and I very much welcome that. In the same spirit of co-operation and in the national interest, will the Secretary of State commit to a comprehensive, transparent strategic defence and security review with full parliamentary scrutiny?
Michael Fallon
We are committed to a full and comprehensive strategic defence and security review. It is already under way, and at Question Time last month I invited any Member to contribute to it, and we will invite other stakeholders with interests in defence matters to make a similar contribution.
Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)
Does the Secretary of State agree that this Chamber has a great opportunity to set an example by using the terminology “Daesh” on each and every occasion that it is mentioned here?
Michael Fallon
I note what the hon. Lady says. As I said, I use the term “Daesh” when I am in the middle east, talking to our partners in the coalition or the media there. Until now, ISIL has been the term that is better understood here in the UK, but it is certainly worth reflecting on whether we should now seek to move on to using Daesh, which does not confer the sort of legitimacy that the title ISIL—involving the word “state”—does.
Vernon Coaker (Gedling) (Lab)
Clearly, we all wish to see this country defeating terrorists and terrorism. Let me say again that they must not win and cannot be allowed to win. What assessment has the Defence Secretary made so far of the actions we have taken to defeat and degrade ISIL?
Michael Fallon
The coalition, which involves over 60 countries, about two dozen of which are taking military action, has been assisting the legitimate, democratic Government of Iraq in checking the advance of ISIL, and has had some success in pushing it back—in the recapture of Tikrit, for example, and in other areas up the Tigris and west along the Euphrates. This is clearly going to be a long campaign, however, and it will involve further necessary reforms in Iraq itself, including reforms of its army and the introduction of a national guard that can give the populations that have been liberated the confidence and security that ISIL will not return.
Vernon Coaker
What the Secretary of State has said shows that this is a complicated picture. As I have said, we stand ready to work with the Government to defeat ISIL and will consider carefully any Government proposals for further military action, but will the Secretary of State reassure us that any proposals that he does present will have clear objectives in respect of defeating ISIL? Will he, in presenting such proposals, also make it clear what support will be provided by other countries in the region, and explain how the proposals fit in with the Government’s overall foreign policy objectives in the region and beyond?
Michael Fallon
I can give the hon. Gentleman that assurance, and I welcome the approach that the Opposition are adopting. We do not currently intend to present proposals to the House, but we have a strategy to help the Government of Iraq defeat ISIL, which we are pursuing in Iraq. We are also flying reconnaissance flights over Syria, and helping to train members of the Syrian opposition. As I think the hon. Gentleman implied, the situation in Syria is very different from and more complex than the situation in Iraq, and any strategy in Syria must properly reflect that.
Mr John Baron (Basildon and Billericay) (Con)
11. What assessment he has made of the implications for his policies of the decision by the Major Projects Authority to give the Future Reserves 2020 programme a red rating.
The Parliamentary Under-Secretary of State for Defence (Mr Julian Brazier)
My hon. Friend will have heard my earlier answer.
Since the MPA report, governance has been shaken up, with each service delivering its own programme alongside a defence-level enabling structure. My hon. Friend will know from many earlier answers that our improvements in recruitment, selection and training processes are bearing fruit. We remain committed to delivering the FR20 requirement.
Mr Baron
The Minister will nevertheless know that the MPA declares as red projects that it believes risk being unachievable. Given the delays, cost increases and capability gaps, and given reports that superannuated reservists and those who do not regularly attend parades are remaining on strength, at what point will the Government consider scrapping their plans and increasing the size of the regular Army?
Mr Brazier
We recruited nearly 7,000 reservists across the three services last year. That was a rise of 65%, and the rise was even greater within the Army Reserve. As for my hon. Friend’s reference to superannuated reservists, I visited 3 Royal Welsh last weekend, and the average age of that battalion has dropped from 41 to 31 over the past three years.
Paul Flynn (Newport West) (Lab)
12. If he will establish an inquiry into UK armed forces operations in Helmand province in 2006.
The Minister for the Armed Forces (Penny Mordaunt)
No decisions have been made about an inquiry, but we have been learning tactical lessons throughout our operations in Afghanistan. We will also want to look at the broader lessons that can be learnt from the campaign. However, combat operations have only recently ceased, and our focus remains on supporting the Afghan Government through NATO’s current mission.
Paul Flynn
Five of our brave British soldiers lost their lives in the first five years of the Afghan war. An additional 448 lost their lives following the decision to invade Helmand with impossibilist aims and a hope that not a shot would be fired. Do not the loved ones of the fallen, and the House, deserve to know the truth of what was a major blunder, certainly before we contemplate sending more troops into a four-way civil war in Syria?
Penny Mordaunt
I thank the hon. Gentleman for raising that important issue. The matters to which he has referred, particularly the incidents in 2006, have been the subject of a Defence Committee report, and I suggest that he read the report and the Government’s response to it. Along with the Under-Secretary of State for Defence, my hon. Friend the Member for Canterbury (Mr Brazier), who is the reserves Minister, I served on the Committee at the time.
Having recently returned from Afghanistan, and having spoken to some of the next of kin at the recent Para memorial, I would say that we have a legacy to be proud of. Afghanistan has never had what it has now. There are millions of people in education, including girls; there is a strong army and a strong police force; and economic regeneration is taking place. Although it has cost us much in blood and treasure, we have a legacy to be proud of in Afghanistan, and the United Kingdom is safer.
Scott Mann (North Cornwall) (Con)
14. What capability upgrades are planned for Typhoon jets.
The Minister for Defence Procurement (Mr Philip Dunne)
The Eurofighter Typhoon is a dynamic multi-role combat jet whose capability is continuously evolving. Tranche 2 and tranche 3 aircraft are now fitted with the Paveway IV bomb. Integration of the Storm Shadow deep-strike weapon is under way. The Meteor beyond visual range air-to-air missile and the Brimstone 2 precision effect missile will add world-class air-to-air and precision strike capabilities to the aircraft.
Scott Mann
I thank my hon. Friend for his response and I am sure he and the whole House will join me in welcoming the Chancellor’s announcement that this Government are committed to spending 2% of GDP on defence. How will this improve our air force capabilities?
Mr Dunne
I am glad that my hon. Friend recognises the importance of the 2% commitment, and I welcome him to his place. We have successfully intercepted all potential incursions that have been shadowed by our quick reaction Typhoon aircraft and we can be confident that the Typhoon’s exceptional performance makes it capable of combating any threats sent in the direction of our shores.
Victoria Atkins (Louth and Horncastle) (Con)
20. Typhoon jets fly from RAF Coningsby in my constituency, as does the Battle of Britain memorial flight. Will the Minister join me in congratulating the RAF on a magnificent flypast last Friday of Spitfires, Hurricanes and a Typhoon to mark the 75th anniversary of the Battle of Britain?
Mr Dunne
I also welcome my hon. Friend to her place and she is right to highlight the importance of the magnificent flypast last Friday to mark the 75th anniversary of the Battle of Britain. I am very happy to join her in congratulating today’s RAF pilots on this fitting tribute to their predecessors in years gone by. These events highlight the bravery and professionalism of the men and women who have served and continue to serve our country so well. She might like to know that my hon. Friend the Minister for the Armed Forces will be visiting RAF Coningsby to congratulate them in person later this week.
Diana Johnson (Kingston upon Hull North) (Lab)
17. What recent discussions he has had with the Foreign Secretary on the relationship between the national security strategy and the strategic defence and security review.
The Secretary of State for Defence (Michael Fallon)
I have regular meetings with the Foreign Secretary as well as cross-Government meetings such as at the National Security Council, where we discuss a range of strategic matters.
Diana Johnson
Given the Chancellor’s announcement in the Budget to spend 2% of GDP on defence, can the Secretary of State tell the House whether the single intelligence account and the £800 million-worth of military pensions spending are now to be included as part of the defence budget?
Michael Fallon
I hope the hon. Lady will welcome the announcement last week that we are going to continue to meet the NATO target. If pensions are on the defence budget, then of course they count as defence expenditure, and they have in fact been on the defence budget for a very long time now. So far as intelligence matters are concerned, money that is spent on defence should properly be counted as defence.
Hannah Bardell (Livingston) (SNP)
Is it not sheer hypocrisy by the Government to criticise others on maritime patrols and investment when it is their party that has downgraded and stripped our defences to the bone, to the point that we now have no maritime defence, and NATO sea patrols have had to come in and look for alleged Russian submarines that have been dragging Scottish fishing boats under the sea?
Michael Fallon
We have plenty of maritime defence, but when we took office we had to end the Nimrod programme, which was years behind schedule and about £700 million or £800 million over-budget. Some 23 Nimrods were ordered back in the 1990s by a Conservative Government, but when we came to office 13 years later not one had actually been delivered.
Andrew Gwynne (Denton and Reddish) (Lab)
The point is that since the Government scrapped Nimrod the UK has been without a maritime patrol aircraft, so may I gently ask the Secretary of State to confirm whether the next strategic defence and security review will contain a commitment to an MPA?
Michael Fallon
First, I should make it clear that we do, through other means, still have some maritime defence capability without maritime patrol aircraft, but we will of course look at a whole range of capabilities as part of the current SDSR which is now well under way.
Stewart McDonald (Glasgow South) (SNP)
18. What recent assessment he has made of the effectiveness of the UK’s military co-operation with the Government of Saudi Arabia.
The Secretary of State for Defence (Michael Fallon)
The UK has a long-standing relationship with the Kingdom of Saudi Arabia, which is a key strategic partner of ours. I spoke with its Defence Minister, the deputy crown prince, only last week. Our co-operation helps to keep Britain safe from terrorism.
Stewart McDonald
At that meeting, did the Secretary of State highlight the fact that last year 90 people were executed in Saudi Arabia and that figure was reached by the end of May for this year? Sweden has dropped its memorandum of understanding on defence co-operation over the mistreatment of the Saudi blogger Raif Badawi and other human rights concerns. When will we see some urgency and action from the Secretary of State?
Michael Fallon
We do raise these cases at most senior levels with the Government of Saudi Arabia and we maintain a regular dialogue with them on a range of human rights issues. We strongly support the right to freedom of religion and belief. But let me be very clear: our relationship with Saudi Arabia is of long standing. It is based on a number of different pillars—trade, economy, education, defence, culture and security—and there is no other middle east country in which we have such a diverse and important set of interests to maintain.
Kirsten Oswald (East Renfrewshire) (SNP)
19. How existing and anticipated threats to UK interests will be taken into account (a) as part of the strategic defence and security review and (b) in future allocations of defence expenditure.
The Minister for Defence Procurement (Mr Philip Dunne)
The SDSR will consider the broad range of threats we face, both now and in the future. The national security strategy is being reviewed and will draw on the latest version of the national security risk assessment. As my right hon. Friend the Chancellor made clear last week, this Government are committed to increasing the defence budget by 0.5% in real terms and meeting the NATO pledge to spend 2% of GDP on defence each and every year of this decade.
Kirsten Oswald
I thank the Minister for his answer. When considering the SDSR, we are all aware of the highly skilled workforce on the Clyde who are waiting to build Type 26 frigates. Can he explain what was meant by the article in The Sunday Times which stated that the Government would be “bringing realism” to this programme? What does that mean for the future of this vital project? Can he guarantee that there will be no further delays or doubts cast upon it?
Mr Dunne
My right hon. Friend the Secretary of State has already answered that question in response to a previous one. The workforce on the Clyde are currently manufacturing three offshore patrol vessels commissioned by the previous coalition Government. We want to make sure that before we enter the full manufacturing contracts, the contracts’ structures are robust and we can hold the contractors to account, unlike what happened with the aircraft carrier contracts, which blew up to more than double their original cost.
Sir Gerald Howarth (Aldershot) (Con)
I am a great fan of my hon. Friend and my right hon. Friend the Secretary of State, but we need a little more clarity on the question of defence spending. Paragraph 2.22 of the Treasury Red Book states:
“The Ministry of Defence budget will rise at 0.5% per year in real terms to 2020-21.”
Given that the economy is growing at about 3%, can my hon. Friend tell me how we are going to meet the 2% commitment when there is to be only a 0.5% increase in the budget? Is it to be done by raiding other accounts?
Mr Dunne
I am very much aware of my hon. Friend’s success in securing a position in the private Members’ Bill ballot to introduce legislation on this very subject. I have the privilege of confirming to him and to the House that I will be answering those debates, so we will have plenty of opportunities to discuss this issue. The bald fact is that we are meeting the 2% commitment this year, and as I have just said, we will meet it each and every year of this Parliament.
Will Quince (Colchester) (Con)
21. What plans he has to invest in new equipment for the armed forces.
The Minister for Defence Procurement (Mr Philip Dunne)
Once again, this Government, in stark contrast to what happened during 13 years of the Labour Government, have not relied on a wish list of unfunded equipment projects. Instead, we have balanced the budget and committed to a real-terms increase in the defence budget. We will be meeting our NATO commitments, not just—I will say it once more—on spending 2% of GDP on defence, but on investing 20% of the defence budget on equipment.
Will Quince
Colchester is home to 16 Air Assault Brigade, the Army’s rapid response unit. Will my hon. Friend ensure that it has the best possible equipment to tackle the many challenges that we may ask it to face?
Mr Dunne
I am very pleased to welcome my hon. Friend to the House. He has a considerable military interest in his constituency, not least the 16 Air Assault Brigade. The new A400M Atlas air transport aircraft is being introduced to replace the C-130 Hercules fleet, and the third of those aircraft was delivered to the RAF last week. The ongoing development trials of the Atlas will mean that parachutists and their equipment from the UK rapid reaction force will be able to parachute from both sides of the aircraft and the ramp, and it will become the air mobility transporter of choice for rapid reaction forces—
Mr Speaker
Order. We are grateful to the Minister. Alistair Carmichael. Not here.
John Pugh (Southport) (LD)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Defence (Michael Fallon)
My immediate priorities are our operations against ISIL and the strategic defence and security review. Last week’s welcome announcement that the defence budget will increase every year and that we will continue to meet NATO’s 2% target means that we can now decide the capabilities and force structure that we need to keep Britain safe.
The Parliamentary Under-Secretary of State for Defence (Mark Lancaster)
The Ministry of Defence does not collect figures on homelessness. However, it is a matter that we take very seriously, and I would be delighted to look into the matter and get back to the hon. Gentleman.
Richard Graham (Gloucester) (Con)
T2. The Gloucestershire-based, UK-led Allied Rapid Reaction Corps is deploying on NATO exercises later this year. I am sure that the Defence Secretary will join me in wishing everyone involved, including my constituents, a successful exercise at this sensitive time. Will he confirm both that the NATO mutual military support clause is sacrosanct and never to be diluted and that this Government take a cautious approach to any suggested proposal of expansion?
Michael Fallon
Our commitment to European security, including to article 5, remains unwavering. We stand by the open-door policy, which allows any European state in a position to contribute to the alliance to apply to join. That process requires consensus among all 28 existing allies, and there can be no short cuts to membership.
Vernon Coaker (Gedling) (Lab)
Further to the question from my hon. Friend the Member for Kingston upon Hull North (Diana Johnson), will the Defence Secretary confirm that, according to the NATO definition, only intelligence operations in support of the military can be used to contribute to the 2% figure? Do the Government use that correct definition, and how much is it?
Michael Fallon
I was hoping that the shadow Defence Secretary might welcome the 2% commitment. Let me be very clear that it is for NATO to classify, according to its guidance, what is counted as defence expenditure. Money being spent on defence in our defence budget should of course count towards the 2% total.
Robert Jenrick (Newark) (Con)
T3. I welcome the additional training that my right hon. Friend announced last month for the Ukrainian armed forces. Will he tell the House what further support the UK is offering? Following the news that plucky Lithuania will become the first country openly to arm the Ukrainians, will he now consider providing anti-tank weapons, drones and other technology that the Ukrainian armed forces desperately require?
Michael Fallon
I can today update the House by saying that the RAF has now delivered more than 3,000 combat helmets, goggles and first aid kits to Ukrainian troops. We have already trained some 850 personnel. We will step up our training over the summer and we will be providing further equipment, although not of the lethal variety. We stand firm with Ukraine in the face of Russian aggression, and we continue to assist its defence of its sovereignty, independence and territory.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
T4. The Minister will be aware of concern in my constituency about the implications of the expansion of the British Underwater Test and Evaluation Centre, particularly the threat of the closing off of the fishing grounds which would threaten the livelihoods of 70 fishing boats and 120 families in my constituency. Will the Minister tell us when the consultation exercise that we have long been promised will begin?
The Minister for Defence Procurement (Mr Philip Dunne)
I am slightly surprised that the hon. Gentleman feels the need to raise this matter again, three weeks after his Adjournment debate in which I addressed those questions very directly. The consultation exercise is part of 200 defence establishments’ bylaws being consulted on—we will be beginning that later this summer. There is a separate exercise with the fishermen, who will not lose their livelihoods as he is suggesting, and that will be undertaken by QinetiQ shortly.
Mr Speaker
Of course, repetition is not a novel phenomenon in the House of Commons.
Simon Hoare (North Dorset) (Con)
T6. Does my right hon. Friend agree with my analysis that the very welcome investment in both Typhoon and the joint strike fighter to provide the Royal Air Force with the best aircraft possible is a direct result of, first, a growing economy and, secondly, sorting out the basket case of an MOD budget that we inherited?
Mr Dunne
My hon. Friend lights on a very important point—that defence plays a part in the prosperity of this nation. ADS, the trade association, has estimated that some £22 billion of economic activity is attributable to the defence industry and it employs some 200,000 people in this country. The combat jet component of that is significant.
Mr Graham Allen (Nottingham North) (Lab)
T5. Does the Secretary of State believe that after the invasion of Iraq and the intervention in Afghanistan and Libya, we have less international fundamentalist religious terrorism or more?
Michael Fallon
I believe that our contribution in Libya to preventing an imminent massacre in Benghazi, the work that we have done in Afghanistan, which my hon. Friend the Minister for the Armed Forces described, and our support for the legitimate democratically elected Government of Iraq have all been worthwhile endeavours.
Mr Nigel Evans (Ribble Valley) (Con)
T7. BAE systems at Samlesbury is about to hit another milestone with the manufacturing of the 200th aft fuselage of the F35. Will the Minister come to BAE Systems at Samlesbury during this period to see at first hand some of the most dedicated and skilled workforce in the United Kingdom?
Mr Dunne
My hon. Friend is right. As the only tier 1 partner in the F35 programme, the United Kingdom is playing a very significant role. Every aft section of every F35 is manufactured at Samlesbury in his constituency, providing high-skill jobs to many of his constituents. I am quite certain that I or one of my ministerial colleagues will have the pleasure of visiting his constituency soon.
Mr Douglas Carswell (Clacton) (UKIP)
T10. The Government have given a commitment to implement my party’s policy and spend at least 2% of GDP on defence. This target has been achieved by including the single intelligence account as defence spending. When might the Government meet the 2% target without cooking the books?
Michael Fallon
I have already made it very clear that no books are going to be cooked. Anything that is included has to meet the NATO guidelines. Where there is expenditure on defence intelligence which comes out of the defence budget, it is right that that should be included in our defence totals. The NATO figures will be there for everybody to see.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
T8. Does the Minister share my concerns that a number of our ex-servicemen and women, having served our country with distinction, end up suffering from mental health issues, family breakdown and homelessness —yes, even on the streets of Dorset? What steps can be taken to help to prevent this?
Mark Lancaster
Naturally, I want the very best for our entire armed forces community and I must emphasise that the vast majority of our service leavers make a smooth transition into civilian life. The Government have put in place a great deal of support for those who find the process difficult, including the allocation of £40 million to a veterans accommodation fund. The best evidence available suggests that the mental health of veterans is as good as that of the civilian population, but where problems do occur the highest standard of support is made available, and over £13 million from the LIBOR fund has been awarded to programmes.
Steven Paterson (Stirling) (SNP)
I am sure the House will be as concerned as I am about reports that Daesh is now targeting Russian parts of the former Soviet Union as a recruiting ground. What action can the UK Government take as part of the international community to combat that?
Michael Fallon
A coalition of some 60 countries has come together to tackle ISIL in Iraq and in Syria, but the hon. Gentleman is right: ISIL is directing or inspiring terrorist activity in many other countries outside. That is why it is all the more important to ensure that it is degraded and ultimately defeated in both Iraq and Syria.
Karen Lumley (Redditch) (Con)
T9. Many of us in the House will welcome the commitment that the UK will meet the NATO defence spending target, but what assessment has my right hon. Friend made of the impact that this will have on our defence capabilities?
Michael Fallon
Defence capabilities will be determined in the strategic defence and security review, which is now under way, in the context of the threats we face at the moment and an assessment of the threats we may face in future. Those choices will now be framed and made easier by the Chancellor’s welcome announcement that the defence budget will grow for the rest of this decade by 0.5% ahead of inflation.
John Woodcock (Barrow and Furness) (Lab/Co-op)
I trust that the Secretary of State was impressed by the extraordinary engineering he saw in Barrow shipyard last week. Will the delay in Artful’s exit have any impact on Successor? Will he join the shadow Secretary of State here on 21 October for our wonderful submarine manufacturing enterprise day, to which all Members of the House of Commons and the House of Lords are invited?
Michael Fallon
I think I attended that event last year, and I look forward to attending it this year if I am invited. I was extremely impressed by my visit to Barrow to see HMS Artful, the latest of our super submarines, as she prepares to sail. She will join Astute and Ambush to help to keep the sea lanes open and contribute where necessary to the fight against terrorism. I hope the whole House will wish her well. We expect her to sail in the next few weeks.
Dr Julian Lewis (New Forest East) (Con)
Will the Secretary of State confirm that there is no question of ordering fewer than 13 Type 26 frigates? How much would we fall short of spending 2% of GDP on defence if we did not include items of expenditure normally borne on the budgets of other Government Departments?
Michael Fallon
As I have made clear, it is ultimately for NATO to classify from each member’s return what properly counts as defence expenditure in the table that is published each year. As far as the Type 26 programme is concerned, my right hon. Friend will know that we have already committed nearly £1 billion to the design phase and to the purchase of some of the long-lead items for the first three frigates in the series.
Kate Green (Stretford and Urmston) (Lab)
Bidders in my constituency report a worrying picture of the Crown Commercial Service’s handling of defence procurement contracts, with unreasonable timescales, inappropriate specification, and tenders being issued and then withdrawn. What steps are being taken to improve matters, especially for SME bidders?
Mr Dunne
The Crown Commercial Service is run through the Cabinet Office, and we are in a long series of discussions with it about transferring commodity-type procurement from Defence Equipment and Support to the CCS. I believe it currently has nine separate categories of activity accounting for over £1 billion of our spend. We are regularly in discussion with it to ensure that its processes are as smooth and efficient for the supply to our armed forces as they are for the contractors involved.
Mark Pritchard (The Wrekin) (Con)
The Secretary of State will be aware that hundreds of Syriac Christians have been murdered by ISIL in Syria. What discussions could he have with the Kurds to see what non-lethal assistance could be given to the Syriacs? Certainly, the Syriac Military Council has four battalions of men who are prepared to fight ISIL in Syria.
Michael Fallon
Syria is already the focus of our largest humanitarian aid programme. I have had regular discussions with the authorities in the Kurdish areas about what more assistance we could provide in training and equipment to the peshmerga, who are taking on ISIL in the north of Syria. Of course, our RAF surveillance aircraft continue to fly intelligence missions in that area.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
What assurances can the Secretary of State give that military spending in Scotland will increase proportionally following the departmental increase outlined in the Budget? Between 2007 and 2012, Scotland received £1.9 billion less than its population share of Government defence spending on major projects. Perhaps he should stop paying lip service and take the opportunity to put things right.
Michael Fallon
With respect, I do not think it is lip service that, as I said, we have committed nearly £1 billion to building the next generation of frigates in Scotland. We are already building offshore patrol vessels in Scotland. Scotland is getting the bulk of the work on the two aircraft carriers. It will be home to one of our three fastjet fleets, and it will constitute the entire home submarine base of the Royal Navy. Scotland does very well out of the defence budget inside a United Kingdom.
Mr Speaker
Order. I am very grateful for the Secretary of State’s reply, but we are pressed for time.
Richard Drax (South Dorset) (Con)
While I warmly welcome the 2% of GDP we have committed to spending on defence, which is excellent news, we must not be complacent, because although the quality of what we are ordering is brilliant, for future events—perhaps, God forbid, a serious and more widespread conflict—we are still down on the quantity.
Michael Fallon
My hon. Friend is right. The SDSR that is now under way has to evaluate not merely the current threats to our country but the future threats that may emerge over the next few years. It is only by sorting out the defence budget—the mess that we inherited—and putting it on a proper footing that we are now able to increase it and to spend on the equipment that our armed forces need.
Parks and Playing Fields in Public Ownership (Protection from Sale)
Tom Pursglove (Corby) (Con)
I beg to move,
That leave be given to bring in a Bill to require public consultation to be carried out in local areas where the sale of park or playing field land owned by a public body is proposed; to require referendums on such proposals in certain circumstances; and for connected purposes.
This Bill has come about in support of thousands of my constituents who are concerned about the proposed selling of a school playing field in Oundle at the site of what will be, in September, Oundle primary school. Recently, there has been a restructuring of the local education system that has led to a three-tier system becoming a two-tier system. In March this year, parents and the school’s governing body were shocked to learn that proposals had come forward for over 50% of the playing field to be sold off. At present, the playing field is well used by the school at breaks and lunchtimes, as well as for games lessons. It is also well used by local community sports clubs. I know that because, as I explained in my maiden speech, only two or three years ago my bowling was dispatched to all parts of the ground by an arguably very lucky batsman. Not only would local school children be adversely affected by this, but losing part of the playing field would have a dramatic effect on local sports clubs, including Oundle Town cricket club.
In response, a petition was immediately started by Julie Grove, a local Oundle mum, whose children will be directly affected by this sale. Then came the brilliantly organised Oundle recreation and green spaces group, who have got out there, spoken to local people and businesses, created campaign videos, and galvanised support for this campaign. I would like to give a special mention to the committee—Lucie Platt, Jo Trott, Paul Kirkpatrick, Ian Talbot, Tristan MacDougall, Jennie Grove and Christina Cork, under the excellent chairmanship of Julie Grove—for all their hard work to date on the campaign. As things stand, the petition has been signed by over 3,750 people, and the numbers are growing by the day. That is very impressive considering that the number of electors in the Oundle ward currently stands at 4,750. It is a very high turnout by any measure. This clearly demonstrates the strength of feeling from the local community, who do not wish to see the land sold off.
Local town councillors have also expressed their opposition to the sale, hosting a packed town meeting back in April. I would like particularly to mention district councillor Rupert Reichhold for his involvement in and support for this campaign. Interestingly, the site in question has not previously been identified for housing development, and nor, I am told, does it feature in the emerging neighbourhood plan that the town council is developing. With the Government’s planning changes, this would make it almost impossible to obtain planning permission on this land, although Northamptonshire County Council could still sell the land to developers.
Talking about the level of support brings me to the substance of my Bill. Despite over 3,750 local residents signing the petition, there is no obligation on Northamptonshire County Council to take that into consideration when reaching a decision; nor does it have any binding effect. With such overwhelming local concern formally registered, how can that possibly be right?
This comes at a time when we already suffer from a chronic lack of pitches in Northamptonshire. Indeed, I know of sports clubs whose members have to travel out of the county to play a home game. I want local youngsters to be able to play sport in the towns and villages where they live. When I was growing up, I was very fortunate to be able to play my sport locally. With that, came lessons for life—teamwork, respect and healthy living. Not everyone has the luxury of transport, which means that travelling out of the county is simply not an option and prevents them from playing for their local club.
While preparing my Bill, I did a bit of research and found that many right hon. and hon. Members on both side of the House have supported similar campaigns to protect local playing fields and parks in their constituencies. For example, only last week I talked to my hon. Friend the Member for Gower (Byron Davies) about his campaign in support of residents trying to protect local playing fields in his constituency. During my time as a councillor in Wellingborough, I remember the numerous conversations I had about how foolish it was for the site of the John Lea school to be sold off by the county council. The playing fields were also sold, with the result that we had a lack of school places and a lack of playing field provision.
I am aware that Education Ministers have real concerns about landlocked schools. That problem has been exacerbated by school playing field sales. Such short-sighted decisions then make it impossible to expand when housing growth comes, and that is a particular concern to residents in Oundle.
As I have mentioned, this is a truly national issue. Between 2001 and 2010, the total number of playing fields sold for development was 242. During the last Parliament, another 103 playing fields were lost. Interestingly, there are no national figures for parkland and other green spaces that have been sold for development. That could be due to the fact that there is no statutory consultee.
The irony of all this is that, although successive Governments have promoted the importance of healthy living and the role that sport and walking plays in that, we have seen dwindling open space to get out and get active. Indeed, when I was joined this morning on BBC Radio Northampton by Dr Richard Benwell from the Royal Society for the Protection of Birds, he made the point that providing every household in England with access to quality green space could save the NHS an estimated £2.1 billion in healthcare costs. Furthermore, these spaces are also lifelines for nature. With 60% of UK species in decline, public spaces are more important than ever for conserving British wildlife.
My Bill seeks to build on the localism agenda and the Government’s excellent measures for protecting assets of community value. The Bill would enshrine in law that a local authority wishing to sell off parks and playing fields must go through the process of a statutory consultation. One of the biggest complaints made has been that consultation on such sales nationally has been shockingly woeful.
I therefore propose that should a verifiable 10% of electors in any ward affected sign a petition, it will trigger a local referendum, of which the result will be binding. Essentially, that would provide a localist lock and ensure that the strength of local feeling is reflected in any decisions taken in relation to local parks and playing fields. In other words, it would be very difficult for the 3,750 people in Oundle to be ignored.
I particularly want to make the point that this Bill does not seek to stop the selling of parkland and playing fields per se; it merely ensures that those who use these important green spaces make the case for them to be kept. Of course, if a public body can demonstrate the benefits of selling any such land, such as alternative provision elsewhere as a direct swap or the introduction of better facilities, it has nothing to fear.
To my mind, not only is the Bill common sense, but it upholds the principle of localism and the big society. In the last Parliament, Ministers did much to progress this agenda, and I believe that the Bill advances the cause further. The Bill is about ensuring that local communities have a genuine say and a real opportunity to influence decisions about the future shaping of their area, because once these green spaces are gone, they are gone forever.
Question put and agreed to.
Ordered,
That Tom Pursglove, Mr Peter Bone, Byron Davies, Ms Gisela Stuart, Kate Hoey, Bob Blackman, Stephen McPartland, Mr Philip Hollobone, Zac Goldsmith, William Wragg, Simon Hart and David Morris present the Bill.
Tom Pursglove accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 23 October, and to be printed (Bill 53).
Ways and Means
Budget Resolutions and Economic Situation
(9 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Communities and Local Government (Greg Clark)
Just over five years ago, on Friday 7 May 2010, another emergency summit of Finance Ministers from across Europe was convened to save the economies of Greece, Spain, Portugal, Italy and Ireland from falling over like a row of dominoes. Here at home, unemployment was galloping away and had passed 2.5 million, 1 million more people than five years before. The Government had lost control of spending, spending nearly £150 billion a year that they did not have in the biggest structural deficit in the western world, which meant they had to borrow one pound in every four they spent. That very day, a note was waiting in the desk drawer of the Chief Secretary to the Treasury, telling his successor with brutal bluntness that “there is no money”.
The Cabinet Secretary had to intervene in the discussions between the political parties to impress on them the consequences of delay in forming a Government. As The Daily Telegraph reported that day:
“UK bond investors, facing huge borrowing demands from the Government this year, started selling…The fear stalking investors is that a delay in forming a coalition will set back plans to tackle Britain’s record Budget deficit, triggering a full-scale run on the pound.”
Emily Thornberry (Islington South and Finsbury) (Lab)
Will the right hon. Gentleman give way?
Greg Clark
On that fateful day, in those dramatic circumstances, a Conservative-led Government did what history has regularly called on Conservatives to do and begin to pull the nation back from the brink of ruin after the disastrous denouement of a period of Labour Government. During the five years that followed, Britain’s prospects have been transformed, with the deficit cut by half, 1 million low earners taken out of income tax and spending on the NHS and schools safeguarded. More people are working than ever before in our history and Britain’s economy is the strongest growing in the western world. Thanks to the hard work and enterprise of the British people, our nation is on the rise again, but our task is far from complete. On 7 May this year, the British people looked at the past, looked to the future and asked us to finish the job. We are determined to repay their trust.
The Chancellor’s Budget puts our economic security first by cutting the deficit at the same pace as in the last Parliament until we have a surplus and ensuring that Britain pays its way in the world. It will help working people, support aspiration and boost productivity. It will reward work and allow people to keep more of the money they have earned. As the Chancellor said last week, the Budget is a new settlement for Britain.
Let me be frank: not every Budget goes according to plan. Some are cheered and others are jeered, such are the ups and downs of government, but it takes a special kind of genius to have an omnishambles Budget while in Opposition. I am sure that the whole House is eagerly awaiting the latest news from the hon. Member for Wolverhampton North East (Emma Reynolds) on whether the Opposition have a view on the Budget. Yesterday, the acting Leader of the Opposition announced that Labour would support the welfare cap and the restrictions on family tax credits, but within hours of her announcement three of the four leadership contenders—the right hon. Members for Normanton, Pontefract and Castleford (Yvette Cooper) and for Leigh (Andy Burnham) and the hon. Member for Islington North (Jeremy Corbyn)—denounced her and a policy that they had presumably agreed. We await the view of the hon. Member for Leicester West (Liz Kendall), but we have her representative on earth here—the hon. Member for Wolverhampton North East, who supports her campaign—and we want to find out whether the chaos is complete or partial. After the disarray of the last 24 hours, who could disagree with the hon. Member for Stoke-on-Trent Central (Tristram Hunt) when he said yesterday:
“The speed and rapidity with which we are beginning to be regarded as irrelevant…is really terrifying”?
We on the Government Benches have a settled view on the matters at hand. This afternoon, I will talk about two aspects of the Budget in particular: the opportunity that it offers to every part of the country to participate in our national success; and the imperative that it sets to move our economy to one of high productivity by addressing vital challenges, at the centre of which is building more homes.
Greg Clark
I will give way to the hon. Member for Middlesbrough (Andy McDonald)—the Member for my home town.
Andy McDonald (Middlesbrough) (Lab)
May I tell the Minister what is truly terrifying? It is his Government’s proposal to introduce a two-child policy that will punish the most vulnerable and the poorest in our society. That is the terrifying thing about this Budget.
Greg Clark
The hon. Gentleman can make that intervention in the parliamentary Labour party meeting later this afternoon, because I understand that that is the official Labour party policy.
Let me say a few words about devolution. As we recover from the recession and look to the future, it is clear that economic progress cannot come from London alone. One of the most striking achievements of the past five years is that the recovery has come from every part of our country. Businesses have created 2 million jobs over the past five years. Before 2010, only one in three jobs was created outside London and the south-east; now the figure is three in every five.
Where are exports growing fastest in the country? Is it in London? No, it is in the north-east, the home region of the hon. Member for Middlesbrough and myself. Where in England has the largest trade surplus? Is it London, or the south-east? No, it is the north-east again. Where is employment rising fastest? Is it in the south-east? No, it is in the north-west of England. For Britain to succeed, every part of the country must be firing on all cylinders.
That requires that we ask every city, town and county what they need to prosper. No two places are the same —Manchester cannot be confused with Margate, nor Newcastle with Newquay—so it should be obvious that a central plan for everywhere will end up working nowhere. For decades, however, that is exactly what central Government Departments tried to do; they prescribed blanket solutions for diverse local problems, which were enforced through unaccountable and expensive regional bureaucracies.
During the last Parliament, we made great strides towards reversing the failures of centralisation by devolving powers on planning, housing and economic growth. The Chancellor has already set out a bold vision for building the northern powerhouse, and this Budget will take us further.
Jonathan Ashworth (Leicester South) (Lab)
I know that the right hon. Gentleman is committed to devolving powers to the regions. However, in the last Parliament Conservative Ministers made a commitment to deliver the electrification of the midland main line. Why will the Government not get on with that, because it would be good for the east midlands economy?
Greg Clark
I share the hon. Gentleman’s view that that project is very important, and we are committed to it. However, to the regret of, I think, every Member, it has been necessary to pause it, to ensure that it can be done according to prudent budgetary principles. Nevertheless, the Transport Secretary has made it absolutely clear that such transport projects are very important for the hon. Gentleman’s constituency and others.
Mr Nigel Evans (Ribble Valley) (Con)
Did the Minister also welcome the news that BAE Systems announced last week that it wishes to take on 2,000 apprentices by 2018, which yet again reinforces the image of the northern powerhouse?
Greg Clark
My hon. Friend is absolutely right; that is marvellous news and a reflection of the confidence in the economy of the UK and of the north-west. It also underlines the point that that is happening not only in our country’s big cities, important though they are, but in all parts of the north and, indeed, all parts of the country.
The Chancellor made it clear in the Budget that we have reached agreement with the 10 councils in Greater Manchester to devolve additional powers to them, beyond those powers that were devolved previously. A land commission will help to release public land to build new homes; fire services will be put under the control of the new mayor; and new powers will encourage further collaboration on children’s services and employment programmes. This historic process of devolution is now available to other cities and other parts of the country. The Chancellor made it clear that we are in active negotiations to devolve powers to the Sheffield city region, to Leeds, west Yorkshire and its partner authorities, and to the Liverpool city region. Each area will receive far-reaching devolved powers and resources in return for the election of a directly elected mayor. We are also in advanced negotiations with Cornwall on the first devolution for a county in this country.
This is just the start. The Cities and Local Government Devolution Bill, which is before the House of Lords, will enable us to negotiate with cities, towns and counties right across the country to give them the power that they need to galvanise their local economies. Such deals are in their local interest, but also in the national interest. At a time when limited public resources must be invested wisely, it is right to offer our cities, towns and counties a bigger share of the funding that is available. Why? Partly, it is because they have already demonstrated that they can make funding go further by managing it more creatively and attracting private sector investment.
Mr James Gray (North Wiltshire) (Con)
I absolutely agree with my right hon. Friend about the importance of devolving power in the way that he describes. However, he will recall that it was a Conservative Government who abolished Avon, Humberside and Cleveland—those much-hated examples of regionalisation. Will he make a commitment today that, although devolution is a good thing, it will not become a substitute for regionalisation, and that if counties such as Wiltshire, for example, do not want it, we will not have to have it?
Greg Clark
I can give that reassurance to my hon. Friend. That is the essential difference between the programme of devolution that we are offering and what has been attempted in the past. Every proposal will come from local people. I do not have the power, still less the inclination, to force local people into any arrangements other than those for which they are enthusiastic.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Will the Secretary of State explain to me and the residents of Greater Manchester how the devolved £6 billion health and social care budget marries with the £7.1 billion that is currently spent in Greater Manchester? What will happen to the residents of Greater Manchester when that money runs out?
Greg Clark
The hon. Lady, who is a Greater Manchester Member of Parliament, should talk to her leaders in Greater Manchester who put the proposal to the Government. The proposal was not invented in Whitehall and visited upon Greater Manchester. The leaders of Greater Manchester made the very good point that when there is a strong connection between the needs of the national health service and the social care of residents across Greater Manchester, it makes complete sense for them to be managed together. That was their proposal and, in line with what my hon. Friend the Member for North Wiltshire (Mr Gray) said, we were very pleased to endorse it.
As I said, this is just the start. We want to build on the ingenuity and experience of local councils and civic and business leaders in an area to attract private investment to match the public investment. The city and local growth deals that we implemented in the last Parliament have transformed £7 billion of funds from central Government Departments into £21 billion of local investment. This Budget represents a golden opportunity for local leaders to repeat that success on a grander scale. Furthermore, with measures such as the creation of new enterprise zones, for which an invitation has gone out to places across the country, and the extension of the coastal communities fund, we are determined that this invitation should be extended to all parts of the country.
David Morris (Morecambe and Lunesdale) (Con)
Would my right hon. Friend look favourably on an enterprise zone application for Morecambe White Lund and on a coastal communities investment, because Morecambe needs more money on top of the £1 billion that was delivered by the previous Government? I am sure that, with the Secretary of State’s help, we can do better.
Greg Clark
I know from the last Parliament what a fighter my hon. Friend is for his area. I would welcome an application for Morecambe not just for an enterprise zone, but for the coastal communities fund—announcements were made on those two important policies in the Budget. I say to Members from all parts of the House that this is a big opportunity for them to work with the council and business leaders in their area to put forward a compelling bid for funds and, indeed, the devolution arrangements.
Sir Edward Leigh (Gainsborough) (Con)
The Secretary of State is a most cerebral Minister, so I wonder whether he can help with a problem that I am grappling with. One way in which the north has competed with the south in the past has been through lower wages. I am not saying that that is right, but how will the living wage impact on it? When employers increase wages, they normally do so as a result of an increase in productivity. If there is a living wage imposed by the state, how will we avoid increased unemployment or lower productivity —or both?
Greg Clark
I served my apprenticeship with my hon. Friend on the Public Accounts Committee, and partly as a result of the rigour that he imparted to the Committee’s members, I believe that the key to driving productivity is to invest in education and skills. One of the most important announcements in the Budget was the transformation of our apprenticeship system. There is a serious commitment on the Government’s part to ensure that all regions have the ability to invest in the skills that will drive productivity and justify the new wages.
In the proposals that places across the country have started to draft in response to my invitation to have more local arrangements, the common denominators are greater local involvement in skills and engagement with local employers. That is absolutely right, and I will back it in devolution deals.
Bridget Phillipson (Houghton and Sunderland South) (Lab)
I have listened carefully to what the Secretary of State has said about giving local people a say and not forcing areas to do things against their will. Why will the Government not devolve further powers to the north-east without a directly elected mayor, and why do they refuse to give local people a say on whether they even want a mayor in the first place? Will the Secretary of State listen to the north-east?
Greg Clark
I listen to the north-east all the time, and I have met its civic leaders in recent days and will no doubt have further conversations with them. I have always had a strong and fruitful dialogue with them. In fact, I have a letter from the leader of the hon. Lady’s own council, Sunderland City Council, who said: “The support you provided to Sunderland was crucial to us securing the deal which is so vital in helping boost the economy of our area. Your thorough understanding of the issues in our region should be commended and demonstrates this Government’s commitment to putting the north of England at the heart of its plans to strengthen the economy of the whole country.” I have good dialogue with city leaders across the country, and the hon. Lady should talk to them.
I am conscious that many hon. Members want to speak, so I will move on and say a word about housing. I am convinced that our communities will rise to the challenge of devolution, but I have made it clear to authorities across the country that in doing so, they must deliver the homes that their people need for this generation and the next. Much progress was made during the last Parliament, which began with the lowest level of peacetime house building since the 1920s and first-time buyers locked out of the housing market. Housing starts and the number of first-time buyers have doubled since 2009 and are continuing to rise. Last year alone, the number of first-time buyers rose by 20%, but we must go further. That is why the Government are committed to encouraging home ownership and building homes that people can afford to buy.
Tom Pursglove (Corby) (Con)
There is a real desire in Corby for a new enterprise zone, not least because of the success of enterprise zones in the original wave back in the 1980s. We are also seeing enormous housing growth. Does the Secretary of State agree that the areas that are taking that growth should be rewarded when it comes to jobs and infrastructure?
Greg Clark
I do agree, and I encourage my hon. Friend and his local business and civic leaders to make an application for an enterprise zone on behalf of his constituents. I am sure that that would further enhance the prosperity of the Northamptonshire economy.
Greg Clark
The hon. Lady has been very patient, so I will give way to her now.
Emily Thornberry
I am grateful to the Secretary of State for his generosity.
What would the Secretary of State say to the 19,000 families in Islington who are on the waiting list for social housing about how long they might need to wait to be rehoused?
Greg Clark
I would say to the people of Islington that they should be pleased that the highest rate of affordable house building took place in the last Parliament, and that we will increase that rate during this Parliament.
Mr Clive Betts (Sheffield South East) (Lab)
On that point, the Budget changed the future rental income forecast for social housing from the consumer prices index plus 2%, to minus 1%. The National Housing Federation said that that will reduce housing association revenue by £3.9 billion in this Parliament, and that a conservative estimate suggests a reduction of 27,000 homes being built because of measures in the Budget. How does the Secretary of State begin to justify that?
Greg Clark
The justification is clear: over the past three years the rate of increase in rents for social tenants was twice that of private tenants. Since 2012-13 the increase in social rents has been 9.1%, and 4.8% for private tenants. It seems not unreasonable to reset the baseline—if I can put it that way—to reflect the experience in the rental sector of people in the country. I would be interested to hear from the hon. Member for Wolverhampton North East whether the Labour party will share our enthusiasm for the cut in rent for social tenants of 1% a year, when it has been increasing above inflation. It is an important move.
We want to encourage home ownership and build homes that people can afford to buy. We are extending Help to Buy, which has already helped 100,000 people to buy their own home. In autumn we will introduce the new Help to Buy individual savings account, and we will give more than 1 million housing association tenants the right to buy. The Budget and the productivity plan that the Chancellor published on Friday will free up brownfield land for development, speed up the planning system, and deliver thousands of new homes for aspiring homeowners.
Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)
The Secretary of State mentions the great productivity plan, but what a damp squib that is. It fails to address the key fundamentals of productivity, whether lending to business, raising intermediate and higher intermediate skill levels that are a major drag on our productivity, or other facets. Surely we deserve better than the damp squib that was produced on Friday.
Greg Clark
I do not think that the hon. Gentleman has read the productivity plan. If he does he will find it a substantial document. That this early in the life of this Government there is a clear focus on ensuring that our country is equipped to prosper in the long term is a mark of the Government’s seriousness, and I am surprised that he disparages that.
Mr Mark Prisk (Hertford and Stortford) (Con)
The plan includes important planning reforms such as new transport hubs that many Conservative Members welcome, as well as new powers for the Mayor of London. There was, however, one glaring omission because there was nothing about permitted development rights, and many people are concerned about a policy that has helped to turn empty offices into family homes. When will the Government publish their policy on that?
Greg Clark
My hon. Friend, who made a distinguished contribution as housing Minister, is right. Permitted development rights are important to bring otherwise disused spaces, such as offices, into use for homes. He will not have long to wait before we announce the continuation of those arrangements.
Andrew Gwynne (Denton and Reddish) (Lab)
I am interested in the Secretary of State’s proposals to reform planning regulations, but will he look carefully at unintended consequences? We all want an increase in the number of homes being built, but we do not necessarily want to lose valuable employment land.
Greg Clark
The hon. Gentleman makes a reasonable point in a reasonable way. He is absolutely right, which is why article 4 directions are expressly available to local authorities to make sure that land is kept for a particular use where it is important to do so.
Some of the proposals will be contained in the housing Bill this autumn and the House will have the opportunity to debate them. The Bill will create a new register of brownfield land to help fast-track the construction of homes, with the principle of development being agreed on 90% of suitable sites by the end of this Parliament. In London, I am pleased that my hon. Friend the Mayor will create an additional 10 housing zones, all on brownfield land. Those additional zones will bring the total number in the capital to 20, which, combined with the 20 housing zones outside London and the eight shortlisted areas that we have agreed to work with, could deliver nearly 100,000 more homes.
Boris Johnson (Uxbridge and South Ruislip) (Con)
Will the Secretary of State give way?
Boris Johnson
I just want to thank the Secretary of State and the Minister for Housing and Planning for their work in helping us to deliver those housing zones, which are enabling London to build more homes than at any time since the 1980s and a record number of affordable homes. In fact, in the next few years we are on target to build more homes in London than at any time since the 1930s.
Greg Clark
My hon. Friend is right, and it is part of his record as Mayor of London of which he can be very proud. He and my hon. Friend the Minister met just before they came to the House to discuss the London Land Commission and further plans to build on the success that my hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) has enjoyed. It is vital that we make sure that the capital has homes for the next generation of Londoners, just as he has provided them for this generation.
Local plans have been another success story, as they have helped to drive progress on both the quantity and quality of new development. In the productivity plan, we said that we want to take steps to ensure that there are local plans in every community. We will also make it easier to build 200,000 starter homes on underused commercial land, which can then be offered to first-time buyers under the age of 40 with a 20% discount.
We will update legislation and guidance to ensure that neighbouring councils co-operate on local plans—something that the Communities and Local Government Committee has taken an interest in over the years. The Chair was hopeful that I might listen to the representations from the Committee during this Parliament. We have listened and we are reflecting some of its thoughts in the productivity plan. We want to make sure that planning decisions are made as quickly as they can be; that major infrastructure projects can include some new homes as part of their plan; and that smaller firms have quicker and simpler ways of establishing where and what they can build, particularly on land in the new brownfield registers.
We also want to ensure that our existing housing stock supports working people, which is why the reduction in social housing rents—to bring them in line with the increase that has taken place in private rents—is an important step forward.
Mark Pawsey (Rugby) (Con)
If I may bring the Secretary of State back to the importance of local plans, part of the problem has been that some local authorities have been slow in bringing forward their plans. I therefore support the Government’s moves to encourage local authorities to get their plans in place, because the Government will do the work if local authorities fail to do so.
Greg Clark
I am grateful for the support of my hon. Friend, who has contributed to the Select Committee’s deliberations. Local councils have now had plenty of time to get on with their plans. More than 80% have published a plan, so we are pushing at an open door.
The Budget and its accompanying documents make clear, in tangible form, our commitment to provide the land and a simplification of the planning system to allow the homes that are needed to be built.
Peter Dowd (Bootle) (Lab)
On the issue of brownfield sites, my constituency has areas that are heavily contaminated and need significant remediation. Can the Secretary of State advise local authorities and developers where they can get support for that remediation?
Greg Clark
One of the benefits of devolving some of the powers and funds to local authorities is that by combining investment in transport infrastructure, housing and commercial development it is possible to get private sector investment in some of those regeneration projects. The hon. Gentleman has a valid point and, in recognition of the issue, we are establishing a brownfield fund that will help with the remediation of some brownfield land.
We have important themes in the Budget. It is an opportunity for our country to be even bolder over the five years ahead than we have been in the past. I am pleased that the shadow Secretary of State is on record as being a moderniser in her party. She supports a leadership candidate who says that she wants to challenge her party to be bolder. I hope that she will take the opportunity to do that. A vigorous debate on these matters—on housing, on planning and on furthering the devolution agenda—is very much to be commended in this House. Reflecting ruefully on the past five years, I found that I had a fruitful dialogue with leaders of local government, not just with Conservative leaders, such as my hon. Friend the Member for Uxbridge and South Ruislip, but with Labour leaders across the country, too. However, I did not, and they did not, get the support from Labour’s Westminster politicians. I hope that will change this time.
The hon. Member for Stoke-on-Trent Central, again providing wise words, said that this needs to be a summer of hard truths. That is good advice to the hon. Lady and I hope she will be bold. As the former shadow housing spokesman and now shadow Secretary of State, if she is not going to be bold, who is? Will she support tenants who dream of owning their own home, or not? Will she support our plan to build 200,000 starter homes? Will she back our register of brownfield sites with automatic planning permission so that builders can get on with building and young people can get a home of their own? Will she back our plans to extend home ownership through Help to Buy, right to buy and the starter homes initiative, or will she sit it out, a would-be radical afraid to speak out lest she finds that her leader is an old Labour figure who takes fright at confronting the future?
Britain has come a long way in the past five years, a journey that has taken us from the brink of ruin to the fastest growing advanced economy in the world. Confidence has returned and living standards are rising. Local economies are prospering and house building is on the rise. Businesses are growing and more people are in work than ever before. This progress bears testament to the hard work and sacrifice of the British people. It is their economic recovery and their hard-fought gains will not be squandered. Having come this far, there will be no turning back to the age of irresponsibility that caused so much damage to our country. The Budget sets out a new settlement for Britain to keep our country on the straight path to economic security and prosperity. It will give cities, towns and counties across the country the power to make their own decisions and to galvanise their local economies; it will help local communities to build the homes they need; and it will ensure that social tenants benefit from a fair rent. It is a Budget for working people and for one nation, so that whoever you are and wherever you live, you can benefit from Britain’s progress. I commend it to the House.
Emma Reynolds (Wolverhampton North East) (Lab)
I welcome the opportunity to open the third day’s debate on the Budget on behalf of the official Opposition. I will focus my remarks on two of the most important long-term challenges that we face as a country: devolution and housing. First, however, I want to make a number of points about the Budget as a whole.
Last week, the Chancellor presented his Budget as a Budget for working people. Regrettably, the grim reality is that millions of hard-working families will be worse off as a result of this Budget. The Chancellor gave with one hand, but took away so much more with the other. Of course, we welcome action to tackle low pay. The minimum wage was, after all, a Labour policy and one of the proudest achievements of the previous Labour Government. We first introduced it in the face of fierce Tory opposition. More recently, we campaigned to increase it. Let us be clear about what the Chancellor has actually done. He has not introduced a national living wage; he has attempted to rebrand the national minimum wage. Admittedly he has increased it, but at the same time he has decimated tax credits, leaving 3.3 million families worse off and 500,000 families without any tax credits at all.
The independent Institute for Fiscal Studies says that the Chancellor’s claim that the increase in the minimum wage will compensate working people for the changes to tax credits is “arithmetically impossible”. For example, a working couple in full-time employment earning the minimum wage who have two children will earn £1,500 more, but will lose £2,200 as a result of the cuts to tax credits. Far from making work pay, the IFS says that the Government’s changes would
“reduce the incentive for the first earner in a family to enter work”.
In effect, what the Chancellor has done is introduce a work penalty.
As my hon. Friend the shadow Chancellor said last week, the Government are
“pulling the rug from beneath people’s feet while higher wages are not yet available.”—[Official Report, 9 July 2015; Vol. 598, c. 473.]
Young children in the families affected are likely to grow up to become poor adults, which is not only wrong and unfair, but will cost society more in the longer term. Yet again, this Government are hitting women the hardest, with women losing twice as much as men. Yet again, too, this Government are putting more of the burden of clearing the deficit on to the shoulders of young people. The Government seem absolutely determined to deepen and entrench the inequality in our country and the inequality between generations.
Emma Reynolds
Let me be absolutely clear. The Budget presented last week is regressive. It hits some of the poorest people in our country the hardest—people on lower incomes who are working hard and doing the right thing. We will vote against the Budget tomorrow, and that is why—because it is regressive and fails all the tests around productivity and all the big decisions on infrastructure that the Prime Minister and the Chancellor have been ducking for some years.
There were, however, some things in the Budget that we welcome. It seems that the Labour manifesto found its way into the Chancellor’s Red Box. I know the Chancellor likes to wear “high vis”, but I did not know he was into cross-dressing. From increasing the national minimum wage to abolishing permanent non-dom status and reducing tax relief for landlords, the Chancellor seems to be a late convert to Labour party policy. The overall test of the Budget, however, is whether it benefits working people and meets the long-term challenges facing our country. It is clear that working families up and down the country will be worse off, but let me now turn to the long-term challenges we face.
Richard Fuller (Bedford) (Con)
Will the hon. Lady confirm that even with the changes to working tax credits, they will still be higher as a proportion of gross domestic product at the end of this process than during any period of the Labour Government prior to 2004, and that at that stage there was no commitment to a national living wage?
Emma Reynolds
I say to those on the Government Benches that they are simply out of touch with the lives of working people up and down this country. Of course we want an economy in which people are highly paid and highly skilled, but the course towards such an economy has to be charted before the support is cut off.
Let us deal with the crucial issue of devolution. We urgently need to rebalance our economy to drive growth and prosperity in all parts of the country. We are one of the most centralised countries in Europe. London dominates our economy, and its growth surpasses that in all of our major cities, which is not the case in either Germany or France where other cities beyond Berlin and Paris are true engines of economic growth. I agree with what the Chancellor said last week—that we will not achieve a better settlement by pulling London down. We should be proud of the dynamism and success of our capital city—and long may it continue. We must, however, reverse the long tradition of British politicians of all parties and of civil servants who have hoarded power in Whitehall and failed to trust local government.
There is a huge political and economic imperative to devolve power as close as possible to local communities. As ever, the Chancellor’s Budget speech on devolution was heavy on rhetoric, but rather light on substance. This Government boast about bringing about a “northern powerhouse”, but their rhetoric rings hollow, given that no part of the country has faced bigger cuts to local authority budgets over the last five years than those in the north of England. Indeed, the shelving of the electrification of the Manchester to Leeds trans-Pennine railway means that the Government’s plans are closer to a power cut than a powerhouse. We need a settlement for every part of the north, but as one of my hon. Friends pointed out to the Secretary of State earlier, there was barely a mention of the north-east in the hour-long Budget statement or in the 123 pages of the Red Book.
Ahead of the Budget, we know that there were briefings about which deals would be announced, and we know that the Secretary of State did what some might call a frenetic round of local government speed-dating during the Local Government Association conference two weeks ago. We welcome, for instance, the extra powers that the Government are planning to devolve to Greater Manchester. We also welcome the progress that three combined authorities—Sheffield city region, Liverpool city region and Leeds, West Yorkshire and partner authorities—are making towards a devolution deal, and the progress that Cornwall is making. As a Wolverhampton MP, I particularly congratulate the leaders of the local authorities that are working so hard to create the West Midlands combined authority. We are proud of the fact that Labour leaders in local government are making the weather on devolution.
While we welcome that progress, we also believe that the Government should not impose a one-size-fits-all approach to devolution, and should stop putting obstacles in the way. In his first major speech after the election, the Chancellor said that he would not impose the mayoral model on anyone, but in the very same breath he said that he would not settle for anything less. Why are the Government running scared of letting local people decide, and when will they clarify exactly what different areas and combined authorities can expect to achieve from devolution if they do not opt for a mayor?
Robert Neill (Bromley and Chislehurst) (Con)
I know that the hon. Lady has a good memory. Does she recall regional spatial strategies? What were they but an imposed one-size-fits-all policy from above? Has she forgotten that so quickly?
Emma Reynolds
It seems from the details of the Government’s productivity plan, which were published on Friday, that the hon. Gentleman’s party is introducing a nationalised spatial strategy.
Our amendment to the Cities and Local Government Devolution Bill, which is being debated in the other place today, would ensure that areas that did not want a mayor would not get a second-class deal. A Labour amendment that was passed in the other place earlier this afternoon proposes the introduction of a “devolution by default” test for every new Bill that the Government introduce to Parliament. If the Government did not push down as much power as possible to local level, they would have to give and justify their reasons. I hope that they will agree to retain that new provision, because it will be a test of their commitment to devolution.
Andrew Gwynne
Like my hon. Friend, I strongly support the devolution of powers to Greater Manchester, but does she agree that not just devolution to the strategic city-wide level but devolution to the local level is crucial, given that many authorities in Greater Manchester are now struggling to deliver basic services?
Emma Reynolds
I could not agree more. When we were in office we devolved power to the Scottish Parliament and the Welsh Assembly, but I know from our colleagues in Scotland that they are very disappointed that there has not been much devolution from the Scottish Parliament downwards. As my hon. Friend says, if we are devolving to combined authorities, we need to ensure that there is real devolution to communities as well.
The Budget also reinforced the Government’s piecemeal approach to devolution. We are calling on them to deliver a more ambitious and comprehensive devolution agenda to every part of the country—to all our cities, towns and counties. Doing a small number of one-off deals is not a one nation approach.
This Secretary of State is certainly better liked than his predecessor—[Interruption.] I accept that it is not a particularly high bar. It remains to be seen, however, whether he will live up to the reputation that he is trying to forge for himself. We hope that he will fight the corner of local government, but we will judge him on the outcome of the comprehensive spending review in the autumn, on the settlement that he achieves for local government, particularly in areas of high need, and, crucially, on the impact that any settlement will have on the vital public services on which people rely. Local government areas where more children are in care, where there are more vulnerable elderly people and where the needs of the local population are more complex and difficult are the areas where the Government have made the deepest cuts in the last five years. Let me say this to the Secretary of State: he cannot champion local government if he is impoverishing it at the same time. Devolution must not be a smokescreen to bring local government to its knees.
Housing is the other long-term challenge with which I want to deal. In our first debate in this House since the election I said to the Secretary of State, when debating the Queen’s Speech, that tackling the housing crisis was a key test for him and his Government. He agreed; he said it was an “issue of huge importance” and that this Government would
“build more homes in every part of the country”—[Official Report, 10 June 2015; Vol. 596, c. 1231.]
He even invoked the spirit of Harold Macmillan, but last week the Chancellor delivered a Budget that contained no proposal to tackle the housing crisis. Worse still—[Interruption.] Conservative Members should listen. Worse still, the Office for Budget Responsibility confirmed that the Budget would lead to 14,000 fewer affordable homes being built, which is contrary to what the Secretary of State said today. His desire to emulate Harold Macmillan appears to have been rather short-lived. If he thought that private house builders would compensate for his Government’s policies, he was mistaken, because the OBR says that it does
“not expect private sector house-builders to offset this effect to any material degree.”
Then there was the Government’s so-called pay-to-stay measure. I was interested to read that the Prime Minister had reservations about these proposals because he was not sure of the wisdom of describing people earning £30,000 as high earners. Indeed, these proposals would mean that a couple working full-time on the living wage would be classified as high earners, with a combined income of just over £30,000 a year. We have not seen the details of these proposals yet, but that couple could have to pay, on average, an additional £3,600 a year according to the Government’s own figures. Those who secure a promotion or more hours could thus be hit by this measure.
Mr Betts
The details of this new measure are going to be interesting. Either we are going to have a cliff-edge where people suddenly start paying a lot more rent because they have earned a little more money, or we are going to have to bring in a taper system, which is another form of taxation. Does my hon. Friend agree that we will have a system whereby local authorities are in effect going to have to know the incomes of every single tenant so they can check when people go over this threshold? A massive bureaucracy will have to be created simply to implement this very small measure.
Emma Reynolds
Indeed, and the Government introduced a similar measure in the last Parliament, but the threshold was £60,000 a year. In their consultation on those changes, the Government said that putting the threshold below £60,000 a year would result in “perverse incentives” and a “disincentive to work”. Why have they suddenly changed their mind, and why was there no mention in the Red Book of the Government’s plan to extend the right to buy? Once again, it fell to the OBR to mention what the Government were not prepared to refer to. It warned that the policy risked adding £60 billion to public debt.
We welcome some measures—for example, the raising of the rent-a-room relief and the tackling of some of the over-generous tax reliefs for private landlords which help to squeeze out first-time buyers—but they are not going to end the housing crisis. Last week the Chancellor and the Business Secretary were busy announcing planning reforms, which unless I have missed something are the responsibility of the Secretary of State. While the Chancellor was plundering the Labour manifesto, the Business Secretary appears to have been pillaging Labour’s housing review. We welcome the following, given that these were our policies anyway: tougher measures to ensure that local areas have a local plan; strengthening the Government’s duty to co-operate; reform of compulsory purchase powers; and a new dispute mechanism for section 106 agreements. But these were only some elements of our Lyons housing review, which is a comprehensive plan to tackle the housing crisis—something that this Government are sorely lacking. Sadly, one thing the Government are not taking forward is Labour’s commitment to zero-carbon homes. Pulling the plug on this policy will damage the house building industry, cost jobs and investment and mean higher energy bills for consumers, and I am wondering how on earth they can justify it.
The Government’s wider proposals announced on Friday also raise a number of questions. We welcome plans to build homes on brownfield sites, but if the Government were serious about building on brownfield why did they withdraw five years ago some of the investment and neighbourhood renewal fund which helped towards the costs of remediating polluted land—a fund that we put in place in our time in government? If brownfield sites are to get automatic planning permission, how will the Government ensure that local communities continue to have a say, that there is sufficient infrastructure for the plans to be delivered, that the quality of new homes is guaranteed, and that section 106 agreements are applied to ensure that developers fulfil affordable homes obligations? Given that a move to a zoning system represents a significant change to the planning system, will the national planning policy framework have to be amended? Will it perhaps be more accurately renamed the “national planning system”? It seems curious that the Conservative party spent so much time and energy attacking Labour’s spatial strategies in the name of localism, yet now appears to be nationalising planning. I cannot keep up with the Secretary of State: is he trying to be Macmillan or Lenin? I know the Secretary of State has been on a political journey from the Social Democratic party to the Conservative party, but this journey is rather unbelievable.
Andrew Bridgen (North West Leicestershire) (Con)
Is it still Labour party policy to re-establish the regional development agency, which inflicted the regional spatial strategies on my constituents and many others?
Emma Reynolds
We support the local plans. It seemed that the Minister for Housing and Planning was not that bothered about them—I remember an interview he did with Inside Housing in which he said it was not that important whether local areas had local plans—but the Government seem to have done an about-turn on that as I received a nice letter from him today, spelling out how important the local plan process is.
We think it is important for local people to have a say over what goes on in their areas. We have big questions about the Government’s proposals, which we have only just seen and on which we would like more detail. How will the Government still ensure that local people have that say? How will they ensure that local infrastructure is delivered? And how will they ensure that affordable homes are also delivered on some of these sites? Those are serious questions, we would welcome answers to them and we would like to see more details of the proposals that the Government put forward on Friday.
We are facing the biggest housing crisis in a generation. In England, we are building only half the homes we need. I know we have heard from the Mayor of London—perhaps I should call him the hon. Member for Uxbridge and South Ruislip (Boris Johnson)—but in London we are building only one third of the homes we need. We have had the lowest level of home ownership for 30 years under a Government who claim to be a party of home ownership. The Government urgently need to get a grip of this problem. The result of their Budget will be £60 billion of public sector debt added because of their changes and 14,000 fewer affordable homes, according to the OBR. That is hardly a record worthy of Macmillan.
In conclusion, this should have been a Budget to support working people.
Emily Thornberry
What does my hon. Friend think of the fact that the housing benefit bill has gone up by 60% and that we are talking about working people here, 98% of whom are tenants in the private rented sector? We continue to have an unsustainable housing benefit bill because of the rise in private sector rents.
Emma Reynolds
My hon. Friend raises an important point. In this area, we spend a lot of government money—95%—on housing benefit, and only 5% on bricks and mortar and building affordable homes. That clearly is not a sustainable or wise use of public funds. The way to bring the housing benefit bill down is by tackling the underlying drivers of low pay and high housing costs, but this Government are tackling neither.
Rebecca Pow (Taunton Deane) (Con)
I was back in my constituency this week, where I had long talks with people from my local council. They told me that in just the past year 778 new council houses have been built. That is the highest number of council houses built since the mid-1990s and it is far more than were built under Labour—and 29% of them are affordable.
Emma Reynolds
It is wonderful that the hon. Lady has been visiting her constituency—I was in mine, too. Since the reforms of the housing revenue account were brought forward—the last Labour Government proposed them but, to be fair, they were carried on by this Government in the last Parliament—Labour councils have been outbuilding Tory councils quite considerably.
Boris Johnson
The reality is, as I am sure the hon. Lady would acknowledge, that the Conservative Government are now solving a crisis that was caused by Labour. Does she accept that when the Labour Government left office in 2010 there were a net 200,000 fewer affordable homes in this country than when they began?
Emma Reynolds
I will not take lectures from somebody who believes that 80% of market rent is affordable for people in London, or from somebody who calls in planning applications, such as the one for Mount Pleasant in the constituency of my hon. Friend the Member for Islington South and Finsbury (Emily Thornberry), to drive down, not up, the number of affordable homes. That is not what I call a good record on affordable homes.
Lilian Greenwood (Nottingham South) (Lab)
Having visited my constituency, my hon. Friend knows that one thing the local authorities are doing is investing in our social housing and ensuring that it is of a decent standard. Does she share the consternation of the chief executive of my local arm’s length management organisation, Nottingham City Homes, who notes that the reduction in social rents will lead to a reduction in investment and a failure to invest in the housing standards that tenants would like?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. As we have so many Members who wish to speak, we need short interventions.
Emma Reynolds
We will look at those proposals in detail. As for what my hon. Friend has just said, we need to ensure that social housing providers are in a position to build more homes. We want housing associations and councils to build more homes, as there is, I think we can all agree, an acute shortage of affordable housing in this country. We also need to ensure that housing associations have the funding mechanisms in place to continue to invest in their stock. One of the proudest achievements of the previous Labour Government was the decent homes programme. Those homes were refurbished some 10 to 15 years ago, and there is a continual process of investing in the existing stock.
In conclusion, this Budget should have been about supporting working people and those who want to get on, rather than about punishing hard work. It should have been about tackling the long-term challenges facing our country—the productivity challenge, the balance of payments deficit, the housing crisis, the devolution agenda and so much more. Instead, this is a Budget that will hit hard-working people on low incomes, families with children, women and young people. It is a Budget that the OBR says will result in fewer homes, not more. It is a Budget that was more about politics than economics. It is more about the short-term needs of one man whose real mission is to move next door and take over the keys to No.10, rather than the long-term needs of the country.
Robert Neill (Bromley and Chislehurst) (Con)
I normally regard my right hon. Friend the Secretary of State as one of the most generous-hearted men in politics. When I listened to the opening of his speech, I thought he was being a bit harsh on the Opposition, but having heard their reaction, I think he was, if anything, over-generous. When one of the more thoughtful Members of the shadow Cabinet is reduced to tripping out every stereotypical canard in the socialist book and attempts to take refuge in the same view that was adopted by the last Bourbon King of France, Charles X, who was wholly and genuinely convinced that the French revolution was a terrible aberration, and that people would wake up one day and realise that they had got it wrong and that the divine right of kings was the only answer, I realised the difficulty that any Blairite on the Labour Front Bench faces. If it is any help for the historians here, Charles X lasted three and a half years before he was got rid of. I shall be interested to see how long the next leader of the Labour party lasts.
I also felt genuinely sorry for the current leader of the Labour party. After trying to inject a modicum of realism in relation to benefits and welfare reform, she was entirely disavowed by her own party. It is rather sad when the official Opposition of this country take as their role model the ostrich. They expose their thinking parts to us and bury the realities in the sand, and the country deserves better.
Kwasi Kwarteng (Spelthorne) (Con)
Has my hon. Friend heard anything today about the Opposition’s current view on the welfare cap? Has he learned anything interesting about what their actual position is?
Robert Neill
Not at all. As there are probably something in the order of 230-plus different views, we could not cover them all in time. It is also rather remarkable that the Opposition have adopted an entirely different stance to elected mayors from that which I remember when I was the leader of the Conservative group on the London Assembly and facing the first ever elected mayor in this country—the first Mayor of London. I am glad to say that things have improved since then. As some may remember, the office of Mayor of London came into being as a result of legislation introduced by the Labour party. It comes back to the same trope. Why does the Labour party now regard any elected mayor as anathema? Because it was an idea of Tony Blair’s, and must therefore be cast into utter darkness.
I find it truly bizarre that a normally thoughtful party that wants to talk about devolution objects to the opportunity to take up city deal models with an elected mayor. The idea has not been forced upon Labour; it is Labour’s choice whether to have it or not. It was Labour that imposed more central control over local government, not just in planning, not just in terms of whether there could be a committee structure or not, not just in terms of whether a very strict and rigid standards regime was imposed, not just in terms of the comprehensive area assessment, not just in terms of planning policy, and not just in terms of financial policy and the cap. After all that, Labour had the gall to complain about an offer—take it or leave it—put forward by my right hon. Friend.
Emma Reynolds
I always enjoy debating with the hon. Gentleman. To clarify, we are not anti-mayor. We believe that local areas and local communities should have a say over whether they have a mayor or not. We are in favour of true localism, not imposing structures on people.
Robert Neill
That is useful and I regard it as a step forward. I hope the hon. Lady is able to remain in place after the leadership election. Let me explain why. With all respect to her, being on the campaign team of a Blairite in the Labour leadership election probably makes the prospects of the ostrich pretty good in terms of species survival, so I wish her well for the future.
The Labour party has ducked the real issue, which is that my right hon. Friend the Secretary of State and the Chancellor of the Exchequer have offered genuine devolution of power to local authorities. The issue is not so much about the badge on the top of the tin, although there is a good reason for a single focal point in city areas. It is hugely important to remember that we have offered that to Cornwall too, and we are starting to see the good work of city deals rolled out to the shire counties. That should be applauded. The ability to join up adult social care, one of the principal cost pressures on top tier authorities, with the health service should be applauded by everybody in the House, not greeted with the rather curmudgeonly response that has come from Opposition Members.
Jonathan Ashworth
The hon. Gentleman has moved on, but may I extend an invitation to him to come to Leicester where we have an elected mayor? The opponents of that are members of the Leicester Conservative association.
Robert Neill
I believe there is a Blairite in Leicester. It might be too difficult for me to go up there.
It is sad that the key issues are being missed. We ought to be prepared to work across the House on opportunities to improve the offer available to local government. Whether Opposition Members like it or not, a good deal of work was done under the coalition Government and more is being done now to hand power down to local communities. That is a good thing in itself. It must be right to give significant economic drivers—London and the other major cities—the power to raise revenue and invest it more for themselves. Could we go further? I think we should, but we should recognise this as a very important first start.
Robert Neill
I must be careful with the number of interventions I take, as other Members want to get in, but I shall give way to my hon. Friend.
Bill Wiggin
I am grateful to my hon. Friend. He referred to some excellent legislation introduced by the previous Government. There is no finer bit than the Localism Act 2011, but in Herefordshire we are seeing brakes put on the powers of local people by the local authority. Does he find that happening elsewhere?
Robert Neill
Sadly, it does happen. One of the disappointments I have had is, I am sorry to say, that local authorities have been slower than I would wish in putting in place up-to-date local plans. There is a good deal more movement on that than previously, and I hope that the political certainty we have since the general election will encourage local authorities to move forward on that. I hope we can do more to encourage the uptake of neighbourhood plans, which my right hon. Friend pioneered and which offer a chance to give granularity to local communities’ involvement.
We should look again at the sort of fiscal incentives we can offer local authorities to support growth. The new homes bonus is important, as is the ability of cities like Manchester to retain 100% of the uplift in business rates. Personally, I think we should aim by the end of this Parliament to make that the norm across the country, rather than the exception. Those are the things that we ought to be talking about, rather than re-running history.
We need to offer other incentives in the housing field. A great deal more needs to be done. There is an issue with skills in the construction sector. When I talk to people in the sector, they tell me that as well as the planning side, which we can tackle, we need the skilled trades—the carpenters and the bricklayers, the supply systems. The Government are tackling that through their apprenticeship schemes, and we need to push that forward with great rigour. We need to ensure that the planning system deals not only with housing issues, but with the need to supply aggregates and other materials that are critical to the building trade. I hope we all recognise that we should be ruthless in prioritising building on publicly owned land. Today we had—I congratulate my hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) on this—the first meeting of the London Land Commission, which is bringing forward something that has been mooted for a very long time.
I shall say one more thing about London. Devolution to other cities is welcome, but I hope that the Government do not think that means London has had enough devolution. I say that not only as a London MP but as joint chair, alongside the hon. Member for Croydon North (Mr Reed), of the all-party group on London. The truth is that London, as a major powerhouse, can and should have further fiscal devolution. I commend to hon. Members a thoughtful piece in today’s Financial Times by Professor Vernon Bogdanor, in which he writes that it is important that our major cities and powerhouses have devolved powers. I am very happy for them to have elected mayors, but the developer will ask not only “Have you got a mayor?” but “Can you give me a tax incentive? What breaks can you give to make it attractive?” I hope that we can build on that, too.
The Budget presents great opportunities for local government. Let me end by pressing one final reform upon my right hon. Friend the Secretary of State. We have done a great deal to boost the structural arrangements and we have started on the right track in relation to fiscal devolution. I hope that we can do more to encourage the supply of housing through the various initiatives I have suggested. The final thing we need to do is deliver infrastructure planning more effectively. One thing we could do is have a serious reform of compulsory purchase legislation, which is overdue, and which I have talked about before. It will be the work of a Parliament, but it is worth starting now. I think we could achieve cross-party consensus on that, because delivering the underpinning roads, rail and other infrastructure will speed the sustainable delivery of housing, which is critical.
My constituency was once represented by Harold Macmillan. I can tell hon. Members that he would have been very proud of my right hon. Friend the Secretary of State and of this Budget.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Before I call the Scottish National party spokesperson, I warn Members that a six-minute time limit will apply after this speech.
Alison Thewliss (Glasgow Central) (SNP)
It is a dubious honour to be called to speak in this Budget debate—not because I am not keen to speak on behalf of my party and my constituents, but because so many things about it still upset me deeply. I raised the issue last week, but I have yet to receive an answer on the provision set out at the top of page 88 of the Red Book. Specifically, what kind of system will the Department for Work and Pensions and Her Majesty’s Revenue and Customs introduce to ask women who have been raped to prove it in order to qualify for child tax credits? I still seek clarification on that appalling clause, and I hope that the Secretary of State will eventually be able to give it. I know how hard my constituents and people across these islands will be hit by the Budget. I stand here on behalf of my party to do my best to represent them and fight their corner today. I will speak first about the impact on communities, and then I will discuss investment and city deals.
The Secretary of State for Work and Pensions once claimed he could live on £53 a week. I am not clear whether he tried, but I know that more than 480,000 people signed a petition asking him to do so. As Members of this House, we are comfortably off. Even if we were suddenly to lose our jobs, as so many hon. Members’ colleagues in Scotland did in May, I suspect that none of us would starve. That is not the daily reality of life for many people across the United Kingdom today. Even when people are in employment, they do not earn enough to live more than hand to mouth. We in this House do not have the right to pull up the ladder and leave them behind. Let us be in no doubt—this is not because our lowest-paid do not work hard enough. Many work extraordinarily hard for long hours doing difficult, dirty and dangerous work. They need our support and they need our respect. Most of all, they need fair pay— a real living wage, not some hastily badged imitation—and access to Government support mechanisms such as tax credits to help them live with dignity. This Government should apologise to the Living Wage Foundation for stealing the campaign it has worked so hard to build.
I was glad to hear of the shadow Secretary of State’s conversion, because an Opposition who oppose opposing are no good at all. I urge all Labour Members to remember the toil of many people in our country struggling to make ends meet when they consider backing the Tories’ Budget. Those people elected Labour Members to stand up for them, not for the Secretary of State.
This Tory Budget has been assessed by groups such as the Fawcett Society as being disproportionately hard on women. The Fawcett Society considers that this Budget gives with one hand and takes away with two, stating:
“Women are going to be pushed further into a poverty trap following a Budget that offers little to help them increase their income…We fear that many more will find themselves in a low benefit, low wage situation that is increasingly difficult to escape.”
The House of Commons Library says that, since 2010, 85% of the £26 billion-worth of cuts made to benefits, tax credits, pay and pensions has been taken from women’s incomes. That is unacceptable. I ask all feminists in this House to consider it very carefully.
The communities I know best are resilient. They look out for one another and make sure their neighbours are okay. They collect for food banks. They donate what little they have to ensure that their vulnerable neighbours are looked after. The sharp increase in food banks in this country is a stark example of a community response to crisis. Visits to food banks increased from 25,899 in 2008-09 to 1,084,604 in 2014-15, according to the Trussell Trust’s figures. This speaks to a crisis in our policies in this nation and a very human response by ordinary people to that crisis. We should not have a requirement for food banks in a wealthy nation such as ours. Being ahead in our GDP and our status is not important when people are starving.
What shocks me most is the role of our social security system in forcing people to use food banks. The Trussell Trust’s figures show that just shy of 30% of people are using food banks because of benefit delays: families cannot feed themselves because of an administrative problem. That is absolutely unacceptable and shameful. Twenty-two per cent. of people use food banks due to low income. These people have jobs, but because of their pay and the uncertainty around zero-hours contracts they do not earn enough to eat. This is not right. We must act and not accept the Tory narrative, shake our heads, and throw up our hands.
The benefits statistics from advice agencies such as the citizens advice bureaux show further evidence of an unfair system that exacerbates the poverty in our communities. In the category of benefits, tax credits and national insurance advice, one single citizens advice bureau in the Bridgeton area of my constituency saw an increase in its caseload from 4,092 in 2011-12 to 7,266 in 2014-15. Its evidence shows that delays are built into the social security system at every stage, through application, mandatory reconsideration, and appeals. When people are supported by agencies such as the CAB, they are far more likely to be successful in those appeals. That clearly speaks to a system that is off-putting and difficult to navigate; it is not people-friendly. On Friday I learned of a person who waited over a year for his personal independence payment case to be processed—a whole year, for someone who needed support more than most. Who picks up the pieces? Neighbours, friends, churches, and community organisations filled the gaps when this Government forced citizens to the brink. The Government’s Budget undermines people’s sense of community and puts unsustainable strain on the vital services so many rely on.
I have seen the impact of cuts to local government over the past few years. During that time, the Scottish Government have done their utmost to protect local government from the worst of the cuts it has faced, but decisions have already resulted in significant detriment to services. Cuts were made to the flesh, with efficiency savings, reductions in office costs, and the need to work smarter. Cuts were then made to the muscle—to the staff—
David Rutley (Macclesfield) (Con)
I am listening to the hon. Lady with interest. Does she believe that there is any room at all for reform of the benefits system or the welfare approach to encourage more people to get into work, or support them into work, or is everything perfect in Scotland?
Alison Thewliss
When the powers this Government have force people into poverty and do not help to support them at their time of need, I say that that is a crisis and that we are hamstrung in our ability to help people. This Government expect the Scottish Government to mitigate the worst of their policies, but we should not exist to do so. Give us the powers, and we will do what we can.
Cuts have now come to the bone. Service provision has been removed, including things that make no logical sense to cut because such low-level interventions save money down the line. Sheltered housing services, which keep the elderly active, and services such as the Glasgow Association for Mental Health, which prevents those with mental health problems from slipping into crisis, have had their funding removed. This makes no sense: we can spend to save by investing at a certain level, but the cuts now mean that local government has to make such choices.
I do not know what the full impact will be of cuts that are starting to amputate huge chunks of our local bodies, but I very much worry that they will threaten the life of the patient. Local government serves both a social and an economic purpose, and the shrinking of public services takes well-paid and useful jobs out of areas and damages small business. In the past few days, the Local Government Association analysis has suggested that a £3.3 billion cut in 2016-17, or some 12%, will mean potentially devastating choices in many areas. These are not arbitrary cuts or figures on a balance sheet; they affect lives.
The proposed housing changes will have a significant impact. In Scotland, we take the attitude that a house is a home. That does not vary depending on whether someone’s house is a bought house or a rented one. I know from my case load that a social rented home in Glasgow is very desirable indeed. The huge numbers on housing waiting lists highlighted by organisations such as Shelter certainly seem to bear that out.
A lot of what has been said in the Budget seems to assume that markets will take care of the housing crisis in this country, but I would turn that contention on its head. The commercial rental market has driven up rents to the point at which people on average or even generous wages cannot afford to live, particularly in this city.
Richard Fuller
The acting leader of the official Opposition has said that their goal is not to oppose just for the sake of doing so. The hon. Lady has not mentioned anything in the Budget with which she agrees. Does she disagree with the acting leader of the Opposition?
Alison Thewliss
The hon. Gentleman will find that the Scottish National party takes its own stance on many issues and does not follow the Labour party.
The problem with market rents is not, as the Red Book implies at paragraph 1.154, with social rents. I believe that, by and large, council and housing association rents are fair, not subsidised. I was glad that the shadow Secretary of State mentioned the proposed pay-to-stay policy, and I agree with a lot of what she said on that. The policy will drive people out of the communities they call home, push out key workers on modest salaries and all but ghettoise swathes of our towns and cities. The proposals are unfair in that local authorities will not see the benefit of the policy, because their share from increased rents will go back to the Exchequer, while local housing associations get to keep the funds. If the Government insist on pursuing this daft policy, they should at least give an even playing field to all housing providers to allow them to invest in new housing.
I note that there is a proposal to end so-called lifetime tenancies. Long tenancies can contribute positively to the fabric of our communities by ensuring that people stay and make their lives in an area and that they belong to it. They are part of what makes renting with a housing association or a local council attractive, as opposed to the uncertainty of the private sector, where people have to move all the time.
Andrew Bridgen
The hon. Lady is making her case, but is there anything in the Budget with which she agrees? Does she support the new national living wage and the cut in rents for housing association tenants?
Alison Thewliss
I have made it abundantly clear that it is not a living wage; it is a rebadging of the national minimum wage, and it is not good enough. [Interruption.] Would Government Members give me a break?
Long tenancies give a degree of certainty and reduce costs to housing providers, who know that a tenant is there for the long term and do not constantly have to manage the turnover of stock. That is costly for housing associations and local councils to manage, so knowing that a tenant will stay reduces their costs. The Government should think very carefully about this policy’s impact on well-established and strong communities.
This Government seem to be making a further attack on the social rented sector and its tenants, following the distress caused by the bedroom tax. The Joseph Rowntree Foundation has found that only 6% of affected tenants were actually able to move, and that 50% of those who did not move fell into arrears. I am glad that the Scottish Government were able to mitigate that, but it is another example of a policy built to deal with a London problem that did not exist in Scotland, and which simply punishes people for their circumstances. The Scottish Government should not exist simply to mitigate the policies of another Government. That is unfair and unsustainable.
The Government are also in real danger of undermining their own work on city deals. One of the intended outcomes of the Glasgow and Clyde Valley city deal is to help long-term unemployed people back to work, and if the actions of this Tory Government undermine that by slashing benefits and making life harder for people who are looking to work, that will undermine the potential success of the deal. We must co-ordinate and work together. We need job-creating powers in Scotland and more than the simple power to mitigate the wrongheaded approach of this Government.
Although I say that, the hon. Members for North West Leicestershire (Andrew Bridgen) and for Bedford (Richard Fuller) will be glad to find that I welcome the further development of city deals in the Budget. They will go some way to redressing the imbalance in the UK economy, and not before time. Looking at the rhetoric about the northern powerhouse, I would suggest that it is perhaps a final admission of the fundamental failure of the UK economy. London is indeed the giant suction machine that the former Business Secretary spoke of, and the map on page 67 illustrates that investment in the south and east of England is focused through the prism of how best to serve London rather than to build up those areas in their own right and advance the economy.
I have attended Adjournment and Westminster Hall debates on city deals for Aberdeen and Cardiff and I listened with great interest to the debate on elected mayors. I have also followed discussions on the Cities and Local Government Devolution Bill in the other place. I am keen to see the development of deals that meet local needs and have been disappointed in some of those debates to find that the wishes of local people seemed to rank behind the pet project of some local authorities and the requirements of business. If more powers come to cities, it should be to serve the ambitions and priorities of local people to raise their opportunities in life and to make things better according to local demands. They must also be the devolution of funding to match those powers, as devolution and the reform of local government cannot be a cover for passing on cuts.
I am of course delighted to see continued commitment to the city deal for Glasgow and Clyde Valley, which the UK Government established in partnership with the Scottish Government, each putting in £500 million, with £130 million coming from the eight local authorities involved. I hope, too, that the deal will involve listening to local people. It is early days and the work of the joint board is just getting under way. I commend the fledgling city deals for Aberdeen and Inverness, which are mentioned in the Red Book, and ask that attention be paid to potential deals in Scotland’s other cities.
In considering city deals, we must also consider how we support areas outwith large conurbations. Rural areas should not be left behind, and if they are it will only exacerbate the difficulties of rurality. The approach in Scotland has been about collaboration through the Scottish Cities Alliance rather than cutthroat competition, and I believe that that is more productive. Setting regions against one another and failing to seize the opportunities to make links will only waste money in the long run. I note with interest that an Oyster-type system is being considered for Manchester. That is of course welcome, but it should not operate in a way that builds barriers between different regions. There is much opportunity for interoperability rather than running in entirely different directions and I note with some concern the comments made by the hon. Member for Bromley and Chislehurst (Robert Neill) about incentives for businesses. If we are not careful, that could lead to a race to the bottom on standards in different areas.
I would also guard against the temptation to reach for shiny prestige projects at the expense of more sustainable projects that benefit local communities and urge that further attention is paid to the importance of community benefit policies within public contracts. They were used effectively in Glasgow during the Commonwealth games and on other projects and are a simple way to ensure that local people get jobs, training and investment in every large or small infrastructure project that comes along.
A Westminster Hall debate last week touched on the fact that elected mayors had been rejected in some areas in local referendums. It would seem to me to be unwise to overrule that democratic right, but the Under-Secretary of State for Communities and Local Government, the hon. Member for Nuneaton (Mr Jones), said:
“I reiterate that where there is a request for the ambitious devolution of a suite of powers to a combined authority, there must be a metro mayor, but no city will be forced to take on those powers or to have a metro mayor, just as no county will be forced to make any governance changes.”—[Official Report, 9 July 2015; Vol. 598, c. 187WH.]
That seems to make no sense and to disrespect local democracy. People can have the funding, but only if they have the mayor. If people do not want a local mayor and think that the power is better vested in their local authority and local democracy, the Government should respect that. Members might also like to note that there is no such obligation for the Glasgow and Clyde Valley plan to come with an elected mayor.
Robert Neill
The hon. Lady is making an interesting point, but if she trusts local authorities in that regard it is legitimate to trust them to vary certain levels of taxation within an area and to increase their prudential borrowing against a revenue stream. Would she support us on such measures?
Alison Thewliss
Having come from local government, of course I trust it to do those things, but it should not be forced with a gun put to its head.
I will close by asking the Secretary of State to reflect on the purposes of power being devolved, and on how best we support local communities. People will be unsurprised that we in the SNP reject the austerity agenda, and the people who voted for us support our policy. That austerity agenda has already led to so much damage to the fabric of our communities, and there is only so much that people can take.
Mr Deputy Speaker
Order. I remind Members that there is a six-minute limit on speeches.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
Thank you, Mr Deputy Speaker, for calling me to speak. It is a pleasure to serve under you for the first time in this Parliament.
This Budget debate is on local growth. It is a real delight to be able to continue to speak up for my Plymouth, Sutton and Devonport constituency as its MP after a hard-fought campaign. I am also delighted that my hon. Friend the Member for Plymouth, Moor View (Johnny Mercer) won the neighbouring seat and that he will join me in speaking up for Plymouth in this House. He, my hon. Friend the Member for South West Devon (Mr Streeter) and I will be a formidable force, speaking up for our great city.
Plymouth has a global reputation for marine science engineering research. Yesterday, I was delighted to be able to go to St Andrew’s church to commemorate sea Sunday, which is an incredibly important part of our heritage.
Plymouth is a significant home for the Royal Navy. It includes Devonport dockyard, which is the base for the refitting and refuelling of the UK’s nuclear submarine fleet, and the deep maintenance of our surface ships. It is also home to 3 Commando Brigade at Stonehouse; Royal Marines Tamar, which hosts the amphibious capability and the Royal Marines; HMS Drake, which base ports seven Type-23s; HMS Ocean; HMS Bulwark, which I was on last Thursday to welcome the crew back from their activities in the Mediterranean and dealing with Ebola; HMS Albion; and HMS Protector, which is the Antarctic survey ship. In addition, 29 Commando Regiment Royal Artillery is based at the Royal Citadel, in which both my hon. and gallant Friends the Members for Plymouth, Moor View and for Filton and Bradley Stoke (Jack Lopresti) served before going out to Afghanistan to support our country.
Although the Royal Navy’s presence is the cornerstone for Plymouth’s global reputation, we are also delighted to host the national aquarium, Plymouth Marine Laboratory, the Marine Biological Association and, of course, Plymouth University, as well as Princess Yachts, all of which are key economic drivers and deliver not only growth but employment.
Before the election, the Government released land in the dockyard as part of the city deal, to create a maritime industrial production campus that will create at least 1,800 new jobs. I pay special tribute to my right hon. Friend the Secretary of State, who has worked so hard to make sure that we deliver that city deal. That has been a major assurance. In the March Budget, the Chancellor announced that this land would be given enterprise zone status subject to an acceptable business case being made. I hope my right hon. Friend the Secretary of State will tell us what progress is being made and that he has received the information required to press on with this project, which will deliver the city deal much quicker than might otherwise be the case.
As my right hon. Friend knows, Plymouth is a low-wage, low-skills economy. Some 38% of the people who work in the city are employed in the public sector. I understand that those public sector employees receive a 13% premium over their private sector equivalents. In the run-up to the 2010 election, Plymouth was considered to be one of the most vulnerable places and it was thought that the reductions in public expenditure would result in significant increases in unemployment. I thank my right hon. Friend the Secretary of State for Work and Pensions for ensuring that that situation was handled in a sensitive manner, which has resulted in a 42% reduction in the claimant count over the last five years.
I remain fully committed to making sure that we rebalance the Plymouth economy and that we never again find ourselves facing such a threat. Key to that is ensuring that we have more apprenticeships. We need more apprenticeships on top of the 5,000 that the coalition Government created, and the largest urban conurbation west of Bristol also requires better transport links to and from the rest of the country. The situation in February 2014—whereby storms led to us losing our railway line at Dawlish and being cut off—must never be allowed to happen again.
I therefore very much welcome the Government’s commitment to invest £7 billion in the south-west’s transport infrastructure, including in the dualling of the A303 and the A358. Unfortunately, the Labour party said in the course of the general election that it would not dual the A358. I found that disappointing and it demonstrated what that party is about. Progress is being made on improving our railway network. I would be most grateful if my right hon. Friend the Secretary of State for Transport made a statement to the House in the near future on the progress that is being made to ensure that our economy can flourish. It is only through investment in skills, training and transport infrastructure that we can deliver our promises and continue to rebalance our economy.
Finally, I remind SNP Members that the Conservatives now have more than 50 Members of Parliament in the south-west. They might like to note that we are on the Chancellor’s side, whereas they are interested in opposing his policies. That is why we need a Conservative Government who continue to deliver for the south-west and to deliver growth.
Mr Pat McFadden (Wolverhampton South East) (Lab)
Budgets, perhaps more than anywhere else, are where rhetoric meets policy. Rhetoric is an inescapable part of politics, but Budgets are the hard end of policy, where we decide our tax rates and revenues, decide on the benefit position and hear about the national accounts. I will spend the few minutes allocated to me discussing those two sides of the Budget.
First, when the Conservatives were elected in 2010 as the lead partner in the coalition, they pledged to get rid of the deficit in five years. We fought that election on a pledge to halve the deficit in five years. That policy was derided as the height of fiscal irresponsibility, but what the Chancellor announced in his Budget last week was that the Government had halved the deficit over one Parliament. They followed the Darling plan, rather than the Osborne plan when it came to the reality of deficit reduction in the last Parliament. They claimed success for their deficit reduction plan, but it was so successful that it now requires austerity for two Parliaments, rather than one.
Secondly, there is a clash between rhetoric and policy in respect of the next five years. The Conservatives fought the election just a couple of months ago on what the Office for Budget Responsibility described as a “rollercoaster” pattern of public expenditure cuts, with the deficit to be eliminated in 2018-19. Yet last week it was announced that the rollercoaster had been ditched, deficit elimination was to be put back a further year and there would be a smoother path of deficit reduction. Again, that is much closer to the plan on which Labour fought the election.
The third area is the mixture between taxes and cuts. The Conservatives fought the election saying that there was no need for tax increases at all and that the deficit would be dealt with entirely by expenditure cuts. Yet this Budget has been audited independently and it will result in a net increase in taxation of £6 billion a year—exactly the kind of plan that they would have denounced at the election.
Mr Robin Walker (Worcester) (Con)
Does the right hon. Gentleman not welcome the fact that the Budget closes tax loopholes and helps to make our tax system fairer? Surely that is something that we can unite across the House in supporting.
Mr McFadden
I do welcome parts of the Budget, but I do not welcome a party fighting an election on a platform of denouncing one set of policies and then adopting them right after the election.
To continue with my list, the Chancellor’s most blatant example of shopping around was lifting wholesale the plan to deal with the tax status of non-doms—something that was never mentioned by the Conservative party until we raised it in the election campaign. Fifthly, we fought the election on a plan for a staged increase in the national minimum wage over this Parliament—another policy that has been adopted by the Conservative party.
There are parts of the Budget that I welcome, particularly those that the Conservative party roundly denounced when they were being voiced by someone else before the election. However, it is not all agreement, because we have to consider the Budget in the round rather than just individual measures that we agree with. We cannot agree with a Budget that has been denounced as regressive because it attacks the incomes of the working poor, leading 3 million families to lose £1,000 a year. That will cause real hardship for families in my constituency and in many others like it. We cannot agree with priorities such as increasing the inheritance tax threshold for people who already have assets, while at the same time abolishing student grants, which are targeted at low-income families, making it harder for young people to pursue higher education and gain the opportunities that they deserve.
We also have to question the abolition of housing benefit for people under 21. I recently met the YMCA in Wolverhampton, and many similar charities deal with the most vulnerable young people. How will the Government ensure that those young people are not forced into destitution, and that the work of such excellent charities is not destroyed by the change?
Overall, the Budget is regressive. It is not just a march on to Labour territory, as we have read in recent weeks, but a plan that will attack the working poor and hurt incentives to work rather than increasing them. As we have heard, being in opposition is not just about blanket opposition. Shouting “Fight the cuts” is not enough. If we did not learn that over the past five years, we should certainly learn it now. Our attitude to the Budget should be to welcome the parts of it that are stolen from us and that we can agree with, but to oppose firmly the parts of it that are not in the interests of the country and our constituents.
Looking forward, the next few years will not just be about the fiscal path. They will be about equipping young people for the future, because too many of them are denied opportunities; about making sure that an economic recovery can be shared by every part of the country, not just based on a property-fuelled boom in one part of the country; and about our place in the world. On all those issues, we will be a sensible Opposition. We will not abandon the ground that we hold because the Conservative party walks on to it, but we will stick up for what we believe in and oppose firmly and with determination where it is deserved.
Anne Marie Morris (Newton Abbot) (Con)
The Prime Minister has a vision—a vision of one nation—but recognises that it must be built from the bottom up. I applaud the view that devolution is the way forward, and I very much look forward to the creation of the south-west powerhouse.
Oliver Colvile
Does my hon. Friend agree that if Cornwall is to be given devolution, it should have to work with all of us in the south-west?
Anne Marie Morris
I have no doubt that it will.
Before the election, the Government set out a six-point plan for the south-west. They said that we needed to increase the long-term growth rate; sustain job creation and create 150,000 more jobs by 2020; transform connectivity, by which they meant transport and broadband; support the region’s key industries, defence and high technology; boost science and promote skills; and support tourism. That was a great agenda, but let us see how it has been delivered on.
The Government have a good record so far, and the measures in the Budget show a degree of promise. On growth, as my hon. Friend mentions, there is the prospect of devolution in Cornwall, and I am absolutely convinced that Devon and Somerset will be looking at exactly the same thing. We have a number of key enterprise zones—Plymouth has been a great success story, and my local enterprise partnership, the Heart of the South West LEP, had an incredible settlement under the local growth fund. We get £103 million in 2014, one of the top 10 awards, and £65 million in 2015, the top award. That is great news.
On job creation, the south Devon link road will produce 7,960 jobs, and the growth deal will deliver 13,000. The city deal in Plymouth will deliver 9,000 jobs, which is great. Unemployment has fallen. In the south-west in 2010 it stood at 83,769; in 2015 it is 38,410. There is the same good story for youth unemployment. In 2010 it was 22,525 in the south-west, and in 2015 it is 8,250. That is a great result.
On connectivity, rail is dear to my heart and the railway line at Dawlish has been preserved, and will be preserved for the future—good on the Government! They have also promised £4 billion on electrification and more frequent trains at 140 mph. There is a new stations fund of £20 million, which is definitely good news and—best of all—we look forward to a dedicated south-west rail franchise. Great!
On the roads, the story has also been good, and as has been mentioned, £7.2 billion has been spent on a number of projects such as the A30, A303, M5—the list goes on. We now have the road fund that was created from the excise duty changes. That will enable Devon, which has more roads than Denmark, to move forward and get some of those potholes filled. Pinch point funding has been increased by £3.5 million for local congestion. Newton Abbot welcomes that, and would love a chunk of it.
On broadband, yes there have been challenges but we got £32 million in phase 1 and £22.75 million in phase 2. Some of the highest settlements in the country were for Devon and Somerset—bring it on! Broadband Delivery UK is considering providing an extra £25 million, and in the Budget we were promised an extra £10 million for ultrafast broadband. Does that not sound great for those of us who live in those areas and are rather cut off? Mobile 4G connectivity is also promised, which is fantastic compared with the Labour promise of 2 megabits per second. We are doing very well. I will not say that there have been no problems, but the Government have taken some good steps forward and we will keep pushing them.
On industry, defence is key for Plymouth—as my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) said—and with a 2% promise of GDP spend we are moving in the right direction. On high tech, we have Hinkley Point C nuclear power station, and South Yard in Plymouth has been redeveloped to improve marine businesses and advanced manufacturing. On science and skills, £23 million has been put aside for new digital economy centres, and Bath will be one of them. GCHQ has already recruited 150,000 new cyber-specialists, and 200,000 more are promised. We also have science parks: Exeter, Plymouth, Bridgwater—fantastic! Better still, there will be a network of national colleges to look at the skills gap, and I am pleased that some of that will be in the south-west. For tourism, the jewel in our crown, there will be an additional £90 million for the coastal communities fund, and we in the south-west will benefit from £10 million of that. I have already benefited in Teignmouth with my Carlton theatre—good on the Government!
In general, the Government have done a first-class job, but more could be done and I am sure that they will be listening to my request, alongside those of the other 50 south-west MPs. We have a challenge with underfunding. The Education Secretary recognised that and last year gave us an extra £16 million, but health and social care is a challenge. The south-west is a wonderful place to live. Lots of people come and retire there, and many are rather elderly and the costs are significant. I urge the Minister and his colleagues in the Departments for Education and of Health to consider reviewing the formula so that we get a fair share and can properly support individuals who live in our beautiful south-west.
This is a great Budget and I commend it to the House. It is excellent for local growth in the south-west.
Andrew Gwynne
On a point of order, Mr Deputy Speaker. I inform the House that today I have been contacted by a police officer from Greater Manchester police regarding correspondence between me and some of my constituents about Audenshaw school in my constituency. It is not my intention to release the information requested by the police because I consider letters between constituents and me as a Member of Parliament to be confidential unless I am instructed to release them by a court. May I place that on the record and ask you, Mr Deputy Speaker, whether that is also your understanding?
Mr Deputy Speaker (Mr Lindsay Hoyle)
The hon. Gentleman is correct in what he has said, and whether or not to release those letters is a decision that he must take, based on the information that he holds. The point is certainly on the record because we are all aware of it and people will read about it tomorrow.
Mr Iain Wright (Hartlepool) (Lab)
Productivity is the pressing economic challenge of this Parliament. Unless the country addresses productivity, especially the widening gap in output per hour between ourselves and our main competitors, wage levels and living standards will not rise, and our competitiveness and position as a leading economic nation will be severely under threat. It is welcome that the Chancellor himself has now acknowledged the issue. In his Mansion House speech on 10 June he said:
“Britain must address its poor productivity.
We don’t export enough; we don’t train enough; we don’t save enough; we don’t invest enough; we don’t manufacture enough; we certainly don’t build enough, and far too much of the economic activity in our nation is concentrated here in the centre of London.”
I hope to address all those points in my speech, and ask how the Budget will address them.
Today is the first day in debate on the Budget that the House is able to consider the Government’s productivity plan, which was published on Friday. It is curious that the plan was not published alongside other documents at the time of the Budget statement, as is the norm. That suggests either that the Government fancied another hit in the 24-hour news cycle 48 hours after the Budget or that the productivity plan was not ready for publication on Budget day, and that Whitehall was trawled in a desperate attempt to scrabble together some half-baked measures in order to publish something—anything—in the immediate aftermath of the Budget. Indeed, the plan is littered far too much with phrases such as “will be published shortly”, or
“the government will set out more details of these reforms in the autumn.”
That suggests that the productivity plan has not been thought through as much as the Government would have liked.
On the question of exporting enough, it is a huge concern that there was nothing in the Budget to help to increase the number of firms exporting, or to address the persistent structural trade deficit. The Red Book shows that that is getting worse: in 2014, exports grew by 0.5% but imports grew by 2.4%. The Office for Budget Responsibility forecast that net trade this year is going to be more of a drag on GDP growth than it predicted even in the March Budget. The Red Book predicts a widening gulf between growth in world trade and growth in UK exports in every year of this Parliament. This country is not taking advantage of the growing opportunities throughout the world, and the Government should be helping to address that.
The productivity plan states:
“The government will remodel its delivery on trade, exports, investment and prosperity”,
but it does not give much else in the way of explanation. I hope that the Business, Innovation and Skills Committee can play a role in helping to shape that aim to ensure the Government meet their targets of £1 trillion by 2020 and 100,000 more companies exporting—an important aim that I am very keen to see the Government achieve, but I fear that it is looking increasingly unlikely.
Mr McFadden
While my hon. Friend is on the subject of exports, can he tell us how he thinks withdrawal from the European Union would help our export drive?
Mr Wright
I pay tribute to my right hon. Friend who speaks eloquently on these matters. With regard to our largest trading partner, I certainly think that withdrawal would not be conducive to hitting our export targets. I hope that the Select Committee will look at the costs and benefits to British businesses of EU membership, which will be important in the run-up to any referendum.
On the matter of there being enough training, the apprenticeship levy is a welcome step, although businesses, training providers and learners need more clarity. The Red Book says that the levy will support all post-16 apprenticeships in England and that
“firms that are committed to training will be able to get back more than they put in.”
What will that mean in practice? Given that the apprenticeship levy will be confined to large firms, will small and medium-sized businesses—which often find it difficult to train apprentices on the grounds of size, capacity and uncertainty over the order book—also benefit from the “get more out than you put in” principle? What happens to excellent large companies that are already exemplary when it comes to apprenticeship training, such as Nissan—in my region—Rolls-Royce and Airbus? Will the levy apply to them? I think it will and, if so, will the levy be used to cascade skills through prime companies’ supply chains, so that entire sectors are as competitive and productive as possible?
I mentioned Airbus a moment ago. The Red Book states that the apprenticeship levy applies in England, so how will it take into account large companies such as Airbus, which has a multinational operation throughout the UK, including at Filton in England and Broughton in north Wales? Will the levy apply to trainees in Filton in the south-west of England and in Broughton in north Wales? In addition, how does the levy link in with existing post-16 provision of education, skills and training, particularly in relation to further education cuts, which undermine colleges’ capacity to provide the training that firms want? Does the Minister anticipate that the levy will offset in full the proposed cuts to further education provision?
On the matter of investing enough, I really want to praise the Government on the measure to make the annual investment allowance permanent and at least £200,000. This is a very welcome step to encourage more firms to invest, with certainty in the long term. Hopefully, it will do much to boost productivity. However, more could be done to encourage innovation, product design, development and manufacture here in the UK. I would therefore have liked to have seen consideration of the expansion of the R and D tax credit, too.
To make us more competitive and productive, it is essential that we have a modern infrastructure. The Red Book and the productivity plan both prioritise road building. There is also mention of airport capacity and broadband connectivity, but for an island nation there was a striking omission. UK ports handle about 95% of all UK import and export tonnage, and 75% of all trade by value. Our ports are vital to our export capability, yet I find it odd that there was no mention of them in the Chancellor’s statement. Will the Minister explain how ports will play a part in boosting productivity? What do the Government intend to do to ensure our ports are as competitive as our rivals’ ports across the continent?
I am keen to see this country at the forefront of innovation, business creation and growth, and for the Government to provide a framework for competitive and productive firms employing highly skilled and well-paid employees. Where the Government have done the right thing to help to achieve that, such as with the annual investment allowance, I will say so, but I am afraid the Budget does not do enough of what is needed to address our massive productivity challenge.
David Warburton (Somerton and Frome) (Con)
May I say what an extraordinary privilege it is not only to speak for the first time in this House, but to follow so many eloquent, lucid and persuasive maiden speeches over the past few weeks? They all make my job a lot more difficult.
My predecessor, David Heath, is a hard act to follow. He was a Member of Parliament for 18 years, and a Minister and Deputy Leader of the House in the previous Government. He served in this place with great experience and distinction and he served his constituents with great loyalty and care. I was delighted that I did not have to fight an election against him. It is not for me to say, but it may well have been because of that that we managed to turn what was a long-held Liberal Democrat seat into a Conservative seat with a majority of more than 20,000. It is also not for me to point out that, because of the far-sighted and very intelligent constituents of Somerton and Frome, that represents the largest Conservative swing in the country. I say Conservative swing, because I know there are Scottish Members for whom an 18% swing is pretty small beer.
This was an extraordinary election. It has thrown up an extraordinary opportunity for all of us, as we have been hearing during this Budget debate. It also presents a great opportunity for the west country. It was 1,066 years ago that an earlier form of Parliament, the Witan, sat at Somerton in my constituency, which proves that Somerset has a parliamentary tradition some three centuries older than the modern building that we find ourselves in today. I say that because if the unhappy occurrence of having to pack our toothbrushes and Order Papers and decant to the provinces arose, Somerton would be only too pleased to welcome us back. If that did happen, perhaps it would provide an opportunity for us to get the connectivity for which we have been waiting for so long in Somerset. My constituency is 640th out of 650 when it comes to broadband access, which means that about 140 towns and villages are all stumbling along on 1990 dial-up style retro-internet connections.
Let me take Members on a little tour of my constituency. It starts with the suburbial villages outside Bath, goes down past exciting Frome and the Mendip hills through burgeoning Bruton, racing Wincanton, ancient Somerton, blossoming Langport and on to the Somerset Levels and red-brick Martock—and, of course, the village of Muchelney, which became the island of Muchelney during the Somerset floods last year. That iconic view of the marooned village of Muchelney stands for much more than just the floods. Many people in my constituency in the past felt rather cut off and rather distant—set aside from the machinery of economic growth. That is something that I am glad that the Government are now beginning to address through the Budget.
A flurry, or perhaps more a flood, of activity has been aimed at the south-west, as my hon. Friend the Member for Newton Abbot (Anne Marie Morris) mentioned. We have the dualling of the A303, enormous amounts of investment and railways coming in, all of which will elicit huge yelps of excitement from my constituents—and perhaps reverse some of the exodus of youth that we have seen. About 75% of young people are running away and leaving Somerset, so I hope we can begin to bring them back.
It starts with education. One of my predecessors as MP for Frome was Thomas Hughes, who hon. Members will know as the author of “Tom Brown’s Schooldays”. Although I hesitate to mention Flashman on the Conservative Benches, he was a strong advocate for universal education, and we cannot have universal education without fair funding for rural schools—so I will be fighting for that.
Let me finish by citing another former constituent, Walter Bagehot, who said:
“The great pleasure in life is doing what people say you cannot do.”
Those are the words that have led me here and are the words with which I hope we can lead the west country forward.
Ian Paisley (North Antrim) (DUP)
I commend the speech of the hon. Member for Somerton and Frome (David Warburton). I have spent a career doing what a lot of people told me I could not do, and I shall certainly continue to do so. I wish him well as he fills the big shoes of his predecessor. I hope things go well for him in this House.
I welcome the aspirations set out in the Budget statement. I believe that this Government are committed to balanced growth, to increased productivity and living standards and to making work pay. I welcome, too, the 2% commitment to defence spending. That is most welcome as something for which we campaigned strongly during the election campaign.
The Budget missed many points that the Government could have delivered, but I welcome the ongoing commitment to reduce corporation tax. That is a welcome stance, as I believe in a low-tax economy, which I believe drives jobs and employment. This also sends a powerful message to the Northern Ireland Executive—that as the Government here on the mainland continue to reduce corporation tax, Northern Ireland is missing the opportunity, every day that passes, to reduce its corporation tax. We have the right and the opportunity to control it completely—to reduce it to a very low level indeed or to remove it entirely. I think that the Northern Ireland Executive has been sent the message that they should get their skates on and reduce corporation tax as a matter of urgency. In my view, it should be lower than the 12.5% that is the current rate in the Republic of Ireland, our southern competitor, but we should certainly get our skates on, given what the national rate will be by 2020 if the Chancellor continues to have his way. The cost of reducing our corporation tax will be considerably less as a result of the Budget: Northern Ireland will be saved tens of millions of pounds a year, and that in itself is welcome.
I am, however, concerned about the high rate of personal income tax throughout the United Kingdom. According to statistics from Christian Action Research and Education, one-earner families pay a third more tax than families in all the other richest countries in the world, and the tax bill of United Kingdom households with full-time mums is the highest in the world.
Other taxation issues also need to be addressed. The Budget statement made no mention of the impact of high energy prices, which could potentially drive jobs out of Northern Ireland. They are being fuelled by an environmental tax which is set to increase from £5.6 billion to £16.1 billion. That will be very bad for Northern Ireland. My constituency contains one of the largest employers in the country, Michelin Tyres, which is a high energy user. Following the Budget, I received a letter from the company saying that energy pricing tariffs in Northern Ireland were the second most expensive in Europe, and that the cost was having a serious impact on Northern Ireland businesses. While the national Government here are holding off in regard to certain payments, I agree with the company that Northern Ireland’s renewables obligation certificate system for onshore wind could be seriously detrimental to our businesses.
The Government did not take the opportunity to reduce VAT on tourism, which is one of our key employers, and drives between £400 million and £500 million into the local economy. We currently pay 20%, while our neighbour pays only 9%.
As for the welfare reform changes, I welcome the reduced cap, but I am concerned about the different cap levels in different parts of the United Kingdom. The cap is being regionalised in favour of London, and I think that that is wrong. I believe that there should be a universal reduction.
The welfare changes must now be implemented at Stormont. We are currently experiencing considerable delays. As we discuss the impact of the Budget on a devolved part of the United Kingdom, we should recognise that the crisis that Northern Ireland is facing could cause that devolved institution to crumble. The Government should convey that message, and prepare themselves for the worst-case scenario of a collapse of devolution in Northern Ireland as a result of the inability of certain politicians to do their job, to count, and to secure a settlement on welfare reform.
Mr Robin Walker (Worcester) (Con)
This is a Budget that can make a step change in the British economy. It is a Budget that can step us up a gear in terms of work, productivity and pay.
It is a pleasure to follow an excellent maiden speech from my hon. Friend the Member for Somerton and Frome (David Warburton), and a very thoughtful speech from the new Chairman of the Business, Innovation and Skills Committee, the hon. Member for Hartlepool (Mr Wright), whom I congratulate on his election.
I am delighted to be called to speak in a debate on local growth, because I believe that the first objective of the Budget is to deliver growth and prosperity throughout the United Kingdom, and particularly in places such as Worcester. If growth is to reach every part of the UK, it must be sustainable, and if it is to benefit the whole population, it must be translated into sustainably higher pay. For that, the first requirement is fiscal credibility. We need only look at Greece to see the situation countries can get into when they lose control of their finances to know that the Chancellor is right to say that if we do not control our debt, our debt controls us. As my right hon. Friend the Secretary of State pointed out in his opening remarks, that was very much the situation in the UK in 2010, but through the gargantuan efforts of the British people, British businesses and the British Government we have reduced our deficit and set out on a path to begin to pay down our debts.
The second requirement to deliver sustainable growth is security, and I am delighted that this Budget does what the coalition could never, and commits firmly to investing in our nation’s security and defence with that 2% of GDP commitment.
The third requirement is productivity, and I particularly welcome the detailed productivity plan that was published on Friday. This is not before time. The UK lags behind other leading economies in productivity, and it was not a Labour spokesman but my hon. Friend the Minister for Skills who set out the scale of the challenge in his 2012 Macmillan lecture for the Tory Reform Group, when he said:
“we in the political pack must not duck the really hard economic question— which is, why have people in the low and middle-ranking jobs not been able to secure a real increase in their pay for nearly a decade? And we must not dodge the really hard answer—which is, that the productivity of people in those jobs is falling behind that of their competitors.”
He concluded:
“If we want our economy to grow again, if we want our national income to be honestly earned and fairly shared…if we want to benefit from healthcare that is high quality and free, if we want to live comfortably in retirement, if we want all these things, we need to ensure that we are all a lot more productive than our competitors.”
He was right to put productivity at the heart of our mission, and the Chancellor has been right to put productivity at the heart of this Budget. I welcome the plan that sets out to raise investment in skills, in research and development, in infrastructure and, most of all, in people, in order to achieve this.
We need to provide the right incentives to businesses to invest and that should become a core principle of the Government’s ongoing review of the business rates system. We need to remove the disincentives that penalise manufacturing businesses from investing in value-added plant and that create an artificial shelf on business expansion for businesses of all sorts when they move from smaller to larger premises that fall just above the small business rate threshold. We need to design the system so that it supports growth and helps scale-up businesses. We should consider discounts for businesses that invest more in training their staff, and tapers to support businesses that grow through the thresholds for small business rate relief. I look forward to further updates on that important review, promised by the end of this year. This must not be seen merely as an administrative review, but rather as an important tool in the drive to provide higher productivity.
To get there, we need to improve our skills base. It has long been a truism in the post-war period that Germany does skills and apprenticeships better than us. This Government’s commitment to driving up the quality and quantity of apprenticeships has begun to change that, and it is essential that this continues. I am pleased to see the drive to achieve 3 million apprenticeships by 2020 and the use of the German funding model, where large employers pay a levy towards the cost of training.
We also need to make sure that schools deliver the best possible education across the country, which means delivering on one of the key commitments of the Conservative manifesto: fairer funding for all our schools. In a time of overall budget constraint this has never been more urgent, and I look forward to seeing the detail for delivering that in the next spending review. I was pleased to see fairer funding highlighted up-front in the executive summary of the productivity plan.
One of the most welcome changes in the Budget was the creation of the new roads fund predicating vehicle excise duty revenues to investment in our roads. I recently held a debate on the vital priority of upgrading Worcester’s southern link road, including the Carrington bridge, a key bottleneck in our area. Any Government committed to local growth will want to fund such projects.
We need to keep focusing on holding down the cost of travel. That is why I particularly welcome the extension of the fuel duty freeze that the Conservatives in government have now maintained over five years. So many of my constituents are concerned about this and so many businesses have told me what a massive issue it is for them that it has been something I have campaigned on in each year of my parliamentary career. Fuel costs contribute to the cost of living for everyone, whether or not they drive a car, and the price of food in our supermarkets is one of the things that would be higher and less affordable if Labour had had its way and fuel duty was higher. I also believe that the Treasury benefits from holding down fuel duty over the long term as economic activity increases.
Beyond transport, higher productivity will require businesses to have the confidence to keep investing, and the decisions to keep bringing down corporation tax and to maintain the UK’s world-beating research and development tax credit offer and extend capital allowances each have a vital role to play.
Richard Fuller
Does my hon. Friend agree that it is not just the specific measures that are valuable to the economy? The record over a number of years of setting a trajectory of lower taxation for businesses assists all of us, creating jobs and increasing the wealth of the country.
Mr Walker
My hon. Friend is absolutely right about the track record of delivery and the confidence that that gives business to invest over the long term.
The biggest change we can make to help people with the cost of living is to ensure they are paid better and keep more of what they earn. The Budget takes this further by delivering a national living wage. I welcome the fact that not only is this key social reform being delivered by a Conservative Government, but that the Government are taking steps to help to ensure that businesses, particularly small ones, have the help they need to deliver it. The extension of the employment allowance by a further £1,000 and the reduction in corporation tax will help to make sure that businesses can play their part. I hope the Chancellor will consider carefully how the charitable sector and the care system can be supported in adjusting to this change.
The Opposition have made much of the changes to tax credits. One would think from hearing some Opposition Members’ speeches that in altering this system we were taking on a core principle of the post-war consensus and the welfare state. In fact this invention of Gordon Brown has always been problematic. As the right hon. Member for Birkenhead (Frank Field) has pointed out repeatedly, the limited resources of Government can be better used in targeted support for early intervention and in helping troubled families than in a subsidy for employers to pay low wages. The growth of its cost from £1 billion when it was launched to £30 billion today is clearly unsustainable. The right hon. and learned Member for Camberwell and Peckham (Ms Harman), who is currently leading the Labour party, was right in thinking this is a change it should support, and it is a shame that the contenders for the leadership and those on the Labour Front Bench do not share her vision.
I welcome this Budget as a boost to local growth and look forward to supporting it in delivering a more prosperous, better paid and more productive Britain.
Jonathan Ashworth (Leicester South) (Lab)
Like my right hon. Friend the Member for Wolverhampton South East (Mr McFadden), I shall start by making a few observations about the state of the public finances.
When the Chancellor delivered his Budget speech last week it struck me that that was the fifth time he has had to come to this House and admit he has got his targets on balancing the books wrong. We all recall that in 2010 the Chancellor promised to balance the books by 2015; he failed. Just two months ago the Conservative party’s manifesto told us it would balance the books by 2018-19, yet just two months later the Chancellor came to the House and told us he is now going to balance the books by 2019-20. That effectively means that since the March Budget the Chancellor has pencilled in £18 billion more in borrowing, and he is balancing the books by 2020 by changing the profile of his public spending cuts and increasing taxes by £6.5 billion. These were not figures we heard much of in the general election campaign.
Although the Chancellor is smoothing out these public spending cuts, they are still deep. Public expenditure will have been cut by a third since 2010. By 2019-20 we will have seen £19 billion in cuts and we know that a large proportion of the cuts will fall on local government. Leicester city council is expected to find £54 million in savings per year over the next few years. It faces deep cuts but it will have to pick up the pieces of a deeply regressive Budget.
Andrew Bridgen
Would the hon. Gentleman support the Leicester and Leicestershire combined authority’s bid that is currently with the Secretary of State?
Jonathan Ashworth
Of course I would support Leicester and Leicestershire working together. We have a mayor in Leicester. I am sad that Leicester Conservatives oppose that. I hope the hon. Gentleman will support me in the campaign to get the Government to deliver on their promise on midland main line electrification, which they have broken, as he knows.
Lilian Greenwood
Given that Network Rail’s board minutes from March made reference to
“decisions required jointly with the DfT re enhancement deferrals from June”
does my hon. Friend agree that Ministers need to come clean about when they actually decided to shelve that vital investment in our region?
Jonathan Ashworth
I entirely agree with my hon. Friend. She will recall the Chancellor coming to Derby in February to launch his long-term economic plan for the midlands, one point of which was that the Tories would deliver electrification of the midland main line. The fact that they have now shelved it and there is nothing in the Red Book about when they are going to bring it back on track—excuse the pun—is an absolute disgrace and the Government are letting down the people of the east midlands.
I was talking about tax credits, and let me make it clear that I cannot support a Budget that spends £1 billion giving an inheritance tax cut to some of the richest estates in the country while cutting deeply into tax credits. In Leicester, the diverse city I represent, larger families are very typical and we are going to see further cuts to tax credits, which I fear will increase the already severe child poverty in our city.
A small change to tax credits that has not been remarked upon is the decrease in the income disregard, and I am worried about what it might mean. Conservative Members may recall that in 2002-03 this measure was brought in to deal with the overpayments that were plaguing the system. The problem might not now arise as the Government’s IT systems may have been updated, but I will be interested to know whether Ministers are confident that this small change to tax credits will not lead to the overpayment problems we had in 2002-03.
The increase in the national minimum wage—it is not a living wage, despite what the Chancellor told us at the Dispatch Box—was a bit of a conjuring trick. It was a bit of semantic prestidigitation from the Chancellor—[Laughter.] I say to my hon. Friend the Member for Hartlepool (Mr Wright) that we are intellectuals in Leicester—perhaps it is not the same in Hartlepool. He should just ask my right hon. Friend the Member for Leicester East (Keith Vaz). It was a conjuring trick by the Chancellor—I will stick to that terminology—because he said he was increasing the living wage. It was an increase in the national minimum wage for over-25s—that is a pay increase and of course we would welcome it—but it will be interesting to see what happens to the Chancellor’s gamble on whether the jobs market can withstand that increase and we will watch that carefully. That increase, however, is not going to make up for these tax credits cuts. The Institute for Fiscal Studies said that that is—
Jonathan Ashworth
I hope the hon. Lady does not mind, but I am not going to give way. The IFS said that that is arithmetically impossible. So when the Chancellor tried to pretend that by increasing the minimum wage he is compensating for the loss of tax credits, it was a complete conjuring trick.
I wish to make a couple of final points about trade, which my hon. Friend the Member for Hartlepool talked about persuasively. I agree that we need to do more to increase trade. I am particularly concerned about our trade with India, because we now export less to India than we did in 2010, despite the Government’s rhetoric. I am particularly worried about the state of the global economy. Our current account deficit has widened to 5.9% of GDP, the OBR says that we have the largest annual peacetime deficit since at least the 1830s and we are £367 billion short of the £1 trillion goal on exports. Higher education is a great export of ours, which is why I am deeply disappointed, yet again, by the rhetoric from the Business Secretary telling international students that they should not come to this country to study. For a city such as Leicester, which has two universities and benefits from international students, that is very damaging. [Interruption.] The Chief Secretary to the Treasury is shaking his head, but those were the remarks of the Business Secretary so he should have a word with him.
We know that there is a hiatus in global trade, with commodity prices falling. In the foreign affairs debate during our consideration of the Gracious Speech, I spoke about the problems of China and warned of the frenzies on the Chinese stock market, with millions of Chinese borrowing money that they cannot repay to invest in what they think will be one-way bets. Last Thursday, the Chinese stock market came to a juddering halt. After just three weeks, investors have lost $3 trillion; there has been a 30% fall in China’s stock market, with a loss in value equivalent to the UK’s economic output in the last years. That could deter investor confidence across the Asian nations. We have also seen weakness in the US economy. Investing in China is not a one-way bet. Of course I support the Chancellor’s move to sign up Britain to the Asian Infrastructure Investment Bank, but we will be foolish if we think that investing in China is a one-way bet.
Given these global headwinds—not just in Greece but in China—the weakness in the American economy and falling commodity prices, this Budget was a missed opportunity. In this Budget we should have seen more investment in manufacturing, in higher education, and in science and research and development. Given what we are seeing on the world stage, this Budget may well be considered politically clever for a Chancellor trying to move into No. 10 Downing Street, but I fear it has left Britain ill-prepared in an increasingly uncertain world.
Michelle Donelan (Chippenham) (Con)
Thank you, Mr Deputy Speaker, for allowing me the privilege of making my maiden speech today. It is a pleasure to speak in the debate on a Budget that seeks to enable people to work hard, get on and aspire. That is what I want for the people of Chippenham, and I am honoured to be their MP.
My constituency of Chippenham, contrary to the name, contains four towns and lots of beautiful villages. It is quite something: a varied area dripping in history and charm. Our pocket of Wiltshire is a place that residents, including myself, do not just live in, but are proud to call home. Perhaps its greatest asset, however, is its residents, who are welcoming, generous and kind.
The gateway to the south-west, my constituency is home to Chippenham town, traditionally a cattle market town based around Westinghouse, now Siemens. It also contains Melksham, a market and manufacturing town where some of the largest companies remain: Avon Rubber and Cooper Tyres. Now, however, most residents in Melksham, Chippenham, Corsham and Bradford-on-Avon have to commute out of the area for work; we simply do not have enough local jobs for local people. I will not beat about the bush: my mission as their Member of Parliament is to help make our town centres hubs once again and to support local businesses, so that my constituents can live in their constituency and work there.
Corsham is famous for its idyllic high street, featured in BBC’s “Poldark”, but it is now an emerging digital hub, with the Corsham Institute. The town desperately needs the railway station to be re-opened, in order to support the high street and tourism, and to improve the quality of life of local residents, and I will continue to fight for that. It would be remiss of me not to stress the beauty and historic wonder one is filled with when visiting Bradford-on-Avon, a town buzzing with community spirit and passion. But our medieval town struggles from a severe traffic issue; it was built for the horse and cart and not the modern motor car. That is another issue that will remain at the top of my agenda. Our villages spread across the constituency, each with its own unique offering, with perhaps the most famous being the National Trust village of Lacock, home to Lacock abbey—or as people might know it, Harry Potter’s Hogwarts.
I am privileged to follow in the footsteps of Sir Robert Peel, the founder of the modern police force and, more recently, those of the irrepressible and impressive Sir Richard Needham, the longest serving Northern Ireland Minister. I plan to serve the constituency with the same determination and passion as he did. My most recent predecessor, Duncan Hames, focused his efforts on the environment and mental health services, an issue close to my own heart. I commend his support of the community-led projects that he backed.
I hope to add to the dynamic and representative nature of the House—after all, I do come from a career in wrestling, but as a marketer, I might add! So why am I actually here? I am here as a doorman, but not in the conventional sense—let me explain. My father and my grandfather taught me the values of hard work and ambition, and I believe in a Britain where everyone can achieve and get on in life. I really do not think it should matter where you began; it should matter where you are going. To me, therefore, the role of an MP is to open doors for others along the way. Hard work and ambition are vital for success, but a good education can make the real difference—perhaps it is the most important door of all. Excellent teachers make excellent schools and every child is different, but all need inspiration, encouragement and support. School funding is vital, though, and we must move to a national funding formula as soon as possible—Wiltshire is one of the lowest-funded authorities in the entire country. Now is also a time for stability in education, but we must ensure that our education system meets the needs of our economy, our pupils and our teachers, and of the future of this country.
Vocational training needs to be pushed and promoted, with the stigma challenged. We need to continue to work towards reforming our career education, so that we actually promote the jobs that the economy needs. Expansion of the apprenticeships programme is a good first step but, above all, we need to modernise our education system, incorporating more taster business skills. We just cannot wait any more for entrepreneurs to be born. We need to help foster and develop a “can do, will do” attitude. Education in the UK needs to be more proactive and we must further enhance the link between business and charities, creating the workforce, the entrepreneurs and the volunteers we need. The answer therefore lies in a long-term education plan.
Creating opportunities covers many areas, and I will work hard during my time in this House to create a society in which everyone can achieve their dreams. As I have said, what matters is not where we come from, but where we are going. My dream was never just to get here, but to get others where they want to be. I hope that, through this role, I will open door after door for the residents of the Chippenham constituency.
Heidi Alexander (Lewisham East) (Lab)
I congratulate the hon. Member for Chippenham (Michelle Donelan) on an excellent and engaging maiden speech.
It will come as no surprise to you, Mr Deputy Speaker, that last week’s emergency Budget was not the one that I wanted to hear. It was not the one that many of my constituents wanted to hear either. Although I welcome plans to abolish permanent non-dom status, to fund the NHS and to expand apprenticeships, I cannot say the same for the Government’s rebranding exercise on the minimum wage, the ending of maintenance grants for less well-off students, and some of the changes to tax credits, which are a lifeline for many people in low-paid work.
I wish to focus my remarks on a subject that barely made it into the Chancellor’s speech last week: the supply of new, genuinely affordable homes. Access to affordable housing is the single biggest concern of my constituents. During the election campaign, I lost count of the number of people who spoke to me about their housing problems. There were the young mums outside primary schools in Catford who had been placed in temporary accommodation three hours away from their children’s school; the professional couple in Hither Green who had been renting for years and were simply unable to buy because of the soaring costs of London homes; and the nurse in Blackheath who rents a room in a flat because she cannot even afford a shared ownership property.
The housing market in my south-east London constituency is broken. It may not seem broken to the private landlords, the property developers or the rich overseas investors, but for the vast majority of Londoners, the capital is in the grip of an all-too-real housing crisis —and, let us be honest, it is a crisis. It is a crisis that has been long in the making, but one that deepened under the previous Government. Small changes to the tax relief on buy-to-let mortgages, while welcome, do not amount to the concerted action required from Government on land, on finance and on planning to solve this problem. I wish to speak about the first two of those.
In the past decade, London’s population has grown by 1 million. It will grow by another million over the next 10 years. If the country’s economy is to do well, London needs to do well, and for that to continue we urgently need to get to grips with the capital’s housing problems. The Government must wake up to the fact that homes need to be built where there is most demand for them and where genuinely mixed and sustainable communities can be created. Automatic planning permission on brownfield sites is not the answer. We want places where people will want to live, can afford to live and which will stand the test of time.
When the Chancellor spoke at the launch of the London Land Commission earlier this year, he said that there was nothing inevitable about London growing. He was right about that and he was right to set up the commission with the express purpose of identifying public land for housing development. But the commission cannot just be about high-rise designer apartments on the River Thames; it must be about homes for Londoners. Tackling the under-supply of genuinely affordable housing in London is not a regional priority; it is a national one. The London Land Commission should be identifying public land not so that it can be released to the highest bidder, but so that it can be used to build homes in which Londoners can afford to live.
The Government’s so-called affordable housing, which is let at 80% of market rent, is not affordable to anyone on near-average incomes. All those central London hospital sites, which the Government are so wrongly intent on flogging off, should not become a “reserve currency” for the rich and international jet set—somewhere safe to park their money. Public sites should be used to provide homes for people who keep our city running—our nurses, teachers, policemen and women, shop workers and office cleaners. London will always have hundreds of thousands of people doing those jobs. Many of those jobs will never be the best paid, but those who do them need somewhere secure, accessible and affordable to live. Half of all homes built in London over the next decade should be built by councils and housing associations and be let at 50% of market rent.
Hundreds of thousands of the lowest-paid workers currently live in private rented accommodation in London. Their wages are topped up by in-work housing benefit, which goes straight to the landlord. These people do not live a life of luxury. They often live in relatively poor-quality housing, and worry about the threat of eviction. We, the taxpayer, pay their landlords—via housing benefit—so that they can live in this state of uncertainty. It makes no short-term sense for the individual and their family, and it makes no long-term sense for the public purse either.
In Lewisham, the annual difference paid in housing benefit on a two-bedroom council flat and an equivalent flat in the private rented sector is nearly £9,000. If just one extra family in receipt of full housing benefit in a two-bedroom flat in Lewisham were rehoused in a council home, the revenue saving to the public purse would be £9,000 a year. That is a £9,000 saving for one household in one flat in one of London’s 32 boroughs. Housing benefit is paid on more than a quarter of a million private rented properties in London, costing the taxpayer £2.6 billion each year, up half a billion pounds since 2010.
Every single taxpayer in the country should be interested in the amount of social housing in London. When I came to this House five years ago, I said that one of my priorities would be tackling the chronic under-supply of affordable housing in London. It is clearly not a priority for the Government, but I will not rest until they make it so.
Andrew Bridgen (North West Leicestershire) (Con)
It is a pleasure to speak in a debate in which there have been two excellent maiden speeches by my hon. Friends the Members for Chippenham (Michelle Donelan) and for Somerton and Frome (David Warburton).
There has been much talk about the northern powerhouse, which is, quite rightly, a priority for this Government. I wish to talk about the midlands engine, another key priority, which is powering a significant proportion of the very welcome growth that is being recorded under the stewardship of my right hon. Friend the Chancellor of the Exchequer. The east midlands has a higher proportion of its regional GDP in manufacturing and a higher proportion of those in employment working in manufacturing industries than any other region of our great nation.
My constituency and those that surround it are achieving some of the highest growth rates in the country, which is due in part to infrastructure investments and decisions made by the previous Conservative Government back in the ’80s and ’90s. The instigation of the new national forest and the development of the M42/A42 corridor have allowed my area, and many of the surrounding constituencies, to move on from our coalmining past and build a new economic model, using the huge advantage of our geographic location—at the very centre of the country—our hard-working constituents, and our minerals and other natural resources. Such advantages have seen us become a hub for distribution, which has seen rapid growth over recent years as this Government’s long-term economic plan bears fruit.
This Government, in the great Conservative tradition, are laying the foundations for growth in constituencies of the east midlands. I welcome the Chancellor’s important announcement that fuel duty is to be frozen again. When Labour was in power, it saw fuel duty as nothing more than a cash cow in its war on the motorist. Thanks to the way in which this Government have brought the public finances under control, we have kept the price of fuel down, which benefits my semi-rural constituency. We have no railway stations, so a car is not a luxury, but a necessity. The freeze provides stability to the distribution firms in my constituency, many of which operate in a hub around East Midlands airport. It should be borne in mind that more than 80% of goods are transported by road. By keeping down the price of fuel, we are keeping down inflation and the cost of living across the country.
Thousands of jobs in my constituency are dependent on East Midlands airport, and I welcome the Government’s recognition that action may well be required when air passenger duty rates are devolved to the Scottish Parliament. I believe there is a case for going far further on air passenger duty. The UK has the highest air travel tax anywhere in the world, which puts the country at a disadvantage in the global race. If the Scottish Government were to cut the rate of APD by half, the rest of the UK would be left at a severe competitive disadvantage, with English companies and families paying more to do business or go on holiday than their Scottish counterparts. That would be fundamentally unfair.
Alison Thewliss
It will be a terrible shame if the UK Government have to mitigate the actions of another Government. Now the hon. Gentleman might know how that feels to the Scottish people.
Andrew Bridgen
If the Scottish Government decided to cut APD, that would be tax competition and it would behove the British Government to respond, or we would see airports such as Newcastle and possibly Manchester put under severe pressure. I will urge the Treasury to review APD rates and consider the effects that this could have on decisions made in Scotland. I will also ask the Treasury to look at the effect of reducing air passenger duty for the under-12s and under-16s next year, which has already gone through. When a tax seen as excessively high is reduced, that is often followed by an increase in activity. That reduction will not cost £70 million, because far more families with children will take holidays from the UK.
On the area around the airport, I welcome the fact that the Government are inviting bids for a new round of enterprise zones, as I believe a bid will be coming from my district and the local enterprise partnership to encourage growth and jobs in the area and to take advantage of infrastructure improvements, such as the dualling of the A453 from my constituency to Nottingham. This is a scheme that has been spoken about since before I had a driving licence—a long time ago—but has been delivered by a Conservative-led Government. I look forward to going, this time next week, to the opening of the new dual carriageway to Nottingham.
I welcome the progress being made on the devolution of powers, and the fact that Leicester and Leicestershire are one of the two east midlands combined authority proposal bids that the Government have received. From speaking to those involved, I know that there is great enthusiasm for and interest in this bid in both the county and the city, and I hope this can be translated into action, which will benefit all the people living in Leicester and Leicestershire.
We have a productivity gap in the UK. It should be noted that if the UK matched the productivity of the USA, GDP would be some 31% higher, equating to an extra £21,000 per annum per household. We therefore need investment in skills and infrastructure to narrow this gap, and I support the innovative move this Government are considering to deliver that. A combined authority in my county could contribute to that. Through devolution to such local bodies, we can respond to infrastructure issues and skills shortages far more rapidly and effectively than can officials in Whitehall. I look forward to funds flowing to the regions for such projects.
I welcome the Government’s actions on the development of brownfield sites and on road building, which will be of huge benefit to the building and mineral industries and the two large brick factories in my constituency.
Overall, the Budget moves us another step away from the centralised, welfare-dependent client state created by Labour Governments to a productive economy based on low taxes, high skills, high wages and devolved decision making, and it gives this Conservative Government the opportunity to institute long-term economic and infrastructure decisions in the same way as the previous Conservative Government did, which served my constituency so well and laid the economic foundations that are now being built on, ensuring that the midlands engine is firing on all cylinders.
Derek Twigg (Halton) (Lab)
The hon. Member for North West Leicestershire (Andrew Bridgen) spoke about productivity, as did a number of other Members in this afternoon’s interesting debate on the Budget. Productivity is a major challenge for this country, but that problem has not come about overnight. Up till now the Government have not had an answer.
As the hon. Member for North West Leicestershire mentioned, if we compare the UK with America or in some respects France, it is clear that there is a massive difference in productivity. It is such a significant problem that it impacts on our ability to continue to grow as a country and to take the strides forward that are needed for us to become a high-skilled, high-income economy. That needs to be addressed, but I did not see it set out in the Budget or the later statement by the Chancellor. There is a gap in his proposals.
Manufacturing is one of our most important industries and could bring a lot of income to this country, but it has suffered greatly over the past 20 or 30 years. No solution seems to have been put forward to help our manufacturing base, although those who work in manufacturing and those who manage and lead manufacturing have some very good ideas and proposals, but for some reason the Government do not want to listen to them.
In an article last Wednesday the Financial Times stated:
“Manufacturing’s miserable start to the year shows little sign of ending, highlighting the chancellor’s lack of progress in rebalancing the economy as he delivers his Budget statement.”
I share that concern, as I still have a reasonable amount of manufacturing in my constituency. On Friday I visited Hutchinson Engineering, which is doing pretty well but could do a lot better. I saw for myself the work that that manufacturing company does and I was very impressed. The firm is an important part of our economy.
The other problem that we have had is investment. We know that companies have been sitting on a lot of cash, although there has been more investment recently in plant, machinery and IT. That has not happened quickly enough or in sufficient amounts, and I am not sure that companies have the confidence to continue to do that over the long term. We need that investment but the issue does not seem to have been addressed. It is very important to do so.
Investment in infrastructure has been mentioned by other hon. Members. Clearly, there is not enough investment in infrastructure. If one talks to business and companies, one finds that that is their view as well. We must up our game as a country, and I did not see that from the Chancellor. The Mersey Gateway in my constituency, for example, was started under the Labour Government with all-party support, and the present Government continue to support it. That is a fantastic scheme which will improve the area and ensure extra investment, but we need many more such infrastructure schemes around the country.
We have seen the Government backtracking on railway investment in schemes that were started under Labour. Investment in infrastructure is key. At a time when such low-cost borrowing is available to the Government, it beggars belief that they are not doing more to borrow in order to invest in our infrastructure and re-energise our economy.
In the time I have left, I want to touch on two other topics. The first is the Government’s insistence on cutting the public sector and stopping public sector workers having more than a 1% pay rise. This Government do not seem to realise how important our public sector is to us. I shall return to that important issue.
Secondly, on tax credits, as the Budget unravelled the following day, we saw that people on low and middle incomes will be hit badly, despite the so-called living wage, which we know is a minimum wage. Thousands of families in my constituency will suffer a loss of many hundreds of pounds, perhaps even £1,000, as a result, and that is not something they should have to bear. That is unacceptable and it is one of the reasons that I will vote against the Budget.
I mentioned the public sector. I cannot understand the Government’s insistence on slashing council budgets. Councils such as mine in Halton have been a major part of bringing in investment, leading to growth in our local economy over the past 20 or 30 years. It is a very important part of the regeneration that can take place in our economy, but the Government seem to want to continue to cut budgets, forcing councils into an extremely difficult position. In the not-too-distant future, councils will have real difficulty in providing even the basic services that they must provide. That will be a major problem for our country and our communities.
The Government must think again about their austerity plans and the cuts that they are forcing upon councils. It is the poorest communities, such as mine, in one of the most deprived boroughs in the country, that face some of the most difficult times because of the cuts that are taking place. The Government do not seem to care. They seem to want to write off a certain section of the population. The Budget did not have a strategic vision, it was not fair, and it did not have a plan to take this country forward. As the debate has shown, so many problems will result from the Budget that we must oppose it.
Royston Smith (Southampton, Itchen) (Con)
Thank you, Mr Deputy Speaker, for calling me to make my maiden speech. May I first congratulate you on your re-election as Deputy Speaker? I congratulate my hon. Friends the Members for Somerton and Frome (David Warburton) and for Chippenham (Michelle Donelan) on their thoughtful and eloquent maiden speeches.
It is customary for a new Member to pay tribute to his predecessor in a maiden speech, and I am not going to break that tradition today. However, rather than paying tribute to my predecessor because it is the custom and practice, I do so with genuine respect for a man who has served Southampton with distinction. The Southampton, Itchen constituency was in the capable hands of John Denham for 23 years. He has dedicated himself to Southampton residents for over 30 years, starting as a Hampshire county councillor and becoming a Southampton city councillor when Southampton gained unitary status.
John stood for the parliamentary seat in 1983 and 1987, losing to my hon. Friend the Member for Christchurch (Mr Chope) in both elections. Undeterred, he stood again in 1992, and on that, his third attempt, he managed to wrestle the seat from my hon. Friend, winning with a majority of around 500. He then held the seat in four successive elections, each time winning with a healthy majority, with the exception of 2010, when he hung on with a majority of just 192—the number will be for ever engraved on my mind, because he was standing against me.
John held many and varied offices in opposition and in government, becoming Secretary of State for Innovation, Universities and Skills and finally Secretary of State for Communities and Local Government. However, he will perhaps be remembered most for his principled resignation over the Iraq war. He was a Minister in the Home Office when he resigned from the Government because he felt that there was no international consensus on invading Iraq, and he was right. However, I do not think that even he could have predicted what happened subsequently. He finished his time in this place at a moment of his choosing, which very few of us will manage to do. He has my respect and gratitude, and I wish him well in his future endeavours.
Southampton is a medium-sized city with a population of around 245,000 multilingual, multicultural and multi-ethnic people who, for the most part, co-exist in perfect harmony. It is a port city, and it has been so since Roman times, when the first port was located in the ancient town of Clausentum, which is now called Bitterne Manor. The Pilgrim Fathers sailed from Southampton to the new world, and Henry V sailed from Southampton to defeat the French at Agincourt. It was a major embarkation port during the first and second world wars, and it was the port from which the Titanic set sail on its fateful maiden voyage.
Nearly 2,000 years after the Romans first set up a port on the River Itchen, our port continues to thrive. Last year it handled over 843,000 cars, 60% of which were exports. This year there will be visits from over 430 cruise ships handling 1.6 million passengers, and over 1 million containers will arrive or leave through our port.
Having listened to other hon. Members, I realise how lucky we are in Southampton to have a premier league football club, and a club that now holds the record for the fastest hat-trick in premier league history, scored against the Prime Minister’s team when we thrashed them 6-1 in the last home match of the season.
The world-famous Spitfire, like me, was made in Southampton. [Laughter.] It is true. A masterpiece of aerodynamic engineering, it was designed and built in Woolston by R. J. Mitchell and first flew from Southampton airport in 1936. Due to the sheer determination of one Southampton city councillor, John Hannides, it looks like, 75 years after the Spitfire saved this country in the battle of Britain, Southampton and the nation may at last have a memorial to R. J. Mitchell’s aircraft and the brave pilots who protected our freedom. For aircraft enthusiasts and historians, a trip to the city’s excellent Solent Sky Museum to see the Spitfire in its home town is a must.
Wherever we look in Southampton, we see a city that is growing and improving. During the great recession, Southampton continued to expand. We have new residential and commercial premises in Ocean Village, with a new luxury hotel and spa coming soon. We have a new restaurant and leisure quarter, plans for an exciting £400 million waterfront development and a brand-new arts complex that will complete our cultural quarter, which includes the largest theatre outside London and a nationally and internationally renowned art gallery. We have two excellent universities, with 40,000 students bringing extra vitality and energy to an already buzzing city.
Southampton is an ambitious city that knows where it wants to be. It already punches above its weight, but it can, and should, be so much more. It is geographically located in the south, but in many respects it is not unlike a city in the north. Successive Governments, and perhaps still this one, seem to overlook Southampton’s significant challenges. I see it as my job to ensure that we get our fair share of support and a more equitable local government settlement.
Ms Margaret Ritchie (South Down) (SDLP)
I congratulate the hon. Members for Southampton, Itchen (Royston Smith), for Chippenham (Michelle Donelan) and for Somerton and Frome (David Warburton) on making their maiden speeches.
The Secretary of State for Communities and Local Government said that this is a Budget for working people and families. From my perspective, and that of the constituents I represent, nothing could be further from the truth. The Budget is an assault on low-income families. It is unfair to welfare recipients, the young and low-paid workers, as my hon. Friend the Member for Wolverhampton North East (Emma Reynolds) and the hon. Member for Glasgow Central (Alison Thewliss) have stated quite clearly. That needs to be redressed, and pretty urgently.
The Budget is most unfair to the regions of the UK that are most dependent on social security, that have a youthful population and where there is a higher prevalence of low pay. Only this weekend The Observer referred on its front page to a report coming out later this week from the Intergenerational Foundation showing that the gap in pay, rewards and values between the young and the old is widening, and that young people and future generations will be at a considerable disadvantage.
I mentioned the regions of the UK that are most dependent on social security and that will be gravely disadvantaged as a result of the Budget. One such region is Northern Ireland, one of whose constituencies I represent. The Budget provides for an overall transfer of wealth from the less well-off to the more well-off; on the one hand we see a benefits freeze, withdrawal of tax credit and persecution of young claimants, and on the other hand we see significant breaks for inheritance tax and taxation of share dividend income for people who are already doing well. The Budget even has a substantial tax break for big cars.
The Government’s claim that “We’re all in this together” collapses both at the level of the individual and regionally within the UK. At the more macro-economic level, it represents a significant transfer of resources from the poorest regions of the UK to the wealthiest.
In relation to underpinning our local economies, the Government missed a trick. Only last week, colleagues and I formed the all-party parliamentary group on the visitors economy. Part of this is about pump-priming our local economies, but, in addition, the Chancellor should introduce fiscal incentives such as changes to air passenger duty, or devolve the power to do so to the devolved regions. He should also, on a UK-wide basis, reduce VAT on tourism, because evidence from internal modelling within the Treasury shows that this would be a revenue-neutral measure.
The other key measure that would help to pump-prime the economy is the reinstatement of the aggregates levy credit scheme, particularly in Northern Ireland. I would like the Treasury to push the European Commission on that. There is also a need for the Treasury to tell the Commission that the withdrawal of the scheme and the exemption for shale on which the construction and quarrying industry in my constituency is so dependent must be reversed. The request for the recovery of moneys from the past 12 years will place many companies and industries in my constituency at a severe disadvantage.
When we talk about this Budget, we talk about more people in poverty, more people dependent on food banks, and more people looking for other means in order to survive. Why are public sector workers facing another four years of a 1% pay increase? Why have they not been given a more significant increase? The public sector workers who give so much to our local economies are being severely disadvantaged.
The Government need to rethink this Budget. In the comprehensive spending review, they need to look at ways to prioritise spending which underpin our economy and take people out of poverty.
Maggie Throup (Erewash) (Con)
It is with immense pride that I stand before the House today as the new Conservative Member of Parliament for Erewash, working within a Conservative majority Government, making my maiden speech.
I would like to begin by putting on record my personal tribute to my predecessor, Jessica Lee, who served the residents of Erewash with great distinction. Although she served only one term, she achieved much, most notably securing the funding needed to build a new train station in Ilkeston and establishing an annual jobs fair that I now intend to build on.
When thinking about my constituency, we have to start with the question that I am sure is on the lips of all right hon. and hon. Members: where exactly is Erewash, a place that nobody can pronounce, let alone point to on a map? The answer to this conundrum is quite straightforward: it does not exist. In fact, my constituency is one of only three to be named after a river, and perhaps the only one to be named after both a river and a canal.
Like many Members whose constituencies cover more than one town, I have encountered the age-old problem of which place holds the coveted title of “top dog”. As anyone from Ilkeston, or Ilson as it is more commonly known, will tell you, despite the fact that it is the second largest town in Derbyshire, and notwithstanding the fact that it has one of the oldest working cinemas in the country, or has held a royal charter for a weekly market and an annual fair since 1252, it is the southern neighbour, Long Eaton, that gets—I quote many residents—“everything”. Down south, however, the residents of Long Eaton are all too quick to tell you a different but all-too-familiar story. Despite being a global leader in upholstery and furniture manufacture, and once leading the way in the production of Nottingham lace, and despite the fact that it is the birthplace of Dame Laura Knight, the famed war artist, and plays host to one of the finest silver prize bands in the midlands, it is really Ilkeston that gets all the care and attention.
Located between the diplomatic stand-off of those two towns, less than 10 miles apart, there is Erewash’s smallest town, Sandiacre, as well as the villages of Breaston, Draycott, Risley, Sawley and Stanton by Dale. Each one has its own quirks and charms. They could all quite rightly claim to be Erewash’s superior settlement, and I, for one, would be hard pushed to dispute their case. So I have come up with a simple solution to this very real problem—for the sake of my political career, I have to concede that every one of them is right.
Erewash is the land of opportunity and aspiration. We make practically anything that Members care to name, from textiles, pharmaceuticals and cosmetics to furniture, drainage pipes and even beer. In addition to supplying some of this country’s biggest names, including Rolls-Royce, Boots and John Lewis, Erewash is truly a global brand, with many of our engineering and manufacturing firms exporting their goods. We have even managed to design and manufacture our own unique dialect, helpfully recorded in the book “Ey Up Mi Duck!”, a copy of which is available to Members in my office.
My right hon. Friend the Chancellor often talks about the midlands as the country’s engine for growth. This is certainly true of Erewash, and I would go even further by saying that we are the fuel that powers that engine. However, like all constituencies, Erewash does have its challenges, and I take the line that these should not just be swept under the carpet. Ilkeston, Long Eaton and Sandiacre suffer from traffic gridlock throughout the day. The proximity to the M1 motorway and the midlands main line does not solve this problem but appears to cause even more congestion. This is bad for business and bad for Erewash. As the result of a proposed brownfield development of 2,000 houses and industrial units on the site of an old ironworks, thousands more cars will need to use our already heavily congested roads. I believe that without proper planning Erewash will become just one huge car park. We need to be bold with our vision, not just provide a piecemeal solution. That is why I welcome the announcement in the Budget to create a new roads fund, and I intend to be knocking on the Chancellor’s door to get my fair share for Erewash. The same brownfield development offers the ideal opportunity for a number of starter homes to be built, helping the aspiring local people who back our higher-wage, lower-tax, lower-welfare economy to get on the housing ladder.
I come to this House not with a lifelong desire to be a politician but as a result of a series of successful community campaigns. Through these campaigns, I realised I had a choice: just continue to get on with my life or put my head above the parapet. I shall continue to use all the skills gained through my community campaigning to benefit Erewash residents, as I already have done through my campaign to protect the green belt around Breaston from the HS2 hub. Throughout my time in this place, I shall continue to put my head above the parapet and fight for what is right for my constituents and what is right for Erewash.
Steve McCabe (Birmingham, Selly Oak) (Lab)
I congratulate the hon. Member for Erewash (Maggie Throup) on a witty, thoughtful and informed maiden speech.
There is a view that the Chancellor is riding high at present, and it is true that he has probably, for the time being, dished the ambitions of the Home Secretary and the hon. Member for Uxbridge and South Ruislip (Boris Johnson), but my advice to them is “Be patient.” Gordon Brown used to say there are only two kinds of Chancellor—those who fail and those who get out in time. This Chancellor has already failed. He has failed to eliminate the deficit on time, failed to maintain our triple A credit rating, despite his dire warnings of the consequences, and succeeded in reducing debt by virtually doubling it.
As the Institute for Fiscal Studies points out, the key feature of the Chancellor’s true blue Budget is that it will leave 3 million families £1,000 per year worse off, on average. The cuts to sickness benefit will mean that a party that has routinely seemed comfortable seeing cancer sufferers and others declared fit for work will now institutionalise that problem by having all those unfit for work reclassified as potentially fit and therefore eligible only for the lowest level of benefit. That is a blatant attack on the sick, not the workshy.
As with the bedroom tax, and the poll tax before it, no amount of double-speak will change the minimum wage into the living wage. Traducing the concept of a living wage by confusing it with a 50p rise and excluding the under-25s does not wash. It is merely a crude attempt to distract attention from the impact of the cuts to working tax credits. It is putting politics before people and before the country.
This Budget does not address the problems of skills and productivity, and it may in fact exacerbate existing problems in some sectors. In high-tech, science-based businesses, the issue is not wages but skills, access to capital and the capacity to grow. These are the knowledge businesses of which we have too few. We needed a Budget to help and encourage them.
Turning maintenance grants into loans will do nothing to encourage young people to develop the skills we really need, but may frighten off a generation from poorer backgrounds and simply turn Government debt into personal indebtedness. This is the Osborne legacy.
At the other end of the scale, what impact do hon. Members think the combination of tax credits cuts and minimum wage rises will have on the care sector? It is a sector of low wages and immigrant labour, with mostly small businesses or groups such as Southern Cross. We will see further cost cutting, scandals, inquiries and receiverships. Of course, higher wages mean higher fees, and therefore extra demands on already decimated local authority budgets.
My contention is that the short-term political cunning of this Budget will fail because the key decisions are wrong. Inheritance tax is not the priority in an economy that needs better productivity. We should be rewarding effort, not inheritance. The stark picture in the OBR report is the forecast decline in our share of exports at a time when we have the largest current account deficit since modern records began, and research and development spend is now below the European average. Where are the measures to address those problems? How will this Budget help to achieve the Chancellor’s target of doubling exports by 2020? Perhaps that is another target that will be kicked into the long grass as the long-term plan sounds more and more like the never-ending story.
The problem with the Chancellor’s putting all his eggs in a basket designed to win the Tory leadership is that his interests do not coincide with the real needs of our economy. Our problems are not solely to do with welfare, inheritance tax or the public sector. The Chancellor should be addressing private sector under-investment, the failure of companies to grow and the failure to protect small companies. Too many of our small businesses are starved of capital.
Instead of our ideas growing as good, sound British businesses, technological advancements are being snaffled up by foreign conglomerates. Let us look at the Smith and Wright report “Losing Control”, and what has happened to the British aerospace industry in the past few years—the majority of the companies have been taken over by foreign companies or private equity firms focused on short-term profit rather than medium-term growth. The lowering of corporation tax only makes the buying of ready-made UK technology even more attractive.
The Chancellor could have done a lot more, but he is too busy shoring up his friends and shoring up his leadership prospects. My advice is to beware the cheers now, because it could be a case of cheers today and gone tomorrow.
Dr Andrew Murrison (South West Wiltshire) (Con)
We have had a veritable constellation of maiden speeches today, but I am bound to observe that the contributions of my two parliamentary neighbours, my hon. Friends the Members for Chippenham (Michelle Donelan) and for Somerton and Frome (David Warburton), were excellent. I must say that, during the election campaign, I spent a great deal of time in their seats, one of which has a majority that is now significantly larger than mine.
We have heard a lot about the northern powerhouse and the midlands engine room, and I am left wondering where that leaves the west country and the south-west. During a debate last week on the south-west’s economy, my hon. Friend the Member for Tiverton and Honiton (Neil Parish) suggested that it was the land of milk and honey. I am more of a glass half-empty sort of bloke, and I think it is more the promised land—the land to which much is traditionally promised, but to which little is delivered.
I am delighted that the Budget was rather more positive than that for the west country. I am particularly delighted at the £7.2 billion for transport infrastructure. That will certainly help with the A391 and the north Devon link road. I hope that it will help dramatically with the A303, which is known as the highway to the sun. That route has a pretty bad accident record, and I must say that its inadequacies have acted to pressurise the economy in my constituency and further west. Its full dualling from top to tail is well overdue, and I look forward to that project’s completion over the next very few years.
As we get very excited about HS2, which I certainly support, we must also think about rail networks elsewhere in the country. In the south-west, we have traditionally come to see ourselves as the poor country cousins of the rail network. I hope very much that the new stations fund might look, for example, at Tisbury and its platform arrangements. It should eliminate once and for all the need for the Tisbury loop, which adds seven minutes to the journey to London Waterloo. That is quaint in the Victorian sense, but my constituents would rather like to see the end of it as we move towards a more efficient and effective rail transport network.
I am delighted to note that there is £10 million for broadband in the south-west. This rural part of the country very much depends on good connectivity. Rural businesses are suffering greatly because of our failure to communicate properly. It is all very well to say that 95% of the country will be connected to superfast broadband, but not if nearly 100% of urban areas being connected necessarily means that there is a problem in rural and more isolated areas. One has to accept that it is expensive to deliver broadband in more remote locations, but deliver it we must if we are serious about the rural economy.
I am delighted that the Budget statement made a commitment to 2% on defence. My area depends very heavily on defence and security. The £1.5 billion for our security and intelligence services is very welcome. A significant number of my constituents work in that sector, and it is clearly vital to invest properly in it.
I am also very pleased that the Army is continuing to move back from Germany. Wiltshire is the heart and soul of the British Army. It is its natural home, and we must ensure that the Army’s relocation from Germany, at the tail end of its operations there, is expedited and that the troops come home as soon as possible. It is good for our economy locally, and it is most certainly good for the units concerned.
In the few moments I have left, I want to mention paragraph 2.21 of the Red Book on health. Healthcare is clearly a big topic for all of us as constituency MPs. I am delighted that the Government have backed the NHS’s own Stevens report to the tune of £8 billion. Our health service is evolving rapidly: it will be and has to be more focused on primary care and to be more concentrated in large regional and sub-regional centres, and it is bound to be more professionally driven, with a remorseless focus on outcomes. Some of our healthcare outcomes are still lamentable. In this 21st century, we must ensure that the outcomes for constituents approximate to the very best in Europe, rather than be among some of the very worst. We must ensure that people are treated in the community, in parochial settings when appropriate, reserving care in hospitals for those who truly need it. In particular, we need to do away with the awful situation of elderly people and people with chronic long-term conditions ending up in large hospitals inappropriately, where they do badly and where it is expensive to treat them. They ought to be treated more locally by general practitioners and I am very pleased that the Red Book refers to that. I hope that that process will continue.
Margaret Greenwood (Wirral West) (Lab)
It is an honour and a privilege to represent the people of Wirral West and I thank my predecessor for the work she did for people in the constituency.
I want to take the opportunity to pay tribute to the communities of Wirral West, describe its landscapes and draw attention to some of the challenges that face it. Wirral West has areas of great prosperity, but it also has areas of deprivation where people have been forced out of their homes by the bedroom tax. It is nevertheless distinguished throughout by the strength and character of its varied communities. People come together to celebrate life and to support others, and there is a great deal of interest in the environment too.
Whether they tackle social inequality, provide support for those who are disadvantaged, take action on climate change, champion economic sustainability or celebrate creativity, groups across the constituency are working hard to improve quality of life for themselves and the people around them. The Festival of Firsts in Hoylake is a wonderful celebration of music, art and poetry, reflecting the laid-back atmosphere of an area characterised by charming architecture and sweeping sandy beaches. Hoylake Village Life works year-round to stimulate local economic activity, and Incredible Edible shares the fruits of the earth through the communal planting of food, free for the picking in public places. Hoylake is, of course, home to the Royal Liverpool golf club, host of the Open golf championship.
Nearby, West Kirby has a vibrant transition towns group that works to promote sustainable low-carbon lifestyles, celebrating the local environment through talks, public meetings, a monthly farmers market and the annual Earth Fest. In Pensby, people are campaigning hard to save their much-loved pub, the Pensby Hotel, and in Greasby, yarnbombers hit the streets to save the village centre, clothing trees and lamp posts in brightly coloured knitting. Upton retailers are working together to develop a local plan to enhance the local street scene.
Wirral West is blessed with beautiful natural landscapes too. The rural character of Frankby, Irby and Barnston and the National Trust areas of Caldy Hill, Thurstaston Common and Harrock Wood are all greatly prized. The beaches of the north and west of the constituency are internationally renowned for their birdlife, with merlins, hen harriers and flocks of dunlin, short-eared owls and little egrets, and the shore line flecked with curlew and oyster-catchers. At low tide, one can walk out across the beach to Hilbre Island and watch seals swimming around its northerly shore. This is a precious landscape, highly valued by visitors and locals alike, but in 2013 the previous Government granted a licence for underground coal gasification in the Dee estuary, putting at risk this rich natural environment. UCG brings with it risks of subsidence, the contamination of groundwater and damage to the marine environment.
There are impressive voluntary projects across the constituency working to tackle social deprivation, both in Wirral and internationally. In Woodchurch, the Hoole Road Hub is a community venture run by a family team providing welfare advice, training, support and internet access for local people. People drop in for help with problems with housing and benefits, and children come along with their parents after school to do homework together because they cannot afford internet access at home.
The Woodchurch Partnership provides support for the community with programmes such as the Ford Way horticultural project, where volunteers produce fruit and veg and the most exquisite Woodchurch honey. Local mums fight for all local children. Last year they put on a “mischief night” of music, fancy dress and Zorb balls to give the kids on the estate some fun and to keep them out of mischief, valuing each and every one of them, no matter what their background. The community shop on the Overchurch estate gives out food parcels to those in need, with the majority going to people who are in work but who still cannot afford to feed their children. The Chancellor’s announcement of cuts to working tax credits in his Budget will hit working people hard, especially those who are already struggling to feed their families. Churches across the constituency provide food banks, meals and company to those who have fallen on hard times, as well as celebrating the spiritual life of the community.
That constructive community activity is taking place against a backdrop of dwindling public services. Wirral council has had its budget savagely cut by central Government. While Wirral lost £65 per head of population, Richmond upon Thames enjoyed an increase of £54 per head. That cannot be fair and the impact is being felt severely in Wirral. By the end of 2017, Wirral council’s grant funding will have been reduced by about 57% in just five years.
The local authority is committed to doing the very best for the people of Wirral, but it is being put in an impossible position. In 2014 it carried out a public consultation on where the funding cuts should fall. It is a sign of the crisis facing local authority funding that the options considered included cuts to children’s disability services, youth leisure services, school crossing patrols, libraries, pest control, public toilets, allotments, bowling greens and football pitches, and increased fees for cremations and burials. Is there no part of civic life untouched by the Government’s agenda? Do our people not deserve properly funded public services? Can we not afford to build a strong, stable and good society? I ask the Government to consider those questions with full regard to the impact of their cuts on the life of communities in Wirral West.
I believe that the people of Wirral West deserve a society that provides strong and reliable public services for all of its people—a society in which people can afford to feed their children, in which young people can find employment that will enable them to reach their full potential, and in which those who are disadvantaged through ill health, frailty or misfortune can live decent lives with the support they need from Government.
Kwasi Kwarteng (Spelthorne) (Con)
It is an honour and privilege to speak in this important debate after a number of Members on both sides of the House have given good maiden speeches and accounts of the challenges that their constituencies face. I am sure that all today’s maiden speech-givers will become distinguished parliamentarians and will give good service to their constituents.
This was an excellent Budget and I am pleased to support it. When the coalition Government took office in 2010, the deficit was £153 billion. In the Red Book, published last week, we discover that the deficit is £69 billion. There is still a long way to go, but people will recognise that that is a remarkable achievement given the international context and the fact that growth has been much more sluggish across many western economies than we had ever anticipated. The Red Book also makes it very clear that the growth rates we are enjoying as a country and have enjoyed in 2014 and 2015 are particularly enviable. They are the highest across the western world, and we should celebrate that on both sides of the House. That does not happen by accident. It is not an accident that the deficit has been more than halved; nor is it an accident that we are growing faster than nearly all our competitor countries in the G7—I think that we have the highest growth rate in that body.
We appreciate that if the election had gone differently, we would not be in such a good position and there would not be such optimism about the future. It was clear during the election that there was a binary choice confronting the country between a Conservative Government, when the Conservatives had largely delivered very effectively as the leading party in the coalition, and a potential Labour Government—let us be honest, it would have been a coalition—without any economic credibility, when the Labour party was largely responsible for the mess in which we found ourselves in 2010.
I want now to address the specific issues in the Budget that I am particularly happy to endorse and welcome. As a south-east MP, I naturally look to the interests of business—I do not think that business is a dirty word—because lots of my constituents work in small businesses. In fact, 82% of people who are in work in Spelthorne work in the private sector. They work in small businesses, including businesses related to Heathrow airport, and they will welcome the further reduction in the corporation tax rate that my right hon. Friend the Chancellor announced. They will also welcome the fact that the Government are being very serious about addressing the deficit.
The Government’s ongoing commitment to building more housing will also be welcomed. We have talked about the need for more housing, and the Government are happy to take on that challenge.
I am particularly gratified that various measures have been introduced to increase the living wage. The Government are doing absolutely the right thing in reducing the amount paid in tax credits. That is a bold and challenging move, but I am happy to say that it is the right thing to do. However, if the Government are going to do that, they must ensure that companies do not get away with simply exploiting low-paid workers. It is a legitimate corollary of reducing tax credits to try to boost the living wage and the minimum wage. I understand the logic of that move and it is to be commended, even though Thatcherite purists may argue against increasing the minimum wage and particularly the living wage.
Finally, we cannot pretend that the deficit has been resolved or that we are out of the woods in terms of our approach to fiscal discipline. I support and commend my right hon. Friend the Chancellor’s commitment to running surpluses, because my earnest hope is that we will run a surplus at the end of this Parliament. However, when we finally get a budget surplus, the last thing we need is a return to the Labour spend, borrow and tax regime. We need to set in stone a regime whereby this country, like Germany and Switzerland, will have a much more mature and disciplined approach to public finances, and I hope that in the course of our debate we will be mindful of the need to balance the books every single year.
Mr Douglas Carswell (Clacton) (UKIP)
I, too, will vote for this Budget. Tomorrow’s vote is a binary choice and although I have reservations about some of the Chancellor’s proposals, on balance I support the measures. We must never return to Ed Balls economics.
I support a number of measures. I unequivocally back the idea of having a fiscal charter, to echo the point made by the hon. Member for Spelthorne (Kwasi Kwarteng). It is a commitment to run a budget surplus by 2019-20 and to retain that approach in subsequent years unless growth is less than 1%. The principle behind that idea is exceptionally good; as a country, we cannot go on living beyond our means. I believe I am right in saying that we have only had budget surpluses in six of the past 40 years. That is unsustainable and also deeply unfair on the next generation. If we keep on running up these debts, someone will have to pay them, and it is deeply unfair and irresponsible of us to pass them on to the next generation. I only hope that the Chancellor manages to meet his own fiscal charter objectives. He has introduced, I think, five Budgets and in each one he has pushed back the date by which he hopes to balance the books.
I also support the proposal to remove the climate change levy exemptions for providers of renewably sourced electricity.
Kwasi Kwarteng
I am particularly gratified to hear the hon. Gentleman espousing the cause of sound finance. I just wonder how he feels being surrounded by people who deny that there is any need to reduce the deficit.
Mr Carswell
I will come on to say a little about my views on the unreformed Opposition. In fact, I will make them a proposal at the end of my short speech.
My party loves new energy technology. However, there is something we find objectionable: if the technology is so wonderful, why does it need to be subsidised? Removing some of those subsidies is a good thing, particularly when they push up the cost of energy, but the Government lack a fully coherent free market energy policy that allows real choice and competition.
I also cheer Government changes to vehicle excise duty. The new tariff will reflect changes in technology. Given that most new cars’ carbon dioxide output is below the old CO2 low threshold variable, vehicle excise duty is fast becoming a subsidy from poor people, who cannot afford new cars, to rich people, who can. VED will also be used for the creation of a road fund in 2020-21. That is a very sensible move, as it means that taxpayers will see directly where their VED goes and the tangible benefits that come from it.
I also support raising the personal allowance to £11,000 by 2015-16 and to £12,500 by 2019-20. That should be welcomed as a tax break for everyone who works. Indeed, I hope that at some point we will be able to raise the threshold even higher, to £13,000.
I also support welfare reform. When the tax credit system was put in place, I do not think that we ever expected that it would allow big corporate interests to rely on the taxpayer to subsidise their payrolls, and yet in effect that is what has happened. I fear that tax credits may have contributed to wage compression. Welfare reform is possible and necessary, but it is also very important that, as the Chancellor has said, we are prepared to raise the minimum wage to try to offset some of the impact of that reform.
Having outlined where I support the Government, I am afraid to say that there are one or two measures about which I have some concerns. I am particularly concerned about limiting public sector pay increases to 1%. I fear that that may not be politically sustainable over the next four years. There was a pay freeze in the public sector between 2010 and 2013. Since 2013, pay rises have been limited to 1% and, given that inflation is often above 1%, that has, in effect, amounted to a pay cut. If the economy grows in the way that the Chancellor expects it to, I am not sure that four more years of 1% is sustainable.
I also have some doubts about the Chancellor’s fiscal projections; I fear that there is a degree of fiscal complacency. In its manifesto, my old party told us that it would run a budget surplus from 2019, which is only four years later than promised five years ago. In fact, that target has now been pushed back to 2020.
This year, we will still manage to accumulate a deficit of £70 billion and we still have a bigger primary budget deficit than Greece. The budget deficit last year was 5.7% of GDP, which was higher than that of any country in the eurozone apart from, I think, Spain and Cyprus. UK national debt stands at £1,600 billion, which is £950 billion higher than when the Chancellor first took office. That is not an impressive record. Servicing that debt costs £40 billion a year. Think of what we could do with £40 billion—that is more than the entire defence budget. Think of the tax breaks we could give people and, more to the point, think of how much greater that sum will be when interest rates go up.
I will support this Budget, and I look forward to the Finance Bill that follows. If Her Majesty’s Opposition will repudiate Ed Balls economics and table sensible amendments, I will be delighted to support them, bearing in mind that the Government have a rather slender majority. However, there must never be a return to the recklessness of the Parliaments between 2001 and 2015.
As the UK Independence party’s sole Member of Parliament, I will support classical free market liberal economics. From that point of view, this Budget is not perfect, but it is infinitely preferable to the alternatives.
Amanda Milling (Cannock Chase) (Con)
I am very grateful to have the opportunity to speak in today’s Budget debate. This is my first experience of a Budget in this place.
We need only look at our performance on the global stage to see that Britain is back in business. If people visit the west midlands, and more specifically my constituency of Cannock Chase, they will see the benefits of the Conservatives’ long-term economic plan.
Once a mining area, Cannock Chase is now the home of thriving small, medium-sized and large businesses. It is the success of those businesses in the last five years that has resulted in jobs being created, directly leading to a dramatic fall in unemployment. That fall in unemployment was also the result of measures that were taken in the last Parliament to encourage people to get back to work. It is that aspect that I will focus on today.
The benefit cap, which was introduced in the last Parliament, is morally right in ensuring that people are always better off in work. Although I welcomed the cap, I must admit that I always felt that £26,000 was too high. Someone in work would have to earn about £35,000 to take that amount home—a salary or wage that many people in Cannock Chase can only dream of. That view was confirmed by a group of residents in Rugeley only the other day.
In short, the cap was too high but the principle was right. That is why I welcome the changes that were announced in the Budget, which mean that in my constituency benefits will be capped at £20,000. We have a welfare system that we should be proud of, but it needs to be affordable and fair. When I say fair, I mean fair for the people who receive benefits, as well as fair to the hard-working people who pay their taxes so that benefits can be paid. The cap helps to ensure that our welfare system is sustainable in the long term and is there to support the elderly, the vulnerable and the disabled.
We must not just encourage people into work, but ensure that work pays. While unemployment fell significantly in the last Parliament in Cannock Chase, low pay has been an issue in the area. I am therefore particularly pleased to welcome two aspects of the Budget. First, there was the news that the personal allowance will rise to £11,000 from April next year, lifting nearly 900 more of my constituents out of tax altogether. That is a major step towards raising the personal allowance to £12,500 by the end of the Parliament, which will take even more people out of paying tax. That will ensure that working people in Cannock Chase get to keep more of the money they earn—money that they can spend with local businesses and in our town centres to support local independent retailers and market traders across Cannock, Rugeley and Hednesford.
Secondly, I am pleased to welcome the introduction of the new national living wage. As I said, Cannock Chase has historically faced issues of low pay. Cannock Chase deserves a pay rise. That is exactly what my right hon. Friend the Chancellor recognised and addressed with his compulsory living wage.
We need to ensure that that policy is backed by business. That is why I welcome the steps that were taken in the Budget to ensure that the move is not taken at its expense. For small businesses, the increase in the employment allowance to £3,000 means that they can continue to employ four people without paying national insurance contributions at the increased living wage. That is an important step towards ensuring that employers who pay the higher wage will not be stung by the jobs tax.
The path that has been set out to reduce corporation tax to 18% will save businesses across the UK more than £6.6 billion by 2020. That sends the powerful message to international businesses that are looking to invest in companies such as Gestamp, an automotive supplier in my constituency, that Britain is a low-tax, higher-wage, high-skilled economy, and therefore the best place to invest, grow or start a business.
I welcome my right hon. Friend the Chancellor’s Budget. It will help to deliver the Conservatives’ long-term economic plan, and it supports and rewards hard-working people and businesses across the country, in the west midlands and in Cannock Chase.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
It truly is an honour and a privilege to make my maiden speech as the new MP for Cumbernauld, Kilsyth and Kirkintilloch East. I grew up there, I have family roots there and I will always be grateful to my fellow citizens for putting their faith in me to represent our constituency here in Parliament.
As hon. Members across the House will know, the first few weeks of life as an MP give rise to many and varied challenges. There is, for example, the huge challenge of navigating the complicated corridors of Westminster—a challenge that I failed spectacularly when I found myself, by accident, a fish out of water and the cause of considerable mirth, in the middle of a meeting of the Conservative 1922 committee. I think that I escaped, just about, with my political integrity intact.
The other major challenge that I have faced is the fact that there are two new SNP MPs called Stuart McDonald here in Westminster. Given that we spell our first names differently, I was expecting only the odd stray email or letter. In fact, in two short months, my hon. Friend the Member for Glasgow South (Stewart McDonald) has managed to steal my seat on one flight to Glasgow, leaving me stranded at Heathrow; cancel two other sets of return flights; hijack one of my constituents who had travelled 500 miles to lobby me; and steal credit in Hansard for my first ever intervention in this Chamber. At such times, many words spring to mind, but “honourable” and “Friend” are not among them. Looking to the positive side, it was comforting to receive a note congratulating me on my maiden speech some four weeks before I rose to make it.
More seriously, for their assistance in helping me surmount some of the challenges, may I put on the record my thanks to all the staff in the Houses of Parliament, who have been unfailingly helpful in these frenetic first few weeks?
I also wish to pay tribute to my immediate predecessor, Gregg McClymont. A Cumbernauld lad, after school at Cumbernauld high, he studied at the universities of Glasgow, Pennsylvania and, finally, Oxford, where he taught prior to his election in 2010. His mastery of the pensions brief means that he will be missed on the Labour Benches. I know at first hand that he is definitely missed in the parliamentary football team, notwithstanding his inexplicable support for Airdrie football club. I wish him and his new wife well, as well as all his staff, as they take on their next challenges.
Cumbernauld, Kilsyth and Kirkintilloch East is a constituency that is big in name, but also big in character. Situated right at the heart of Scotland, from Croy you are but 20 minutes by train from Glasgow city centre, while from Lennoxtown, you are a pleasant half hour drive over the Campsie fells to the banks of Loch Lomond. It is the best of both worlds, to use that expression in an appropriate context.
The communities of Cumbernauld, Kilsyth and Kirkintilloch East have diverse histories, from old parishes and mining towns to the new town of Cumbernauld itself. The communities have shared ambitions and a determination to forge a bright new future. In the weeks before and after my election, I have been amazed at the range of community groups, residents associations, community councils, social enterprises, churches and charities that work so hard for the local people.
The ambitions of the people of Cumbernauld, Kilsyth and Kirkintilloch East include secure well-paid jobs, strong communities, well-funded public services and a future free from poverty. The Budget does not support those ambitions; rather, as for millions across the country, it puts them further out of reach. The Chancellor spoke of a Budget for security, yet his Government have singularly failed to tackle the scourge of zero-hours contracts. He spoke of fixing the roof while the sun shines, but he risks the roof caving in altogether as more and more families are pushed deeper and deeper into debt, with household borrowing soaring. He spoke of boosting productivity, but he is determined to make UK workers the least protected and least invested in in western Europe. He made claims about a living wage, but, unlike the Scottish Government, his Government do not pay a living wage, and the welcome progress on the minimum wage was utterly undermined by the regressive measures he took on social security. He spoke of efficiencies, but his relentless pace of cuts risks pushing proud public services and committed public servants beyond breaking point.
Perhaps where the Chancellor’s rhetoric was most removed from reality was in his claim to be a one nation Chancellor, when all the while he was deliberately targeting those he accused of making lifestyle choices by the simple fact of claiming social security. He claimed that that was tough but fair. What is fair about systematically undermining the support for low-income families? What is fair about deliberately targeting children and young people for further cuts? My constituents have aspirations, but thanks to Tory Budgets, for far too many of them even putting food on the table at the end of the week is a difficult ambition to fulfil. This is a Budget that does not support aspiration but stifles it.
While other parties might be having some difficulty in deciding whether and what to oppose, we in the Scottish National party have no such problem, because we believe there is a better way. This party has outlined a programme to increase investment in public services while still moving towards balanced budgets. It wants to see action to tackle unfair zero-hours contracts, and we support a partnership approach between employers and employees, recognising the link between workplace rights and productivity and the fact that union participation and collective bargaining can be key drivers of fair pay and efforts to tackle inequality.
It is an honour to serve the constituents of Cumbernauld, Kilsyth and Kirkintilloch East and, however they voted, I will do whatever I can to support them in achieving their ambitions for themselves, their families and their communities.
Richard Fuller (Bedford) (Con)
It is a pleasure to follow an extremely gracious maiden speech by the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald). I particularly noted his kind words for the staff of the Houses of Parliament, which I thought was a particularly noteworthy thing to put in one’s maiden speech, and his kindness to his namesake who took his seat on the aeroplane. The hon. Gentleman follows a man, Gregg McClymont, who was probably one of the most intelligent Members and was one of the most fair-minded, so he certainly has big shoes to fill. He has made a very good start with his maiden speech today.
For me, the test of the Budget is whether it fits with what the good people of Bedford and Kempston talked to me about during the election campaign. As mine was a marginal seat where people had a straight choice between Labour and Conservative, and obviously chose Conservative, I listened intently to what they had to say. Their first and most abiding thought was that they appreciated the need to continue with the Government’s economic policies. They appreciated the stability that those policies had brought to their lives after the tremendous fears about the economy at the time of the 2010 election, when it could have gone either way for the United Kingdom. They appreciated the need for deficit reduction and understood the fundamental point that it is unfair on our children and grandchildren for this generation to continue to live beyond its means, and that somehow, in the fairest way possible, the Government have to find their way to getting the books in balance and to starting to repay the debts. That is the trajectory that was outlined in the Budget.
The second thing that people in Bedford and Kempston told me was that they understood the need for welfare reform and benefit reform to be at the centre of the changes that would be made. As my hon. Friend the Member for Cannock Chase (Amanda Milling) said, for many people, the idea that a benefit cap of £26,000 is somehow fair to them, when they pay their taxes—the median income in Bedford is £19,000—does not strike them as fair. People in Bedford will think that the Government’s proposals in the Budget to reduce the benefit cap, both in London and separately outside London, are fair. They will also see changes such as the limiting of child tax credit to two children, the introduction of a maximum income for staying in council housing and the changes to housing benefit as fair and reasonable.
Alison Thewliss
Does the hon. Gentleman consider it fair that a woman who has been raped will have to declare that to Her Majesty’s Revenue and Customs and the Department for Work and Pensions to qualify for her child to receive tax credits?
Richard Fuller
The hon. Lady repeats a point that one of her colleagues made in an earlier day of the debates on the Budget. We need to examine in this debate the broad range of the impact of the Government’s policies. When the Government make any change, they are moving big blocks around—that is one reason why I am a Conservative, actually. When that happens, there will be specific examples of an impact on people’s lives that the general policy was not supposed to have. The hon. Lady should raise those instances directly with Ministers, so that changes can be considered. However, we should not undermine the entire sweep of Government policy because of a particular example. I have found the Government reasonable in understanding the need for certain changes to benefit policies if they have a deleterious impact on individuals.
Emily Thornberry
The hon. Gentleman is making a thoughtful, although wrong, speech.
If a constituent of mine were a single parent with two children and met up with a man who had a child, would the hon. Gentleman advise her not to get together with that man because they would then have three children and be subject to cuts in their benefits?
Richard Fuller
It is not the role of an MP to advise an individual constituent on their life choices. That is their decision. With respect, the role of an MP is to analyse and scrutinise Government policies to see whether, in the round, they will provide the changes that the British public think are fair and reasonable. Against that test the deficit reduction policies, with welfare reform at their core, accord with what I heard on the streets of Bedford and Kempston. I hope that when the hon. Lady’s party has finished tearing itself apart at its parliamentary Labour party meeting, it will come together and see that it is worth supporting the welfare reforms.
I wish to say a few words about the Government’s proposals on pay. A lot of hon. Members have mentioned the interaction between the introduction of a national living wage and the changes to tax credits. That is an important debate to have, but I hope that Members of all parties will give the Chancellor credit for grasping that important nettle. At some point, the era of corporate welfare, with the taxpayer subsidising wages, had to be brought to a close. The cost to the Exchequer and the taxpayer was getting larger and larger. We were sending terrible signals to employers about what they should do about pay rates, and terrible signals to people in work that if they chose to improve their wages by getting extra skills or training, all their extra pay would be taken away because of changes in benefits. The change needed to be made, so I look to the Opposition to bring forward more thoughtful responses in the weeks ahead. They should have the grace to say that the change is important and that, overall, they support it.
As a Conservative, I say to my party’s Front Benchers that we have not yet seen the impact of tax credits following the recent recession. There is an argument that in the previous recession, during which the Government had a tremendous record of overseeing growth in jobs, tax credits had a beneficial impact in dampening the impact of the recession. They made people more willing to accept reduced hours, because their income was increased by tax credits, so employment could stay high. I urge the Government not to get too ideological about the transition from tax credits to the national living wage, and to be cautious about the impact on businesses on a sector by sector basis.
I welcome my right hon. Friend the Secretary of State’s comments about housing policy. There has been tremendous take-up of Help to Buy in Bedford—one of the highest proportions in the country. The extension of the right to buy to social landlords will be particularly welcome in Bedford. Between 1991 and 2001 the decline in home ownership there was 10%, compared with 4% in the rest of the country, because in 1991 the council put all the housing stock into a social landlord. Since then, the most significant increase in household wealth has been through people buying their own home. For 20 years, a large proportion of people in my constituency were denied access to one of the most fundamental ways in which they could have provided a better future for their children, because they were denied the right to buy. The change to the right to buy has been presented thoughtfully, and I encourage the Government to move it forward.
This afternoon I have heard the progressives and socialists on the Opposition Benches say that they do not support the national living wage, poor people getting a pay rise or people in council houses having a cut in their rent, and that they would deny people on low incomes the chance to buy their home. The right to buy has been one of the most successful policies that any Conservative Government have ever introduced, and I hope that the Government will move forward with it later this year.
Mark Durkan (Foyle) (SDLP)
It is a pleasure to follow the hon. Member for Bedford (Richard Fuller). Although I do not agree with many of his points, I note that—as always—he is careful to reflect what he has heard from his constituents and he makes his own particular points. It is also a pleasure to follow the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald), who made his maiden speech. He is probably the only Member who could accuse another Member of identity theft, hijacking and credit theft, and still comply with the rules of avoiding controversy in a maiden speech.
I cannot agree with what I have heard from some Conservative Members about the Budget. The hon. Member for Cannock Chase (Amanda Milling) said that she was proud to support the Budget because of the moral principle that people should always be better off in work. If that is the moral standard by which we are to test the Budget, then just as the hon. Member for Bedford has listened to his constituents, I have listened to mine who know that as a result of the Budget they will not be better off in work—they are in work and will be worse off because of the significant changes to tax credits, the overall changes and the particular changes to family size and the two-child policy.
Those are people who are hard working and who meet all the tests used in the past by the Government to define hard-working families, strivers and people who have made sacrifices. The region that I represent has very high unemployment and a low-pay profile—it is not as though those people choose to be in that type of employment with the pay that they receive and their dependency on tax credits. This is a wilful choice by the Chancellor: “These are the people who are to be punished. If we are going to balance the books, I am picking out those who have no choice but to work for those wages and need tax credits to support themselves and their families.” That is why I oppose this Budget.
In principle I support the concept of a living wage, and a good, working, national living wage would be a good thing. The Chancellor has used the national living wage not just—supposedly—to grab the headline of increasing the minimum wage, but also to try to puncture the concept of the living wage. The hon. Member for Bedford believes that the tax credit nettle had to be grasped because too many companies were abusing tax credits and paying people less than they should be paid, but there are other ways to tackle that. Let us do more to force through pay transparency in companies. We have talked a lot about trying to improve tax transparency for companies large and small, but we should be doing more on pay transparency as that would help to sort out those issues.
Strengthening and encouraging trade unions to bring forward more pay transparency would also help. If this is about tackling corporate abuse, we should do it at the level of those committing the abuse, not those people who are being “exploited”—in the terms of the hon. Member for Bedford—by companies and therefore have to depend on tax credits. Removing tax credits does not remove the exploitation faced by people on low pay. It makes people walk the plank into poverty simply so that somebody can say the nettle has been grasped. That is a miserable proposition.
I know that Conservative Members favour the benefits cap and placing an overall cap on what families can receive. We continue to oppose the benefits cap which, as we predicted, once introduced has been lowered. We are also seeing the start of regionalisation and a differentiation between London and the rest, and we know that at times people have flirted with the idea of further regionalisation.
As well as the benefits cap there is the welfare cap, and the two are sometimes confused. The welfare cap is generally ignored, but it was introduced by the Government to place a cap on the overall welfare budget across the UK. In the March Budget statement, the welfare cap for 2016-17 was set to be £122.3 billion, but the recent Budget placed it at £115.2 billion—a reduction of £7 billion between March and the summer. What a difference an election makes, yet the Government did not tell us they were doing that.
The 2017-18 benefit cap is down by £10.2 billion from £124.8 billion to £114.6 billion, and for 2019-20 it is down by £16.3 billion from £129.8 billion to £113.5 billion. We know that that will mean not only cuts to households or people with disabilities but cuts that hit spending power in economies such my constituency where, because of high unemployment, low wages and high levels of economic inactivity, people are dependent on benefits. There will be a cost not only to those family economies but to the local economy as well, and that is why I will oppose this Budget.
Fiona Bruce (Congleton) (Con)
I welcome the Budget. Much of the thinking behind it recognises that worklessness is a root cause of child poverty, and that a lack of employment skills and effective training for the world of work dramatically reduces a young person’s life chances. I welcome the Government’s determination to address those issues, and in my constituency we can already see tangible results. Unemployment figures for the five years to June 2015 have fallen by no less than 62%, and the number of young people claiming out-of-work benefits for a similar period has fallen by 61%.
Investment in the economy of the area has been unprecedented. An investment of millions of pounds has been made in Jodrell Bank as part of the science corridor across Cheshire, and no less than £46 million has been committed by the Government to the Congleton link road. I trust that the Minister will join me in recognising that one key reason for that local growth grant was to open access to and land for business parks and employment sites, and to increase job opportunities for local people. That should remain a key priority in the finalisation of the link road plans, so that businesses such as Reliance Medical Ltd—led by inspirational local businessman Andy Pear—have room to expand locally, along with others such as Senior Aerospace Bird Bellows. We must send a clear message to international companies with factories in the area—such as Airbags International—that Cheshire and the UK are very much open for manufacturing business.
The northern powerhouse concept is welcome. I ask Ministers to ensure that its benefits truly extend beyond the Greater Manchester region, so that young people in constituencies such as mine in Cheshire who—as a recent survey of Congleton youth council showed—very much want to stay, live and work in the towns that they grew up in can do so. One immensely effective way in which the impact of the northern powerhouse could be widely realised would be the reopening of Middlewich railway station to passengers—a campaign that thousands of residents of Middlewich have supported for many years. That would open up rail access directly from Crewe, right through Cheshire and into Manchester, and relieve pressure on the M6. It also has the support of many surrounding constituency MPs. I urge Ministers to look into that and to revert back to me with their considerations.
I also welcome the Government’s intention to fast-track the building of homes on brownfield sites. A great deal of grief, no less, has been caused in my constituency as a result of the rapacious attack on green space sites by developers—including prime agricultural land—only a stone’s throw from hundreds of brownfield housing plots that they persist in ignoring. I welcome the Minister’s intention to encourage development on brownfield sites, but we must ensure that not only is permission fast-tracked but that developers are realistically motivated to build on that land and not just to bank permissions. Not only a carrot but a stick may be needed. I welcome the news that Ministers have plans to improve the timely delivery of a local plan where a local authority has not yet produced one, and I ask Ministers to clarify urgently what the Government’s plans are to ensure that that takes place.
I referred at the outset of my speech to worklessness being a root cause of child poverty. Another root cause is family breakdown, and I would like to address two issues that concern me with regard to that and to the Budget. The first is Sunday trading because I am deeply concerned about proposals to delegate Sunday trading legislation to local decision makers. In August 2014 the Government made a welcome commitment to put family back at the heart of public policy, and to initiate a family test so that all new domestic policy should be considered in the light of its impact on families. I cannot see how the proposed alteration of Sunday trading regulations will have anything other than a negative impact on families. Ministers may argue that the decision the House is being asked to make is simply one of delegation rather than relaxation, but I cannot accept that.
When one local authority area decides to relax its Sunday trading regulations, surrounding areas may well feel compelled to do so, and we should recognise that reality. As the National Society for the Prevention of Cruelty to Children states, Sunday working has a detrimental effect on the quality of time parents can spend with children, and I am particularly concerned that that will affect children in the poorest families most, as they have least flexibility in deciding whether to work on Sundays. The health and strength of family relationships are not only a major influence on the health, wellbeing and life chances of children, but key contributors to the economic wellbeing of the nation. Parents, children and communities need time to rest, recharge their batteries and invest in relationships, and we further degrade Sundays as a day of rest at our peril.
I am disappointed that the Budget made no mention of an extension of the transferable tax allowance for married couples. It is currently worth only about £200 a year, whereas the value of 30 hours of free childcare is about £5,000. What message does that send to the stay-at-home mum or dad? Extending the transferable allowance would send a proper signal in favour of marriage and stability, recognise the important role played by stay-at-home spouses and help to address the seriously unbalanced tax burden that we place on one-earner married couples, as the “Taxation of Families 2013” report published last week by CARE—Christian Action Research and Education—showed. The report also highlights how one-earner married couples with two children on 75% of average wages face a marginal tax rate of 73%, the highest in the OECD.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
It gives me great pleasure to deliver my maiden speech to the House today as the first SNP Member of Parliament for my home of Paisley and Renfrewshire North. The fact that it was our first victory has not been for lack of effort over the years. My hon. Friend the Member for Kirkcaldy and Cowdenbeath (Roger Mullin) contested the seat in the 1990 by-election. He fought a brilliant and memorable campaign, despite the fact that he was hindered by an eager but occasionally ineffective 10-year-old boy called Gavin. I should have been better. By that point I was a veteran, a seasoned campaigner keen to follow my dad to any political event. Two other campaigns from around the same time that I am proud to have been part of were the one against the iniquitous poll tax and that against the closure of the Ravenscraig steel plant in the constituency of my hon. Friend the Member for Motherwell and Wishaw (Marion Fellows).
The late 1980s and early 1990s saw the Conservative Government rip the heart out of hard-working families and communities right across Scotland. That was the height of Thatcherism and her Government’s policies caused untold damage to Scotland, to our economy, to our people and to our self-confidence. Little did we know it at the time, but those decisions about Scotland—made on our behalf in Westminster and Whitehall against overwhelming Scottish public opinion—would cause a massive political shift in Scotland that would not only see the Conservatives all but wiped out for a generation, but cause a depth of feeling so strong that a form of self-government was inevitable.
Fast forward a quarter of a century, however, and here I stand—and, as we say back home, “I’ve brought hauners.” I am immensely proud to be representing my home constituency of Paisley and Renfrewshire North, where I have lived almost my entire life. I was very fortunate to be able to vote in what was my old primary school, and is now that of my two young daughters.
I would like to say a few words about my predecessor, Jim Sheridan. Jim was the Member of Parliament for the area for 14 years. He was a dedicated constituency MP and I am sure that the whole House will want to join me in wishing Jim, his family and his staff all the very best for the future.
Paisley and Renfrewshire North is one of the most diverse constituencies in Scotland, with some of the poorest communities as well as some of the most affluent. My own home town of Renfrew is a royal burgh, and is known as “the cradle of the Stuarts”. It was also home to Scotland’s first municipal airport and the RAF’s 602 Squadron, rather misnamed as the City of Glasgow Squadron or Glasgow’s Ain. Unfortunately, Renfrew is also home to the constituency’s latest food bank—yet another symptom of the Tories’ ideological obsession with welfare cuts, which are hitting not only the poor and the vulnerable but hard-working families across Renfrewshire.
If we leave Renfrew and travel north-west towards Inchinnan, we pass the site of the battle of Renfrew of 1164. This relatively little known battle was actually one of the most significant civil battles in Scottish history. Somerled, the Lord of the Isles, gathered an army 15,000 strong and marched on King Malcolm IV’s forces. After a bloody fight, Somerled was slain on the battlefield alongside thousands of his followers before the remainder beat a hasty retreat The message that my hon. Friend the Member for Na h-Eileanan an Iar (Mr MacNeil) should take from that story is “Dinnae mess with Renfrew”. [Laughter.]
Just beyond Inchinnan we find the great new town of Erskine, which is the second largest town in the constituency no less. Indeed, a study by the Post Office last year declared that Erskine was the second most desirable postcode in Scotland to live in. As we continue westwards, we pass the charming village of Bishopton. On our journey down the Renfrewshire riviera, we come across the lovely riverside village of Langbank, which affords magnificent views down to the Firth of Clyde. On a clear day, Madam Deputy Speaker, if you crane your neck and have good eyesight, you may be able to see the obscenity of the Trident nuclear submarines as they slip and slither up the Clyde to Faslane. We were well aware of the shoddy safety standards in the handling and transporting of nuclear warheads long before Able Seaman McNeilly’s recent whistleblowing.
On 11 January this year, 50 mph gales were battering the west coast of Scotland. As a result, high-sided vehicles were warned not to cross the Erskine bridge over the Clyde. I am not sure about anyone else, but the very last thing I want driving over a 150-foot bridge during such high winds is a convoy loaded with nuclear warheads. Unbelievably, that is exactly what the Ministry of Defence chose to do. My colleagues and I will not only lead the fight for better maintenance and security of those weapons, but ensure that the voices calling for the complete abolition of those obscene and senseless weapons of mass destruction are heard loud and heard often.
My constituency includes a number of affluent towns and villages, such as Langbank, Crosslee, Bridge of Weir, Brookfield and Houston, although it should be noted that despite their relative wealth, those areas still have pockets of deprivation. Just outside Paisley lies Linwood, another area deeply damaged for generations by Thatcherite economics. The famous Linwood car plant, which provided work for 13,000 people at its height, had its Government support pulled and overnight the town was devastated. Parts of Paisley, including Whitehaugh and Ralston, are slightly more affluent but certainly not without their issues. Shortroods, Gockston, Ferguslie Park and Gallowhill all have pockets of deprivation but a people whose spirit is unbending in the face of Tory misery.
The House should note with deep regret and concern that the Paisley job centre has doled out the most sanctions in the west of Scotland; that sanctions across Renfrewshire have soared by 148% since 2010; that the demand for the aid of food banks in Renfrewshire has exploded by 1,763% since 2012; and that one in five kids goes to bed hungry each night. That is the legacy of the coalition Government, it is the record of this Conservative Government and they should be ashamed.
The Budget will do nothing to lift any of those people out of poverty. In fact, it will have the reverse effect. Countless children will, before long, find themselves living in poverty through no fault of their own, but I am sure that they will be comforted by the fact that the Government’s response to child poverty is to change the definition. This Government believe that if they fiddle the figures to show what they want them to, children and their families will—as if by magic—soon find themselves out of poverty and living a life of comfort. The message that came from the Chancellor last week was clear: do not work in the public sector; do not have children; do not be out of work; and do not, heaven forbid, be a young person.
Over the last few weeks I have received countless messages from constituents who are growing increasingly frustrated and angry with the Tory Government’s arrogance. The Conservatives, a party that was near routed in Scotland with the worst result in its history and with only one MP, deign to tell Scots that we cannot have what we voted for in overwhelming numbers. The Government must stop playing games with the Scottish electorate and devolve the powers as proposed, without caveat, without veto and without delay.
Rebecca Pow (Taunton Deane) (Con)
I congratulate the hon. Member for Paisley and Renfrewshire North (Gavin Newlands) on his maiden speech and painting such a clear picture of his constituency. I look forward to his contributions in the House, which I know will be feisty and campaigning—something that he seems to have been doing for most of his life. I also congratulate the other hon. Members who have made maiden speeches today.
I am delighted to speak in this debate to lend my weight to the general consensus on this side of the House that this was a positive and transformational Budget. It will move towards an economy in which the books will be balanced. We cannot pretend that the deficit is solved. It is still too high, which is why we need the Chancellor’s plan to continue to reduce it. I welcome the philosophy behind the Budget. It is all about changing behaviour and loading the scales in favour of people going to work, with the aim being to develop higher wages, lower taxes and a lower welfare economy. While there will be some time for adjustment, we cannot go on spending more than we earn, and we have to work to this new plan. The key tools for the success of this plan lie in raising the living wage and cutting welfare dependency, and I am delighted that the Leader of the Opposition seems to agree with us. It is a shame that her colleagues are not as enlightened as she is.
We cannot continue on a trajectory where nine out of 10 people claim welfare benefits. Some 1% of the world’s population live in the UK, but 7% of the world’s welfare payments are made here. That does not make sense, which is why, with care and sympathy, we need gradually to alter it.
Emily Thornberry
I read the statistics the hon. Lady has just trotted out in The Sunday Times. She draws an equivalence between us and the developing world, where, presumably, enormous amounts of benefits are not being paid. The fact is that we are part of the developed world. Would she like to compare us with other countries in Europe?
Rebecca Pow
The hon. Lady makes an interesting point, but my statistics still stand. Even when we make these changes, five out of 10 people will still be receiving some kind of benefit or tax credit. We always need to support the people who really need support, and the Conservatives will always do that. I spent Friday afternoon with my local citizens advice bureau, finding out and understanding what is happening and how we can continue to support the people who really need it. That will always happen.
Thanks to a shrewd Chancellor and the hard work of British business and the good people of Britain, Britain is now moving and growing faster than any other major advanced economy. It grew by 3% last year, as we have heard from other Conservative Members, creating 2 million more jobs—far more than the OBR anticipated. My constituency has played a major part in creating those jobs. Many businesses have grown and expanded. Unemployment is down and jobs are up. I will give just one example of a booming business: the Ministry of Cake in Taunton, which the Chancellor himself visited during the election campaign. Indeed, he iced a carrot cake.
The Ministry of Cake has recently secured a huge contract to supply cakes in coffee shops right across Europe, all the way to Moscow. It already supplies more than 1 million slices of cake a week to customers in the food service and the catering trade. It will now be employing another 30 people in Taunton, all of whom will be contributing to the local economy. This is exactly the direction we want the economy to go in. This example proves that it is. I would also like to say that the Chancellor is much, much better at handling the economy than he was at icing the carrot cake.
There is very little youth unemployment in Taunton: it is very low at 1.9% and it is continuing to fall. On Friday, I met a very fine example of the kind of young person who has been given the necessary skills to take our economy forward and is getting to work. Ashleigh Thompson was an apprentice at the local Creech St Michael preschool. For a year, she worked four days a week at the college and one day a week at the preschool. She has done her NVQ stage 3 and has just qualified. She has now got a full-time job at the preschool, because she is offering exactly the qualification and skills it wants.
George Kerevan (East Lothian) (SNP)
The hon. Lady mentions exports. The OBR report, published alongside the Budget last week, shows that our export position and current account deficit is forecast to worsen over the next four years. How does she explain that?
Rebecca Pow
I gave an example of exactly the opposite of that. Exports, all the way from Taunton, are increasing. That is exactly what we want: companies taking advantage of the opportunities opening up and skilling up their workers.
I would like to reflect on one of the important tools in the Budget box: the welcome introduction of a compulsory new national living wage for all working people aged 25 and over. It will kick in at £7.20 an hour in April next year, rising to £9 by 2020. It will mean a pay rise for half a million people and translates into a cash rise of £5,000 for a full-time worker. It will benefit women especially—we had the equality and gender pay gap debate the other day—and quite a number of women are still in the low paid category. This measure will help them. Of course, it is businesses that will have to shoulder the changes, but the increase in employment allowance and the improvements to corporation tax should help businesses to pay the extra wages. I have consulted widely with businesses in my constituency. They welcome this measure and they agree that we need to raise the living wage.
I welcome the £7.2 million investment in transport infrastructure in the south-west. In particular, I welcome the Prime Minister’s and the Chancellor’s commitment to upgrading the key road in my constituency, the A358, and its junction with the M5. This is the busiest road in Somerset. There will be a new employment site right on the junction, and without the road upgrade we cannot have the business site. We need the business site because we need the new jobs and the new skills to move the economy in the right direction. I therefore applaud all that, and I applaud the £10 million in the Budget to improve broadband in the south-west. It is absolutely imperative that all the rural areas that are missing out can take advantage and get broadband.
In conclusion, I welcome the Budget. It will transform behaviour and move us to a higher-wage and lower-tax and lower-welfare economy. It will cut the deficit and enable us, at last, to live within our means.
Catherine West (Hornsey and Wood Green) (Lab)
I am very pleased to be speaking in the Budget debate. The Chancellor’s announcement on the increase in the minimum wage, mistakenly called a living wage, raised the issue of low pay. That is a debate we all welcome. Sadly, when it is combined with high housing costs and cuts to working tax credits, families in my constituency will be worse off. I will not vote in favour of this Tory Budget. Not only will many families be worse off following the Chancellor’s Budget; it has failed to address the deeper issue of social mobility.
This was not a good Budget for young people. For younger people, it is becoming more expensive to attend further education or to secure well-paid employment, and it is much more difficult for them to get on to the housing ladder. The employment training levy, to be levied against workplaces, could provide much needed workplace training opportunities. However, coupled with the proposed cuts to further education due in the autumn, training programmes could be at risk—one step forward, two steps back. Converting student maintenance grants into student personal debt will increase the debt of our young students further. In one case I know of, a student will leave a local university with £56,000 of personal debt—hardly a good start to a career for a young professional.
Preventing under-24-year-olds from gaining access to housing benefit could lead to long-term homelessness problems among a small but needy group of youngsters— many of the rough sleeping population are in this critical age group—creating not just personal misery, but further cost to the NHS in later years.
The cost and availability of childcare is a major block to productivity, and in high value areas such as London it is becoming prohibitively expensive. Childcare cuts to Sure Start and children’s centres undermine the Government’s excellent 30-hour childcare commitment, slowing down parents’ return to work and preventing the return to work of much needed skilled workers. Assessments show that returning women to work in London would be a real spur to the economy. Unfortunately, owing to the prohibitive cost of childcare and lack of childcare places following cuts to Sure Start and children’s centres, we have a false economy.
Renting in the private rented sector is now prohibitively expensive. A family would need a household income of £75,000 per annum to rent a modest three-bedroom property in Finsbury Park in my constituency. This is unaffordable and represents a failure of the housing market to support local families. By spending such a high proportion of income on housing costs, people are unable to save eventually to get on to the housing ladder. The average age of first-time buyers is going up every year in London. We are becoming not just a city of renters, but a nation of renters. Many of our children are in low-quality, high-cost housing with no hope of remaining in the local area to look after us in our older age.
While some elements of the Budget, such as applying the brakes on buy-to-let property, might have benefits, they are undermined by a failure to announce more new affordable housing and by the regressive right-to-buy housing association discounts, which set us back decades on housing supply. We must address the supply issue; it is critical.
Furthermore, pay freezes in public sector employment will be bad for young people. We know we have a crisis in retaining teachers, particularly in English and maths. We know we have a problem retaining nursing staff in our A&Es and our local hospitals. This pay freeze for the public sector is detrimental. Unless young people have access to unlimited family funds for their education, housing and training, they face a bleak future under this Tory Chancellor.
Richard Fuller
The hon. Lady has listed a number of steps that would lead to an increase in expenditure to cover some of the important topics she mentioned. Does she accept, however, the overall need, while we are borrowing over £70 billion a year, to reduce expenditure more each year so we can get back into balance? Does she accept that general trend in principle?
Catherine West
Let me deal with aspects of the question of expenditure in turn. First, the employment training levy is being levied on small businesses by your Government. It is not a Labour proposal, but I support it because it is about investing in the workplace. Secondly, the position on student maintenance grants amounts to cost shunting—taking the costs from the university and putting them on to the individual. I referred to a case of a student owing £56,000, so instead of it sitting on the balance books of the Chancellor, it is sitting on those of the individual, which is a bad thing. Thirdly, we spent £60 billion on housing benefit over the last Parliament. We should have invested more of that in new build housing. We should not forget that council housing is not a cost. It is a net contributor to the economy because the rent is so low that housing benefit is not payable on many council properties. Housing benefit is mainly payable in the private rented sector. By investing in social homes, we will be saving the housing benefit bill in the longer term. Finally, on childcare, your own pledge by your own Government is 30 hours per week—
Madam Deputy Speaker (Natascha Engel)
Order. The hon. Lady must speak through the Chair, so she should be referring to the hon. Gentleman in the third person.
Catherine West
How did I forget that? Through you, Madam Deputy Speaker, I am saying that the Government have pledged to provide 30 hours a week childcare, which is an excellent pledge, but it is not a Labour proposal. In fact, Labour proposed something more modest and more affordable. I am thus a little worried that the hon. Member for Bedford (Richard Fuller) thinks that we are over-spending, when this is a pledge of his own Government. I wonder whether it will happen, though; I worry about the feasibility. If we go through all those elements, we find that they are not really about cost; they are about feasibility and getting the job done.
Mrs Flick Drummond (Portsmouth South) (Con)
May I say what a pleasure it is to speak in this debate on one of the most reforming Budgets we have had for a long time? It balances entitlements against responsibilities, and extends our economic plan even further into the years ahead—years of growth and stability.
In Portsmouth, we naturally all welcome the renewal of this Government’s commitment to spending 2% of GDP on defence. We face evolving threats as a nation, and I hope that when the strategic defence and security review has drawn its conclusions we will enhance our capability in important areas such as maritime patrol aircraft and the full Type 26 order, which we hope will amount to 13 ships.
I want to focus on the long-term impact of this Budget on my constituency. I am sure Members will agree that the infrastructure upgrades are vital for businesses and for boosting productivity. In Portsmouth and along the south coast, we have an opportunity for a “southern powerhouse”, but we have some infrastructure needs if we are to unlock the potential. A number of my hon. Friends, including the Exchequer Secretary, share my belief that we need to upgrade our rail connections on the line between Waterloo and the south coast. In many cases, the journey takes as long as it did in Victorian days. It takes one hour and 40 minutes to travel 70 miles, which is not acceptable in our modern days. I shall campaign on this issue and hope to speak to the Chancellor about building a faster railway down to Portsmouth. It is a challenging route with issues of capacity, but if we are to have investment in areas that already have a good level of service in the north, it is only fair that the real bottlenecks elsewhere are addressed, too. A high-speed train to Portsmouth via Eastleigh would benefit much of the south coast—from Weymouth to Chichester, and it would include the Isle of Wight, too. Portsmouth has been left behind, so we need support and further investment in our education and skills, and, most of all, we need some more aspiration.
I welcome the Budget’s emphasis on partnership working between central Government, local enterprise partnerships and councils. In Hampshire, we have Solent LEP and the promise of working with combined local authorities—probably for the whole of Hampshire—and I want to help drive this progress forward. We have benefited from investment in Portsmouth under this Chancellor. “Bridging the Gap” has helped small and medium-sized enterprises with £3.6 million, creating 600 jobs. It has helped a particular coffee shop in Southsea, which proved to be popular. Another £1.8 million from the Growing Places fund has helped infrastructure projects, including a centre of excellence in engineering and manufacturing advanced skills training. Maritime engineering is one of the centres of excellence in Portsmouth that I am hoping to push forward.
We also have massive investment in our dockyard to support the Navy, but there are still areas where we can and must improve over the coming years. I look forward to campaigning on these issues, making sure that Portsmouth and the south coast is well catered for in much of its infrastructure. I look forward to talking to the Chancellor over the next few years about all the issues that I want to put forward.
Madam Deputy Speaker (Natascha Engel)
Order. I shall change the time limit on speeches to seven minutes—Members have kept their speeches nice and short.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
That is good news, Madam Deputy Speaker, for someone who is always in a rush.
This is an illusion of a Budget of which even Dynamo would have been proud. Saying that it is going to make work pay defies all the evidence. Illusion No. 1 relates to the performance of the economy. The Government are borrowing £219 billion more than they anticipated in 2010, and there is a debt to GDP ratio of over 80%, when it was only 60% after Labour recapitalised the banks. Why is the economy at this level? Basically, because it was absolutely tanked under the coalition and that is now going to be carried forward under this Government.
In 2014, population-adjusted growth was 1.4% below its pre-recession peak, and in the first quarter of 2015 it was still below it, at 0.67% of the pre-recession peak. This reflects the particular issue that the Government have had with productivity, which is the second worst in the G7. Now that we have a productivity plan, will the Minister identify the specific measures that are going to support small and micro-businesses to access finance and to deal with all aspects of late payments, which are an absolute blight on small businesses? How is he going to harmonise taxation and make the tax system more consistent, particularly for self-employed sole traders?
Since 2008, nearly three quarters of the increase in all employment has been down to the increase in self-employment. According to Office for National Statistics data, self-employment has increased by nearly 40% since then, and is now at a 40-year high. There are many benefits from being self-employed: people get to be their own boss, and can choose when and where to work, but there are issues with taxation. We also know that the average income of someone in self-employment is half that of an average employee. It has fallen by 22% since 2008. Last year, Demos undertook research to establish the reason for the sudden increase in self-employment, and concluded that the level was artificially high because there were no jobs for people to move into, and people often moved backwards and forwards between employment and self-employment. There were no real jobs about. There is also the issue of false self-employment. Many large companies in the construction industry, for instance, sub-contract rather than employing brickies, joiners and plumbers. How will the Government deal with those issues?
Another illusion is that the Budget is fair and will make work pay. We know from an analysis conducted by the independent Institute for Fiscal Studies that the poorest 20% of the population will lose proportionally more of their income from tax and benefit changes than any other income group—between £800 and £1,300 a year—and that 3 million people are set to lose £1,000.
The increase in the national minimum wage is welcome, although it is not a living wage as the Government have tried to suggest. It is something, but it does not begin to compensate for the cuts in tax credits that will be suffered by the low-paid. Let me add to the examples that have already been given by many of my hon. Friends. The income of a lone parent with two children who works for 16 hours a week will increase by £400 a year, but that will be accompanied by a tax credit cut of £860, so that person will be £460 worse off. A couple with one partner working full-time on average income will lose £2,000 in tax credits, and will not benefit from the increase in the national minimum wage. According to data published by the International Monetary Fund last month, raising the income share of the poorest 20% of the population increases growth by 0.38% over five years. What the Government are doing will harm the chances of a sustained recovery.
Rebecca Pow
It is interesting to note that we hardly ever hear the word “business” mentioned by Opposition Members. It is businesses that must pay the £7.20 that may rise to £9, and that will cost many of them a great deal, but they agree that it is worth it to give people better living standards. Surely we can discuss some of those issues.
Debbie Abrahams
If the hon. Lady had listened to my earlier remarks, she would have heard me talk about small businesses then. I have done a significant amount of work with small businesses.
The Government are trying to persuade the public, and to justify what they are doing to working people. We know that, on the whole, it is working people who will be affected. Half the 13 million people who are living in poverty are in work, and two thirds of children in poverty are in working families. The Government are trying to construct a narrative to justify the tack that they have taken—the “divide and rule” narrative about people being feckless—but it is the working people who will be affected most.
Another thing that the Government regularly do is a source of immense frustration. Although I have consulted the Ministers’ code of conduct and many other sources, I have been unable to identify a responsible use of statistics on their part. The Chancellor, for example, tried to suggest in his Budget speech that we were one of the most generous welfare-spending countries in the world. That is simply not true. It is absolute rubbish. If we compare the UK’s spending as a percentage of GDP with that of developed countries in the European Union —as my hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) tried to do earlier—we find that it is ranked 17th out of 32.
Mrs Drummond
We are the fastest-growing economy in Europe. We are securing more jobs, we have higher employment, and our businesses are doing well. How can that be squared with what the hon. Lady is saying about the welfare state?
Debbie Abrahams
I dealt with that earlier in my speech.
In my constituency, more than 20,000 working families with nearly 30,000 children are claiming tax credits. That is two in three families, and three in four children. For them, tax credits mean keeping their heads above water. The changes in tax credits will be devastating for them and will undoubtedly result in an increase in child poverty, with a knock-on effect on those children’s educational attainment, health and life chances. The worsening inequalities are set to become intergenerational.
I must also mention the impact of the £30-a-week cut in additional support for people in the employment and support allowance work-related activity group, which is another punitive measure affecting extremely vulnerable people. The Disability Benefits Consortium believes that the 300,000 disabled people who are already living in poverty will be pushed further into that condition.
Finally, let me say something about housing policy, the inheritance measures and wealth inequalities, especially in the context of land and property. In 2002, it was estimated that 69% of land in the United Kingdom was owned by 0.6% of the population. In the six years to 2011, the number of landholdings had been reduced by 10%, but the size of those holdings had increased by 12%, so even fewer people owned even more land. The inheritance tax measure is but a drop in the ocean when it comes to addressing the concentration of wealth that is held by a tiny elite. Many people who are involved in housing policy emphasise that if we are to solve the housing crisis as well as building more homes, we must tackle the cost and availability of land and the volatility in the market. Given that the average house price in the United Kingdom is more than £180,000, it has been estimated that it will take 22 years for people with low and middle incomes to save up a deposit.
Mark Pawsey (Rugby) (Con)
It is a great pleasure to speak in the debate, and to follow the hon. Member for Oldham East and Saddleworth (Debbie Abrahams), who told us in her opening remarks that under this Government, and the coalition before them, our economy had tanked. Well, if growth of 3%, 2 million new jobs, and a fall in borrowing from a staggering and unsustainable £153 billion a year to just half that constitutes an economy that has tanked, I would hate to imagine how she might describe what happened under the Labour Government in the run-up to 2010.
It is also a great pleasure to see the Minister. I look forward to the considered and thoughtful remarks that I know he will make when he winds up the debate.
I want to focus on the steps that the Government are taking to grow the economy. As we know, we saw record growth of 3% over the last 12 months. We had become used to seeing “flatlining” gestures from the Opposition Front Bench, but we do not see those any more, not least because the person who used to make them is no longer present in the Chamber. We shall see 2.6% growth over the coming year, and it is important for us to maintain that growth, because the Government are doing two things. As any business, household, council or other organisation would do, they are controlling their expenditure —we have heard a lot in earlier Budget debates about how the Government are doing that—but it is also massively important for them to grow their revenues, and they do that when the economy is growing. That is why it is so important for them to focus on growth.
I want to focus on the measures the Government are introducing to grow the country as a whole through the governance of its cities, and on the more flexible planning system.
George Kerevan
I rise to intervene on the hon. Gentleman, as I do on all Conservative Members, in the forlorn hope that he might address the worsening trade picture and the fact that we have to borrow to fund our imports. The Government are shifting the burden of debt from the Treasury on to the private sector, and particularly on to foreign borrowing.
Mark Pawsey
I am sure the hon. Gentleman is aware of the principle of reshoring, which is taking place in our economy right now. Manufacturing companies that years ago were offshoring and sending jobs out to other countries are now making products in the UK. In Coventry, which is immediately adjacent to my constituency, I visited a small company that is producing the rechargeable torches that sit in every Range Rover. Until recently they were being imported from China. Now they are being produced in the UK. We are slowly bringing manufacturing back to the UK, which will in time deal with the issue that concerns the hon. Gentleman and which is, of course, a concern for the Government.
Mark Pawsey
No, as I want to talk about rebalancing our economy and ensuring that we get effective growth in the regions outside London, which has a momentum of its own.
The Government are looking closely at what is happening in Manchester, and that is the model they want to see. It is very good news that new combined authorities are coming together across the UK to provide the growth that the country needs, because the cities are of massive importance.
Mr Alan Mak (Havant) (Con)
My hon. Friend will no doubt be aware of the recent World Economic Forum report on global competitiveness which places Britain one place above its ranking of last year, praises the Chancellor’s deficit reduction and cites our stronger regional growth. Does my hon. Friend agree that the stronger regional growth and sustained investment in our cities, regions and counties is important for the years ahead?
Mark Pawsey
Absolutely, and I am pleased that the urban conurbations are coming together in combined authorities across the country.
I am also pleased that the Government have received combined authority proposals from two local authority groups in the east midlands. The Derbyshire consortium has 10 councils including the county council and city council, and the same process is under way in Nottinghamshire.
As part of that process, the Government are right to insist on a directly elected mayor for each combined authority so that there is a figurehead for the body being created. I have tried to put myself in the position of an overseas investor who arrives in Manchester or Birmingham wishing to invest in the region. I would want to understand who is the titular head of the body and who is ultimately responsible. A directly elected mayor goes some way to addressing that.
Mrs Drummond
Does my hon. Friend agree that the decision in the last Parliament to create single pots for infrastructure projects such as those determined by the local enterprise partnerships has shifted power, which has been crucial to places such as my area of Portsmouth and his of Rugby?
Mark Pawsey
Absolutely. The shift of power from the centre out to the regions is massively important and I will talk about the importance of local enterprise partnerships shortly, but first I want to talk about the impact of combined authorities in my part of the country.
Even though Rugby is right in the middle of the country, under the old regional development agency model we were placed in the west midlands because Warwickshire was put in the west midlands. However, my town’s economic links are much closer to places such as Lutterworth and Leicester in Leicestershire and Daventry and Northampton in Northamptonshire. In so many instances we in Rugby look east rather than west. That is one reason why I have some concerns about the developments in the west midlands. It is entirely right that the urban area of the west midlands—Birmingham, Solihull, Walsall, Dudley, Sandwell and Wolverhampton—comes together. I ran a business in Rugby, and we looked at that block of authorities as one big market. In fact we did not know where one authority ended and the other started because to us it was one big market.
Mark Pawsey
I will carry on, if I may, as other Members wish to speak and I only have a little time left.
It is entirely right that those authorities come together in the midlands engine, but I note that Coventry, a city almost in the centre of Warwickshire and surrounded almost entirely by Warwickshire, wants to join that combined authority. I do not think the people of Warwickshire have made a sufficiently strong case to both the people and local politicians of Coventry for the merits of Coventry remaining within Warwickshire. To take up the comment made by my hon. Friend the Member for Portsmouth South (Mrs Drummond) about the role of the local enterprise partnership, my local LEP is called the Coventry and Warwickshire LEP. It is a natural economic unit, and I would like more thought to be given to the possibility of Coventry and Warwickshire working together as a combined authority. I say to the people of Coventry—to Coventrians—that it is not too late and there is no automatic reason why Coventry needs to join the west midlands combined authority. One of my selfish reasons for having concerns about that is that if Coventry joins that combined authority, Warwickshire may feel a need to do so, too. I have already explained that my authority’s links are closer to the east midlands than to the west midlands. I hope it is not too late to have a further look at this matter.
All that raises the issue of the role of two-tier authorities within the move to combined authorities. Some challenges for government will emerge where we have a two-tier authority and the upper tier wishes to go in one direction and the lower tier—the district councils—wishes to go in a different one. It is entirely right that both tiers are talking to the emerging west midlands combined authority, but I am keen that in my part of the world, Rugby, we continue to talk also to the districts and counties on our eastern flank, because our relationships with that area are so strong.
I wish to make one or two quick remarks about the changes the Government are making to the planning system. It is entirely right that we make it easier for businesses to grow. Housing development is a very substantial part of economic growth and we want to make it easier for people to build new houses. I am very proud that in my constituency we are doing entirely that, with two substantial housing development sites coming forward.
Madam Deputy Speaker (Natascha Engel)
Order. Before I call the next speaker, may I say that since I raised the limit everybody has taken the maximum number of interventions and therefore we are getting a bit pressed for time again? We will leave the limit at seven minutes, but may I just ask everyone to keep interventions to a minimum and make them short? If we do that, we might get there.
Sue Hayman (Workington) (Lab)
I am delighted to speak in today’s debate, during which we have heard many excellent maiden speeches. Since being elected to serve as MP for Workington, I have been privileged to meet many young, hard-working people who only want to do well in life and make a positive contribution to the communities in which they live. For example, this coming weekend I am proud that I am going to be presenting the awards at the Gen2 graduation ceremony, celebrating the achievements of students in engineering and other technical disciplines.
I want to draw attention to the particular and disproportionate impact the Government’s Budget proposals will have on young people—I want to ask the Minister what he thinks young people have done to deserve such a kicking. It is truly shocking that they are going to be bearing such a heavy load in these Budget proposals, which mean that they are increasingly going to be paying to support the older generations, who are better off than they are. The Budget divides young from old, as well as rich from poor, and will do nothing but drive down young people’s aspirations in my constituency. Young people are three times more likely to be unemployed in the UK than they are in Germany, and for those who are in work this new “national living wage” will be paid only to those who are over 25. That is unacceptable, as it leaves younger workers on a much lower salary for doing the same job. Young people who have children will be particularly hard hit, as their benefits will be deducted far more quickly than their earnings will be increasing.
On top of that, young people who aspire to climb the ladder out of poverty and go to university will now be thinking twice, because the student maintenance grant is going to be scrapped and replaced with yet another loan, only creating more debt for our poorest families.
Let me move on to housing. There is a crisis in housing in our country, particularly in affordable housing—both to buy and to rent. Instead of looking at real sensible solutions to support young people into their own homes, this Budget will stop housing benefit for those under the age of 21. The implications of that are enormous. I do not know whether the Government have properly thought through this policy. In my constituency of Workington, one local housing authority, Impact Housing, has estimated that it will lead to an extra 200 young people becoming homeless. My constituency does not particularly have a homeless problem, and I do not want to see the Government create one, thank you very much. The proposals talk about exempting vulnerable people, but I ask the Minister how he will assess who is vulnerable. Why should they be assessed as vulnerable?
Hannah Bardell (Livingston) (SNP)
I am listening carefully to the hon. Lady, and I agree with much of what she is saying. Does she agree that limiting families to only two children and putting women in the position that they have to declare whether or not they have been raped to justify benefits for a third child is both dangerous and divisive? We need much more detail and discussion on that matter and on other areas of the welfare proposals.
Sue Hayman
I could not agree more.
The Government are interfering in how people live their lives and in how many children they should have. It is not for the Government to dictate to people how many children they can afford to have. People should be able to make that decision themselves. What if people’s circumstances change after they have had their children? How does that work?
Sue Hayman
No, I wish to finish my point. I was talking about vulnerable people. I know that the proposals suggest that vulnerable people will be supported. I asked about how vulnerable people will be assessed. The people whom I am really concerned about are those who do not quite meet the vulnerability criteria. They cannot afford the rent, but they are not classified as vulnerable. What happens to them? Do they then become homeless as well? The Government have not considered the fact that not everyone can move back with their parents and that not everybody has friends and relatives who can give them a home. It is wrong that we have a Budget that will increase homelessness. That is my point.
Let me return to the fantastic work that young people do in my constituency. I am talking about the apprentices and the students who work hard to get on in life. In my experience, most young people want to get on in life and be part of society. This Budget offers little encouragement in that regard, which is why I believe that it should be condemned.
Martin Vickers (Cleethorpes) (Con)
Before I start my comments, may I respond to the points made by the hon. Member for Workington (Sue Hayman)? Towards the end of her speech, she referred to a more positive outlook for younger people. That outlook is something that I hear about from young people who are training for apprenticeships, or who are attending the local further education colleges. They have a much more positive view. They can see the opportunities that have been created in my part of the world, which is, to a great extent, thanks to the investment in the offshore renewables sector. These young people have a vision of the future and can see the opportunities, and we should do all we can to support them. Of course, in our constituency work, we come across those who face challenges and significant problems. There will always be those people in our communities and we should do everything possible to help them. Certainly, the policies that I have picked out from the Budget do exactly that.
Two specific aspects of the Budget benefit my constituency. First, the coastal communities fund is being topped up. I was at an event on Friday evening with Amanda Austin, a businesswoman who manages the major shopping centre in Grimsby, next door to my constituency. She had already downloaded the application forms for the coastal communities fund. She had a scheme in mind and she could see how we could take advantage of that in the Cleethorpes area.
Secondly, the extension to the enterprise zones is particularly welcome. The largest enterprise zone in the country is a cross-Humber one, which partly takes in my constituency. We have attracted considerable businesses. Able UK, which is investing hundreds of millions of pounds in my constituency with the Humber marine energy park, has just signed a deal with Dong Energy, which is already a significant investor in the area. It is anticipated that 1,000 jobs will result from this deal. It involves manufacturing, which we want to expand in our economy.
Fiona Bruce
I thank my hon. Friend for referring to the speech of the hon. Member for Workington (Sue Hayman). Does he agree that she seems to have forgotten that under her party’s Government there were over 1 million young people who were not in education, employment or training, and that this Government have radically improved that, to the benefit of young people in this country?
Martin Vickers
My hon. Friend makes an important point. In my constituency I can see the reduction in the number of NEETs and the increase in the number of apprenticeships. Opportunities for younger people are increasing all the time.
Coming as I do from a working-class background, I am keen to see the initiatives in the Budget that boost working-class people—blue collar Conservatives, as we tend to call them. Opposition Members are in total confusion about whether to accept the welfare cuts. No one can say that they were not flagged up during the election campaign, and the people of the United Kingdom voted overwhelmingly for a Government who would implement them, make the welfare system fairer and allow—[Interruption.] I take the point from the Scottish National party Benches, but we are still a United Kingdom, thankfully. Even the Scottish people voted in favour of that. The Budget must be judged as a package. Yes, there are those who will be hit by the changes to tax credits, but that is offset to a considerable extent by, for example, the changes to personal allowances.
On devolution, I have for many years been an advocate of elected mayors, and I am pleased to see that, as things go full circle, the Government are promoting that idea. An elected mayor is a figurehead, another ambassador for our areas, someone who can go out there and sell our constituencies. I would prefer a much more radical devolution and settlement for local government, but the Government have outlined a clear policy. I was at a cross-party meeting last Friday with the Humber MPs, and we can see a consensus emerging among Members. I hope that will be copied—
Martin Vickers
I am running short of time so I will not, if the hon. Gentleman does not mind.
The way that local authorities are beginning to come together and recognise the advantages of what is on offer from the Government suggests that they will move towards a system of combined authorities. Personally, I would prefer to see unitary authorities rather than combined authorities and economic authorities, but at least it is a step in the right direction.
I have some reservations—for example, in relation to planning. As we all know, planning is very controversial. It is an issue on which we must take our communities with us. If, as in the case of most of my constituency, which falls in a local authority area where there is no local plan and it is years before we will have one, the people, through the democratic process, must have some sort of opportunity to put their case.
Mark Pawsey
Does my hon. Friend agree that when a local authority has been incredibly slow to bring forward a local plan, having had many years’ notice that it needs to be done, it is entirely right for the Government to say, “Look, if you don’t do it, we will”?
Martin Vickers
I entirely agree, and I am glad to see the Government being much more proactive in that regard. Equally, whether it is the Government or the local authority, they must take communities with them. For many years I have advocated giving those who object to planning developments a right of appeal in certain limited circumstances. One such circumstance should be when no local plan exists, because that means the democratic process has let those people down.
The other thing that I have reservations about is Sunday trading. Personally, I do not want to see Sunday trading extended. It is an uneasy compromise that we have at the moment. I do not want to turn the clock back to the Sundays of my childhood, when the most exciting thing to happen was “Two-Way Family Favourites” followed by “The Navy Lark”, but the rush to allow superstores unlimited opening is detrimental. Our lives have a certain rhythm, as does the week, the month and the year. I think that we are losing something from family life, and from the support that we have given to small traders.
John Mc Nally
We are trying to encourage small companies, in particular, to create more apprenticeships and jobs. Does the hon. Gentleman agree that legislation needs to be tightened to get bigger companies, instead of delaying payments, to make payments quicker so that small companies can trade in a better position?
Martin Vickers
The hon. Gentleman makes a valid point, but I have only 48 seconds left and so will race through the other points I wanted to make.
Members across the House support our high streets, or at least they pay lip service to the idea of supporting our high streets. Many small shops, such as convenience stores, rely upon the extra cash they get in the till on a Sunday, which is thanks to supermarkets being limited to six-hour opening. I know that the Government will say that it is up to local authorities, but I would like to see that proposal removed.
Madam Deputy Speaker (Natascha Engel)
Order. I apologise to those Members who are still to speak, but we have had the maximum number of interventions and the maximum time for speeches, so the time limit will now have to drop to six minutes.
Richard Burgon (Leeds East) (Lab)
When I think of this Budget, I think of my constituents who will be hard hit by the measures it sets out; measures that were cheered to the rafters by the Conservative party, led in fist-pumping style by the right hon. Member for Chingford and Woodford Green, known to my more polite constituents as Iain Duncan Smith.
This Budget is bad for the economy and bad for the poorest, whether working or not, in my constituency and in our society. It takes money from the poorest in society and hands it to the wealthiest. Do not just take my word for it; criticism and concern has ranged from the TUC and major trade unions to Citizens Advice, the Joseph Rowntree Foundation and Barnardo’s, and from the Institute for Fiscal Studies to the Local Government Association and the Federation of Small Businesses. For example, Paul Johnson of the IFS has said:
“In general the more important tax credits are to someone’s income at present the less likely they are to be compensated by the higher minimum wage”—
note that he refers to the minimum wage, not the living wage—
“But the key fact is that the increase in the minimum wage simply cannot provide full compensation for the majority of losses that will be experienced by tax credit recipients. That is just arithmetically impossible.”
This Budget negatively affects a majority of the population. The IFS says that 13 million people will lose out through the freeze in benefits and tax credits. This Budget is bad for people in my constituency of Leeds East, where the cuts to tax credits will hit an overwhelming majority of families. In Leeds East there are 9,600 families with children claiming tax credits, 6,100 of whom are working families, with 12,600 children affected. The scale of the impact in my constituency and constituencies like it across the country should make Conservative Members ashamed. Sixty-seven per cent.—two thirds—of families in Leeds East receive tax credits, while 75%—three quarters—of children are in families receiving tax credits. This is an attack on the incomes of the poorest while helping the wealthiest.
Freezing benefits for four years and cutting tax credits will reduce real incomes. The Joseph Rowntree Foundation makes it clear:
“For those out of work, especially childless adults, it will further widen the distance between their incomes and what is needed to achieve an even basic standard of living. This is of course deliberate, in that the aim of the Government is to sharpen work incentives for those not currently in work.”
Citizens Advice says that
“a government serious about making significant savings to the welfare bill needs to tackle problems at the source including insecure work and failures in the housing and childcare markets...Cuts to welfare including freezing benefits for four years, lowering income disregards and work allowances, and cutting tax credits will all have a very serious impact on many people’s ability to meet day to day costs.”
I have to mention George Osborne, the Chancellor—
Madam Deputy Speaker (Natascha Engel)
Order. I say this in the spirit of helpfulness. We name Members not by their names but by their constituencies. This is the second time that the hon. Gentleman has done it, so I ask him to use the constituency or job title—“the Chancellor” will do.
Richard Burgon
The Chancellor’s so-called living wage is a con. He claims to be giving Britain a pay rise but his living wage premium is actually a new minimum wage undercutting the rate proposed by the Living Wage Foundation.
Quote after quote that I now do not have time to go into sets out the reality of the Government’s Budget. Many measures, as other Members have mentioned, are an attack on the hopes of young people. They include excluding under-25s from the so-called living wage, preventing young people from living independent lives by cutting their access to housing support, and abolishing student maintenance grants for the poorest and raising university fees. What we needed to hear in the Government’s Budget was a call for investment to publicly deliver affordable social housing, access to well-funded further and higher education, and new jobs and apprenticeships with better pay that would allow people to live decent and stable lives.
People in my constituency and areas like it across the country are not a priority for this ultra-Thatcherite Government. They talk about a northern powerhouse, but we need only look at what is happening with trans-Pennine electrification. They are cutting funding for infrastructure in Leeds and in the north. They talk about devolution, but I and many others fear that the real aim is to devolve the blame for the national Government’s austerity economics. We must not give up fighting against what is being done to my constituency and areas like it by this Government, who are all about siding with the rich and the powerful. I look forward to carrying on fighting, alongside Labour colleagues, campaign groups and trade unions, against this Government’s cruel plans and for a better society.
Mr Alan Mak (Havant) (Con)
It is a great pleasure to follow the speeches by my hon. Friends the Members for Rugby (Mark Pawsey) and for Cleethorpes (Martin Vickers). It is also a great pleasure to welcome my fellow Hampshire Member of Parliament, my hon. Friend the Member for East Hampshire (Damian Hinds), as Exchequer Secretary. I congratulate my hon. Friends the Members for Chippenham (Michelle Donelan), for Somerton and Frome (David Warburton) and for Southampton, Itchen (Royston Smith) on their outstanding maiden speeches.
I am grateful for the opportunity to speak in this debate on the summer Budget. It is a Budget that rewards hard work and aspiration, not just in London but across every region of our great United Kingdom; backs working people by cutting their taxes, boosting their wages, and clamping down on the abuse of the welfare system that they help to pay for; and strengthens our public services while backing our armed forces. I am proud to speak in support of this Budget not just because of those positive attributes but because it is a Budget that builds Britain’s opportunity society.
Although bolstering Britain’s economic growth and giving working people financial security is rightly this Government’s most pressing priority, building the opportunity society must and will be their most distinct legacy. Alongside our long-term plan for a stronger economy, for me this Budget signals our renewed commitment to a long-term plan for a stronger society. That society should be one in which everyone can fulfil their potential, no matter what their starting point in life, because what counts towards their success and prosperity in the opportunity society is how hard they work, the talents they have and the ambitions they hold, not who their parents were, where they grew up or what sort of school they went to.
This Budget gives fair chances to everyone across the entire spectrum of society, young and old, and across every region of our great country, north and south. That is vital, because building an opportunity society gives us not only a stronger, fairer, more prosperous economy at home, but a more competitive economy abroad.
George Kerevan
Will the hon. Gentleman explain why, if we are exporting, the OBR has downgraded its forecast for the current account deficit for the next five years?
Mr Mak
I shall come to that point later in my speech.
This Budget builds the opportunity society, which is important because in the global race for success, Britain cannot afford to waste the talents of anyone in this country. Last year, the Sutton Trust estimated that improving social mobility, including by getting people back to work, could add up to £140 billion to our GDP by 2050.
This Budget helps to build on the Government’s track record during the past five years, when 1,000 jobs were created every day, the deficit was cut by half as a share of GDP, 2 million apprenticeships were created and we enjoyed the highest growth of any developed country—higher than France, Germany or America. It is therefore no surprise that the latest World Economic Forum global competitiveness index report places Britain ninth in the world, which is up from our position last year and ahead of competitors such as France, Canada, Australia and Ireland. The Budget builds on and locks in the growth that we have sustained during the past five years. It helps Britain to move from a high-tax, low-wage and high-welfare economy to a higher-wage, lower-tax and lower-welfare country. It delivers a stronger society at home, and it gives us a more competitive economy abroad. Conservative Members share an abiding faith that individuals and businesses flourish when they have control over their lives, so I welcome this Budget.
John Mc Nally
I rise to make the same point again. Does the hon. Gentleman think that legislation will stop the farcical situation of big businesses delaying payments to small businesses? A small company wanting to grow ends up having to chase bigger companies to get the money they owe, which frustrates its wish to employ apprentices. Does he agree that we need to tighten up the legislation on that?
Mr Mak
The hon. Gentleman will know that the Government are taking decisive action to ensure that small firms are not punished and penalised when larger firms delay their payments. I come from a small business background, so I fully understand the challenges that that poses. What the Budget does for businesses is to lock in the growth and success that we have had during the past five years. I have talked about apprenticeships, and I will come on to the cut in corporation tax later.
I welcome the Budget because, ultimately, it keeps working people in work and allows them to keep more of the money they earn. The rise in the tax-free personal allowance to £11,000 from April next year means lower taxes for about 45,000 working people in my Havant constituency, and an estimated 750 people will be taken out of income tax altogether. That is what the opportunity society Budget looks like on the ground, and it is one that I am proud to support.
At the same time, lowering the welfare cap sends out the clear, distinct and unambiguous message that a life dependent on welfare and benefits, funded by those who work hard and do the right thing, is no longer an option. Our welfare reforms also send a strong signal that modern Britain will be a lean, nimble and productive economy that not only pays its way in the world, but asks each and every one of us to contribute where we can.
Although no one must be held back in our society, it is equally right that the Government do not allow anyone to be left behind as we run the global race for success. In other words, we want everyone who can contribute to be on the field of play, not watching from the sidelines. In particular, our Budget gives 18 to 21-year-olds a clear path from welfare and into work. I welcome the new earn or learn youth obligation and the ending of the automatic right to claim housing benefit. At the same time, the new apprenticeship levy for larger employers will ensure that our ambitious and successful apprenticeship programme gets the funding it deserves.
In addition to those structural policy reforms, Britain’s place in the world economic order and our ongoing national prosperity are dependent on our regions, cities and counties doing just as well as our capital city. In my Havant constituency and the wider Solent region, we are heartened that the Government are committed to rebalancing the economy and bringing local growth to every part of the UK, whether by building a northern powerhouse or supporting important regional economies in the midlands, the south west or the south coast, where my constituency is based.
The summer Budget confirms that the Government are working towards further devolution deals, for example with metro areas such as Sheffield, Leeds and Liverpool, to boost local growth. I can confirm to my right hon. and hon. Friends on the Treasury Bench that in the Solent region all our councils support more devolution of powers to our county of Hampshire. I am personally committed to working with them to use any new powers to boost local economic growth and raise living standards.
I am very pleased to be working with my hon. Friend the Member for North East Hampshire (Mr Jayawardena) to create a new all-party group to champion Hampshire’s economic growth, and I look forward to working with other Members, particularly my hon. Friends the Members for Portsmouth South (Mrs Drummond) and for Fareham (Suella Fernandes), whom I can see in the Chamber. We are all committed to regional growth in our county for the greater prosperity of our citizens. That will help Havant to build on an already impressive record of growth, with exciting plans for local economic development being implemented. For example, at the Dunsbury Hill Farm development, a 50-acre stretch of farmland is being redeveloped with support from the Solent local enterprise partnership to become a new modern business park, driving local growth. We anticipate up to 3,500 new local jobs as well as investment in infrastructure such as local roads. The Solent LEP has been awarded £125 million in vital funding from the local growth fund for exactly that purpose.
Elsewhere in Havant, Langstone Technology Park and the Solent Retail Park are both booming. Business is coming to Havant. Businesses that relocate to Havant—and I urge them to do so—will benefit from a range of measures in the Budget designed to help businesses and our local economy. Corporation tax, already the lowest in the G20, will be cut to 18% over the course of the Parliament and the annual investment allowance has been put at £200,000 on a permanent basis.
The Government’s continued commitment to hard-working people and supporting local growth also means that unemployment in my constituency fell by 48% between May 2010 and May 2015. Those are people who have moved from welfare into work. They are playing a key role in Britain’s economy and our opportunity society.
The Government rightly put security at the heart of our manifesto and of this summer Budget. That means economic security, financial security and national security. The most important thing for me is the social security not of a life on welfare but of giving opportunities to people to work hard and make a better life for themselves.
Wes Streeting (Ilford North) (Lab)
It is a pleasure to speak in the debate and to follow so many hon. Members who made excellent maiden speeches.
This is a Budget that puts politics above economics, which we have seen reflected on subsequent days in the interventions from those on the Treasury Bench and the very well read interventions from the Whips’ briefings from those on the Government Back Benches.
I want first to turn to the constant myth we hear about the record of the previous Labour Government. We are told time and again that that Government were somehow profligate, which led to the crash of the economy—[Hon. Members: “Yes!”] Government Members say yes, but it may interest them to know that public spending accounted for about 40% of gross GDP under Thatcher, 38% under Major and 37% under Blair and Brown. In the 10 years of Labour government leading up to the crash, we had cut the deficit and the national debt—[Interruption.] Since Members on the Treasury Bench are so exercised, perhaps they can tell us why, if our spending plans were so bad, they backed them pound for pound until the crash; or whether they accept, as they should, that the mess we find ourselves in was actually the result of the banking crisis, in which the state had to nationalise a huge amount of private debt.
When has the Conservative party ever been the party to which we turn in the case of weak regulation? Where were the calls from the Conservative Opposition during years of Labour government to tell us that City regulation was insufficient? We did not hear those cries. There was a banking crisis; it was not the result of the previous Government. It is understandable that Government Members want to perpetuate the myth to entrench their political position, but that is about politics rather than economics. Having listened to the Chancellor’s Budget speech and to the speeches of Government Members in the days following it, I know that there is absolutely no way that the Conservative party can claim to be the party of the worker, and it seems that its blue-collar modernisation is already dead in the water.
We are told that somehow the Conservatives are the champions of high pay. Why is it, then, that when they talk about a national living wage, what they actually mean is an increased minimum wage? And why is it that, come 2020, that so-called living wage will be less than the London living wage that employees are being paid today?
Why are the Conservatives attacking working people on tax credits? If the Government were serious about lifting people out of poverty through work and pay, they would need to increase the living wage to about £12.65 an hour to account for their cuts to tax credits. When difficult choices are being made, it cannot be right to target people who are doing the right thing by going out to work hard every day—sometimes in several low-paid jobs—or to cut their tax credits and perpetuate the myth that somehow they are being helped by the introduction of a national living wage that is nothing of the sort.
This Budget and Chancellor are overlooking some of the major issues that need to be addressed if we are serious about a so-called long-term economic plan. The Chancellor is only interested in his own political position, and he is ducking the big question about Britain’s membership of the European Union. If he is serious about Britain’s place in the world and about our future economic prosperity, he should be leading the argument to stay in Europe. Instead, like so many of his Cabinet colleagues, he sits on the fence and perpetuates the myth that some big renegotiation is coming along.
The Chancellor is also ducking the big issues on infrastructure. He has already cut the power from the electrification of the railways, and he is also ducking renewable energy and more housing, which, by the way, would be the best way to cut the benefit bill. It would be fantastic if we saw a house building programme that cut the amount we are paying, not to those claiming housing benefits but directly to landlords. That programme would be an effective way to reform welfare, but it did not feature in the Budget.
Another issue is Heathrow, which has huge potential for the London economy and for people in my constituency, who will have the benefit of Crossrail to get to the jobs that will potentially flow from Heathrow. As usual, however, the Government are sitting on the fence because they do not want to tackle the big issues.
There are a number of other issues with this Budget that I wish to raise in the limited time I have left. It cannot possibly be right that people who are unfit to work, including people receiving treatment for potentially life-threatening illnesses, will be penalised by this Government’s welfare measures. Other hon. Members have already asked about the test for vulnerability, and I hope that that issue will be addressed in the Finance Bill Committee.
It cannot possibly be right that this Government will cap the aspirations of students from the poorest backgrounds by making sure not only that they graduate with record levels of debt, but that, through the other changes to higher education student finance, it will be the lowest-paid graduates who are hardest hit while the highest-earning graduates, who are still disproportionately from wealthier families, will take longer to repay their debt. Surely that cannot be progressive.
Finally, there can be no greater evidence of this Government’s shallow commitment to dealing with some of the deep structural problems of our low-pay economy than their pretence that they are tackling child poverty when in fact all they are doing is tinkering with the measures. The hon. Member for Rugby (Mark Pawsey) talked about the flatlining gesture. We may have tepid growth now, but one thing that is certainly flatlining is the progress that was being made to tackle child poverty. It is an absolute scandal that in the days after the Budget, Government Members have continued to justify their child poverty measures. This Budget will make child poverty worse; it does not do what the Chancellor says it does; and there is certainly no evidence whatever in it that the Conservative party is the party of the worker.
Suella Fernandes (Fareham) (Con)
I thank the hon. Member for Ilford North (Wes Streeting) for his passionate speech; I do not agree with many of his points, but I admire his passion. I also thank my hon. Friend the Member for Havant (Mr Mak) for a good speech about the opportunity society, and other hon. Members for the excellent maiden speeches we have heard today, in particular that by my hon. Friend the Member for Southampton, Itchen (Royston Smith). I helped him during the campaign and I was thrilled by his victory on 8 May.
At its heart, this Budget is about opportunity, endeavour and responsibility. Those are my core values—the values that make me a Conservative. This Budget is not only about aspiration, but it underpins the truth that the Conservatives are the real party of working people. It aims to create a Britain where everyone has the chance to prosper through earning more, paying less taxation and having free innovation. Those are the kernels of aspiration. The rise in the minimum wage, the increase in the tax-free threshold and the rise in the 40p tax threshold will all contribute to a fairer society, where aspiration is a reality for millions of people. Key to that aspiration, opportunity and growth are productivity and a skilled workforce that are local to the workplace. The need for increased skills will be key to transforming the efficiency and growth in our economy.
My constituency of Fareham on the south coast has an economy of more than £2.5 billion gross value added, 1.3 million people, 50,000 businesses and thriving marine, aviation and aerospace sectors, with high technology and advanced skills and engineering.
George Kerevan
The hon. Lady mentions the aerospace industry. Can she name one airliner that this country still builds?
Suella Fernandes
I am very proud of the local aviation and aerospace industries. My constituency has Eaton Aerospace and the neighbouring Portsmouth constituency has BAE Systems—key British companies that are exporting and are at the cutting edge of the aviation and aerospace sector, thanks to lots of investment from central Government.
Solent local enterprise partnership, which I met today, benefited from the local growth deal, receiving more than £150 million of Government funding over the last Parliament to boost skills, improve infrastructure and provide better business support. That increase in higher skills has allowed Solent LEP to set a target of increasing GVA by 4%. Key to that target is an increase in the amount of housing. We need houses to accommodate the increase in the workforce and the employment base.
My constituency has a strategic development area called Welborne, which has been controversial. It will consist of 6,000 new homes, create 6,000 new jobs and contain 1 million square feet of employment land, which will enable growth and facilitate enterprise to take flight. It has been approved by the local council and the Planning Inspectorate. It is a huge opportunity for investment. It will be funded by £50 million from the new homes bonus—a great initiative that was brought in by the Conservative-led coalition—and £2 million from Solent LEP. There is currently a £30 million shortfall, but I hope that will be filled by central Government.
The problem with housing is not supply and demand; it is that the market lacks fluidity. Throughout the course of a life, someone might start off in a student flat, want to expand into a family home, get a larger home and then downsize in their old age. We do not currently have that fluidity, but the Budget addresses that.
We need to enable the ownership of housing. Ownership is more than just a name on a contract; it enables people to have a stake in society and, in many cases, something to hand on to their children. A key to that is enabling capital and equity. Those kernels of home ownership, responsibility and a stake in society are at the heart of our robust and bold Budget, which I commend to the House.
Madam Deputy Speaker (Natascha Engel)
Order. I am sorry to say that I must drop the time limit on speeches to five minutes to get all the speakers in.
Liz McInnes (Heywood and Middleton) (Lab)
I am pleased to be able to contribute to the debate. We have heard the Tories’ repeated claim to be the party of working people, but we have a Tory Budget that is not the Budget that working people need. It leaves working people worse off and fails the test of building a more productive economy to bring the deficit down.
Cuts to tax credits will hit working people on middle and lower incomes, as well as those with larger families. My hon. Friend the Member for Hornsey and Wood Green (Catherine West) asked the Secretary of State last week for an equality impact assessment of the Budget. She was assured that the Budget had been fully equality impact assessed, but the document appears to be a closely guarded secret. It certainly does not appear as an accompanying document to the Budget on the Government’s website. I hope that in his winding-up speech the Exchequer Secretary will direct me to where I can find that elusive document.
Certain groups seem to be hit hard by the Budget, and I would like to concentrate specifically on the effect of the change from maintenance grants to loans on young people hoping to go to university. It might dissuade many students from poor and modest backgrounds from going to university, but might none the less result in large sums never being paid back to the Treasury.
The current system of maintenance grants supports students from the poorest backgrounds through university. In England, students from households with incomes of £25,000 or less receive a grant of £3,387 each year to cover accommodation, living expenses, books and course materials. In 2014-15, 400,000 full-time students in England received a full maintenance grant and 135,000 received a partial maintenance grant. Even with those grants, the system is stacked against working-class students. Students from wealthy backgrounds are 10 times more likely to receive a place at university than those from poorer backgrounds, according to the Sutton Trust, an education charity.
Following the Budget, our students will be saddled with even more debt, in addition to repaying tuition fees. Maintenance grants will be replaced with loans to be repaid under the same terms as tuition fee loans—that is, once a graduate is earning more than £21,000 a year. I will give credit where it is due: during the coalition years, the Liberal Democrats blocked plans to convert maintenance grants into loans. Here we have a fully fledged Tory Budget, and we see just what the Government want to inflict on our young people.
The general secretary of the University and College Union, Sally Hunt, has said:
“Maintenance grants are crucial for engaging students from disadvantaged backgrounds who are already daunted by cripplingly high tuition fee debt. Increasing the debt burden on students will act as a disincentive to participation, and it does not make sense for the taxpayer either, as the extra loan amount is unlikely to be repaid in full.”
We already have students living in poverty, and the replacement of grants with loans will just exacerbate that. The president of the student union of the University of the Arts London, Shelly Asquith, has described her university’s students as having to use food banks and payday loans to make ends meet. Others are being forced to take on work,
“often for so many hours it has a huge impact on their study.”
A typical student currently leaves university with debts averaging about £44,000, and no one knows what effect a loans-only system will have on university applications. There is a real risk that the Government are experimenting with the future of the current generation of secondary school students. In my constituency, 40% of working people do not even get paid the living wage —and that is the real living wage, which is set independently by the University of Loughborough and is currently £7.85 an hour. Five years ago, poorer students also received education maintenance allowance, which the Government have also taken away. We need to look urgently at the impact of the Budget on disadvantaged young people who aspire to go to university, and who will get the most out of it.
Peter Dowd (Bootle) (Lab)
The Budget statement, although difficult to hear at the time, was a hocus pocus concoction with built-in excuses should things go wrong: “Things will be better tomorrow, but then again they might not be”—it was a sort of mañana Budget. Having told us that growth was strong, the Chancellor attempted to make a subliminal and conflated link with the Greek crisis, and the possible implications if we do not allow him to get on and finish the job he started. Of course that was just the warm up excuse, because he then went on to say that—notwithstanding what a fantastic job he claims to be doing—we cannot be complacent.
To reinforce his potential alibi, and in case things went wrong, he reminded the House that the economies of the United States and China have slowed. Like an astrologer or a Mystic Meg character, he told us that the global risks are in the ascendant. He then wagged his finger at Europe, reminding it in a vague and imprecise way that it must not allow our future prosperity to be put in danger. Of course he forgot to remind us that Europe is way ahead in productivity, and that the French and Germans, among others, look on a little bemused—the French no doubt gave a bit of a Gallic shrug. The Chancellor also told us that this year the share of the national debt is falling after five years. I recall that he said—indeed, he boasted—that he would do much better than that on both the deficit and the debt, but he has not.
This was a back to the future Budget. If there is any doubt about that, we simply need to look at the self-satisfaction with which the Chancellor announced the sales of public assets, including some quasi-private assets in the form of housing association stock. It is the biggest sell-off since the 1980s says the Chancellor, but it is the old Conservative two-step shuffle of “Miss your targets, have a back-up plan, get the money from elsewhere—preferably somebody else’s money.” It is consistent, if not wholly imaginative. The Chancellor’s ambitions are not matched by the practical proposals that he has put in place to achieve them. Transport infrastructure proposals are currently in a mess. Many Conservative Members thought that they were going to get rail or road upgrades—or perhaps both—but they will have to wait a little longer until the mess is sorted out.
The Chancellor said that he wanted to make the NHS a priority in the Budget, but in short order he proceeded to tell the very people who make it run effectively and efficiently that they will be on a pay go-slow—in fact, they will have to be even more effective and efficient over the next four years because they will get just a 1% pay rise each year. That has become a habit. Local government—an area that I know reasonably well—has had to bear an unfair and disproportionate burden of cuts to budgets. Within the cuts to local government, some councils—including my own Sefton council—have had to bear even more significant and disproportionate reductions in central support.
If the funding of the NHS is taken in isolation from the funding of social care, that will create problems because they are different sides of the same coin. This is where local government comes into its own as it is the most efficient of public services. I hope that the new Secretary of State for Communities and Local Government will spend time ensuring that the devolution process for local government moves ahead positively and effectively, and at a pace consistent with good and effective governance, whatever those governance arrangements turn out to be. A slight glimmer of hope is the flexibility that devolution may bring to local government, and the ability to enable local growth that is unhindered by political and economic centralisation that, in my view, has hindered growth.
Let me make one salient point about the Chancellor’s claim that 1% of the world’s population generates 4% of the world’s income yet pays out 7% of the world’s welfare spending. In reality, a significant proportion of that is pensions that people have paid into and to which they are entitled. The Government’s jiggery-pokery on the issue must be challenged, day in, day out.
Harry Harpham (Sheffield, Brightside and Hillsborough) (Lab)
Last week the Chancellor tried to paint himself as a champion of working people. In reality, we got a Budget that does nothing to tackle the underlying problems of low productivity and low wages that over the past five years the Chancellor has failed to address. We had an old-fashioned Tory attack on the incomes of low earners, and a gaping hole where measures to increase productivity should have been. Much has been made of the fact that this was the first Tory Budget for 18 years, but that is only partly true: the Chancellor has been presiding over the economy for half a decade now. During that time, our growth has been among the slowest in the G20 advanced economies, and was revised downwards by the OBR last week from 3% to 2.4%. Our poor growth is a symptom of our poor productivity, and it means depressed wages for far too many of our citizens. It means lower tax returns and higher borrowing. We cannot provide people with financial security unless we provide strong growth.
If we are going to tackle the productivity gap that is holding back growth, we need firm and decisive action from the Government, but that has been lacking over the last five years—and the Budget sees no improvement. The OBR has revised forecast productivity down for the next four years, and the Chancellor is set to fall short of his target of increasing exports to £1 trillion by 2020 by £367 billion. We need real investment in infrastructure, skills and research, and development to boost productivity.
The Chancellor is very good at announcements, but the Government’s record on delivery is poor. Just ask my constituents—they have been waiting nearly two years for the midland main line to London to be electrified, only to be told that work is being halted. So much for the northern powerhouse.
Despite the increase in apprenticeships, too often they are focused on low-end skills and employers are still complaining that they cannot find people with the skills they need. Likewise, the replacement of maintenance grants with loans for students from the poorest backgrounds is a further example of the Government jeopardising productivity. They may say that most students will not be dissuaded from going into higher education, and that may be so, but there are young people for whom it will matter, and the Budget has let them down.
When it comes to low wages, the Chancellor has outdone himself with the barefaced cheek of what he proposes. He stood at the Dispatch Box and, bold as brass, trumpeted his so-called national living wage. It is nothing of the sort. At best, it is a welcome increase to the national minimum wage, but to call it a living wage is an insult to those who will be paid it. Although it will be around £9 an hour by 2020, the Resolution Foundation has calculated that by then the real living wage will be £10 an hour. If that was not bad enough, young people will not even get the imitation living wage. An hour’s work deserves an hour’s pay, and it is wrong to suggest that the efforts of a 24-year-old have less value than those of a 25-year-old.
All of that is before we take the cuts to tax credits into account. Nearly 12,000 families in my constituency receive tax credits, and I have been inundated with letters and emails from families who stand to lose out from the cuts. Tax credits are a lifeline that make low-paid work a viable option for thousands of families in my constituency, but the Chancellor is cutting that lifeline. The so-called living wage will not make up the shortfall, and the end result will be that thousands of poor working families will become even poorer. Families in my constituency will not be fooled by the rhetoric. They know an attack on their livelihoods when they see one.
On housing, the Chancellor shirked his responsibility to start delivering the 200,000 new starter homes that the Tory manifesto promised. In the first half of this year, first-time buyers spent on average £12,500 more for homes than in the same period last year, an increase of 8%. The average deposit they had to put down has gone up by 5%. With the Government’s poor record on house building, it is hardly surprising that for many people the chance of owning their own home is sliding ever further away.
I agree with the Chancellor when he says that we need to tackle low pay and productivity. I only wish that he had announced a Budget that did so.
Emily Thornberry (Islington South and Finsbury) (Lab)
Listening to the Budget was like falling down Alice’s rabbit hole. It claimed the most extraordinary things—black is white, poverty has got nothing to do with money, the long-term plan lasts five months between Budgets in March and July, and the minimum wage is now the living wage even though it is not enough to live on. Apparently, it is a Budget for higher wages and a lower welfare economy, but we got a £5 billion wage increase at the expense of £12 billion of social security cuts.
Things get really Orwellian when the Government start talking about housing. Government Members may recall the modest proposal Labour made in relation to private rents. We were asking for just three years’ security. We were not asking for a great deal and we were not forcing rents down, but it was something—it was a start. But good heavens, one would have thought that civilisation as we knew it was about to end! The right hon. Member for Welwyn Hatfield (Grant Shapps) got extremely excited and called it Venezuelan-style rent controls. So which socialist republic inspired the forced reduction of social rents, which has now been adopted by the Government?
The Government Benches seem to be populated by an awful lot of Maoists. We have heard about the Government’s two-child policy. It now seems that the Conservative party feels we ought to be doing something about pushing down social rents. Why? It would seem that Ministers have discovered that the housing benefit bill is ballooning. Well, yes! And why is that? It is hardly being caused by the social housing sector. Have Ministers not noticed the size of rents in London at the moment? At the very least, they are twice that of social rents. Frankly, Ministers should come with me and find out how much the private rented sector costs people who are trying to remain in Islington. Housing benefit has soared and Ministers have finally noticed it, but they ought to have noticed this: the number of working people claiming housing benefit shot up by 60% under the coalition Government. Ministers should also have noticed that of the increase in the total number of people relying on housing benefit since May 2010, 98% are private sector tenants.
Despite all the evidence, which comes from the Government’s own statistics, we have a proposal to cut spending on housing benefit by bringing down rents in the social sector, but that will not make a great deal of difference. Of course, the logic is this: it is yet another nail in the coffin of social housing. We have seen this agenda laid out in front of us for a long time: the Conservative party has not missed an opportunity to attack social housing. First, there were the cuts to social housing subsidy. Then we had forced conversions to the Orwellianly named “affordable” rents of up to 80% of market value, which is hardly affordable in my constituency. The Chief Secretary to the Treasury is pulling the most extraordinary face. What is 80% of market rent in his constituency, and to what extent is that affordable to his constituents? The Government have threatened to lower the benefit cap, extend the right to buy to social housing tenants and force the sale of more expensive council homes. Now there will be forced rent reductions, but only for social landlords. This is an assault on social housing. We know it, they know it and so do the public. We need to ensure the message gets out loud and clear, because it threatens an end to social housing as we know it. It is a disgrace and it is unforgiveable.
Large tranches of the Budget could have been predicted. The Conservatives talked about how much it would be, but they would not give us the details. Those of us who looked at chapter nine of the IFS green budget, “Options for reducing spending on social security”, would have been aware of it. Unfortunately, the Chancellor does not seem to have read up to chapter 10, “Options for increasing tax”, and there were so many good things in it. For example, he missed the option of raising £990 million by abolishing tax relief for empty properties, or raising £1.5 billion through a 1% increase in corporation tax. Instead, he chose to cut it.
This is not a one nation Budget. This Budget is all about the same old Tories: the poor get poorer and the rich get richer.
Alison McGovern (Wirral South) (Lab)
Before I begin, I would like to say to the hon. Members for Paisley and Renfrewshire North (Gavin Newlands), for Erewash (Maggie Throup), for Southampton, Itchen (Royston Smith), for Chippenham (Michelle Donelan) and for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald) that they have each made great first contributions to this place. It was a pleasure to hear them. My hon. Friend the Member for Wirral West (Margaret Greenwood) also made her first contribution today. She will find that representing the brilliant, funny, kind and generous people of the Wirral is a sincere pleasure and a great honour. She is just like them and we are very proud to have her here.
The Budget needed to do two things: to address the deficit that our country still faces, and to make work pay. I shall address my concluding remarks on this debate to those two principles. I am afraid that on both those issues—on the deficit and on making work pay—the Chancellor has given the British people a con.
On the first of those principles, I remember being on the Back Benches in 2010, knowing that Alistair Darling’s Budget of March that year had seen the economy grow. This Chancellor argued that the emergency Budget in June that year was necessary because the deficit had to be closed—not to be reduced by half by the end of that Parliament, as it would have been under the existing plans, but to be fully closed by 2015. However, as the hon. Member for Taunton Deane (Rebecca Pow) said, the deficit is still too high. I would invite and encourage her to get in touch with the Chancellor of the Exchequer to remind him of the promises he made to the British people and to ask him this simple question: what went wrong? What happened? Even after five years of over-promising and under-delivering, the Chancellor has done it yet again.
In fact, as the OBR says on page 15 of the “Economic and fiscal outlook”,
“the budget balance improves…less quickly”
than the Government forecasted in March. If for whatever unfortunate reason for our country the Chancellor were no longer in post in 2019, one wonders whether he would have had the unique honour of presiding only over deficits for each year in which he was Chancellor of the Exchequer and never over a surplus. That is now looking to be a distinct possibility. I wonder what the Chancellor would have said in 2010 if he had known that that was going to be the case. Could he have predicted, I wonder, his failure over his promises?
Secondly, on making work pay, I was 17 when the national minimum wage came in and I was in my second-ever job. A year earlier, at 16, I had my first job and I well recall the payslip; I was paid about £2 an hour. I worked alongside adults—over 18—who were paid the same amount. When the minimum wage came in, it was paid at £3.60 an hour. That national minimum wage had a profound impact on my working life and on the working lives of the people around me.
Last week’s Budget was a kind of back-handed compliment to the Labour Members who introduced the national minimum wage back then. They were so persuasive that it seems they persuaded even the Tory party. It was a compliment to the living wage campaigners who seem to have been so persuasive that they persuaded even the Chancellor, and to the trade unions who seem to have been so persuasive on the need for a pay rise that they persuaded the Chancellor even while the Government were still hell-bent on attacking them.
We should ask ourselves this question. Does the Budget really make work pay? Emphatically not! Tax credits have profoundly improved the ability for work to pay, especially for families that have the extra cost of having children. The damage done to tax credits will see families up and down our country lose out. The Chancellor calls his new “national living wage” just that. He uses the language of a “living wage” all the time while not living up to that promise. Of course an increase in the national minimum wage should be welcomed and is good, but it is not, as Members have mentioned, a living wage as normally understood.
Let us look at the detail of whether this Budget makes work pay. First, as part of its analysis, the Treasury has often produced a distributional outlook showing the impact of Budget measures on different groups—who gets what by decile of income. Not so this time; the Treasury chose not to do it. It is too complicated, it said. Thankfully, however, the IFS did just that, and we have all seen the graph of doom it produced, demonstrating unequivocally that those with the least lose the most. That is the truth of this Budget.
Let us turn to table 1.8 on page 40 of the Red Book to see what the Treasury says about the impact of its changes on families. It gives examples that it describes as “illustrative”, all of which involve people who are working for 35 hours a week, including a lone parent with one child. I do not know many lone parents in my constituency who are easily able to work for 35 hours a week. Indeed, many are on contracts involving fewer hours, and could not rely on being able to work for 35 hours a week even if they wanted to. The examples assume growth in the personal allowance—of which we have seen little evidence—in future years. They also assume wage growth, and we wonder whether that is certain at all. All those examples, which suggest that people will be better off, are accurate if, and only if, we can believe a word that the Chancellor says. I hope I have demonstrated that that is not an assumption that British families can make.
Secondly, we need to make work pay in each and every part of our country. Let us look away from the micro for a second, and turn to the macro. Ultimately, we can improve real wages only by increasing the earnings potential of firms in our economy and the working people within them.
The Chancellor could have taken actions in three areas to meet the so-called productivity challenge—in fact, “productivity” is just a jargonistic term for making work pay—but, unfortunately, he did too little in those three areas, which are childcare, infrastructure and skills. On childcare, he looked again to the Labour party for inspiration after the election, stealing our 25-hours policy—[Laughter.] It has not passed me by that my party lost the election, but even if, at times, the public were not listening, the Chancellor clearly was, because he stole our 25-hours childcare policy. Sadly, however, he has delayed its implementation, offering people no real help now.
On infrastructure, I thought that the Chancellor wanted to rebalance the economy, but he has done nothing of the sort. He has cancelled northern rail electrification, and has offered literally no infrastructure improvements to the north-east of England, the region that most requires assistance at this time.
On skills, the Government’s apprenticeships policy sounds broadly right to me, but when I look at their record, I see that they have increased the number of older workers on apprenticeship schemes that are merely rebadged old training schemes. I encourage newer Conservative Members who believe that their Government have presided over a great apprenticeships record to look at the position a little more closely.
Many people who are already in work need to be helped to acquire better skills. Our country has become world-class at generating low-paid jobs from which too few people ever move on. The CBI, that bastion of socialism, has said that we have a skills crisis that the Budget will not fix. In the care sector, for example, staff often start work on low pay and remain on low pay. We need a much bigger strategy than the one that the Government have presented.
The Chancellor should have set out to do two things. He should have addressed his own failure on the deficit and reduced our stock of debt as he promised that he would, and he should have made work pay for ordinary British people and given them a real chance to get on. In fact, the Chancellor has a terrible record on both, and he is trying to con the British people. However, it is worse than that, because the Budget reveals the Chancellor’s real priorities. If we compare and contrast the impact on the north of England with the impact on the south, we see his priorities. If we compare and contrast the steps that he has taken on inheritance tax with those that he has taken on childcare, we see his priorities. Compare and contrast the impact on those with least in our country who lose most, with on those at the top who gain. There we have his priorities. If he thinks we in the Labour party will let him get away with it, he should think again.
The Exchequer Secretary to the Treasury (Damian Hinds)
In every part of our country this Budget is helping working people meet their aspirations. It will deliver security, stability and prosperity. It will help us in our goal to become the most prosperous major economy in the world by the 2030s.
We build on a strong record: employment up; wages up; living standards rising; the deficit down; and the strongest economic growth expected of any of the major economies—for the second year in a row. As the Chancellor said, the only way to have a strong health service, strong schools, and a strong defence is to build a strong economy, and the British economy today is fundamentally stronger than it was five years ago. But there is much more to do, because for far too long we have struggled under the burdens of low productivity and an economy that is too regionally imbalanced and too skewed towards its capital city. In this Budget we have set out how we will change all that.
London is one of the greatest cities of the world. What we now need is a better settlement for the rest of the UK, one which boosts the rest of the UK while maintaining London’s strength—a regional rebalancing that levels up, not down. That is exactly the settlement we are providing through a combination of greater investment and more devolution, greater powers to Greater Manchester, and progress on devolution deals with the Sheffield city region, the Liverpool city region, the Cornwall and the Leeds, West Yorkshire and partner authorities. There is also a new round of enterprise zones for smaller towns, an extension of the coastal communities fund, major new science, technology and culture projects all over the country, and a roads fund in England funded by vehicle excise duty for the strategic roads our regions need. There is a new statutory body, Transport for the North, to work on bringing the towns and cities of the northern powerhouse closer together, including through Oyster-style ticketing across the north, £13 billion of transport investment in the north, £5.2 billion in the midlands and £7.2 billion in the south-west, and £100 billion of investment in infrastructure in total over the course of this Parliament. There are resurgent cities, a rebalanced economy and thriving communities, and the most ambitious plan in generations for truly one nation growth. This Government are indeed “fixing the foundations”.
Let me reply to some of the specific points Members have raised; with 41 contributions to this debate, I fear I may not manage to respond to all of them, but I did particularly want to mention the seven outstanding maiden speeches, such as that of the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald). Given his constituency name, we are all glad he waited for the installation of the widescreen televisions before making it. He enjoyed the rare distinction of being congratulated on his maiden speech in advance of making it as a result of what he described as the ongoing battle of the Stuarts. He also spoke kindly and appropriately of his predecessor Gregg McClymont, who is missed here, and of the House authorities and staff and how they make the daunting task of arriving here just that little bit less daunting. I am sure that is a sentiment shared across all parts of this House.
The hon. Member for Paisley and Renfrewshire North (Gavin Newlands) made a new bid in the auction of youth when he announced he had started fighting his seat at the age of 10. He also paid tribute to his predecessor, and although he made a few jokes some of us did not quite understand, as my hon. Friend the Member for Taunton Deane (Rebecca Pow) rightly said, he will certainly be a feisty and campaigning MP. He will very much make his mark.
The hon. Member for Wirral West (Margaret Greenwood) spoke powerfully, and in the best traditions of maiden speeches took us on a tantalising tour of her constituency, and told us all that is great about it from Incredible Edible to short-eared owls via Zorb ball, the Open golf championship and knitwear-clad lampposts.
My hon. Friend the Member for Somerton and Frome (David Warburton) is, I believe, a former composer and he certainly showed how to hold an audience, and how he achieved the strongest swing to the Conservatives in the country. In maiden speeches, we often talk about having big boots to fill; he exceeded that when he announced that one of his former constituents was Walter Bagehot.
My hon. Friend the Member for Chippenham (Michelle Donelan) talked passionately about education and it is clear that she is going to be fighting hard in this place for her constituents. She follows in an impressive line of MPs who first came to prominence through a Conservative party conference speech in their teens. Before her election, she was also a trustee of Help Victims of Domestic Violence, and I am sure she will bring important knowledge of that subject to this House, too.
I am particularly pleased to welcome my hon. Friend the Member for Southampton, Itchen (Royston Smith) to his place, because I spent a little time in his beautiful constituency during the election—they were among the hillier days of it. He already has an enviable reputation for the tireless work he does on behalf of his constituents, and he reminded us of the area’s long association with the military, from being Henry V’s setting-off point for Agincourt to being the place where the Spitfire was designed. He also spoke with praise of his predecessor, John Denham, who is also missed and who is now embarked on a career in academia in our county of Hampshire.
My hon. Friend the Member for Erewash (Maggie Throup) paid tribute to our friend Jessica Lee and said that although Erewash does not exist as a place, it makes almost everything—that is a real tribute to UK engineering. My hon. Friend will bring to the House knowledge of biomedical science and extensive experience of the voluntary sector. I first met her in Rwanda, where she undertook one of her many voluntary work activities.
I wanted to respond to the Chairman of the Select Committee, the hon. Member for Hartlepool (Mr Wright), on apprenticeships. Let me say to him that there will be a formal agreement with business over the coming period and further details at the spending review, and the system will be based on an employer’s pay bill. Both he and the hon. Member for Birmingham, Selly Oak (Steve McCabe) asked about exports, where a lot more support has been going in from UK Trade & Investment to help exporters, including prospective exporters, to get that first step made.
A number of hon. Members rightly talked about productivity, where we face a long-term challenge—there will be no quick solutions. That is why it is right that the productivity plan goes through the whole range of infrastructure, skills, planning, finance for investment, and making sure that cities have the governance and powers they need to succeed.
More generally, these debates sometimes have a pattern whereby Opposition Members say that they welcome certain bits of the Budget and then say they reject all the others. Of course often all the others are the difficult things we have to do in order to be able to do those first things. We do not deny that there are still difficult things that have to be done to get our country back to where it needs to be, and they include things such as some of the welfare changes and public sector pay restraint. All those things have to be seen in the context of a deficit that is still 5% and that needs to come down further if we are to protect departmental spending and continue to have the brilliant national health service that we all so value.
I will have to write to the hon. Members for South Down (Ms Ritchie), for North Antrim (Ian Paisley) and for Leicester South (Jonathan Ashworth), and to my hon. Friend the Member for North West Leicestershire (Andrew Bridgen). I think I can provide some comfort on the things that they raised but, unfortunately time is against us right now. The same applies to what my hon. Friend the Member for Congleton (Fiona Bruce) said about some of the measures on bringing local plans forward.
I wanted to take the opportunity to say to the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) that this is the second time in a few days that she has suggested that the majority of the increase in employment has been in self-employment but that is just not right. Three quarters of that increase has been in employees, and while we are here I might also mention that three quarters of it has also been in full-time employment.
We heard excellent speeches throughout this debate. The right hon. Member for Wolverhampton South East (Mr McFadden) talked about some of the themes in the years ahead, speaking about opportunities for youth, Britain’s place in the world and prosperity for all parts of the UK. I think all Government Members would agree very much with that. My hon. Friend the Member for Bedford (Richard Fuller) reminded us that changes needed to be made so that we could live within our means, and he challenged the Labour party to face up to that reality. My hon. Friend the Member for Bromley and Chislehurst (Robert Neill) reminded us of the fate of Charles X when he did not face up to the reality and was expecting the good people of France just to come round to the idea that the revolution had all been a terrible mistake. My hon. Friend the Member for Spelthorne (Kwasi Kwarteng) talked about the progress already made on tackling the deficit—as my hon. Friend the Member for Cannock Chase (Amanda Milling) said, Britain is very much back in business.
My hon. Friend the Member for Congleton talked about the importance of work in tackling poverty and in driving life chances. My hon. Friends the Members for Havant (Mr Mak) and for Fareham (Suella Fernandes) talked about the whole range of business support measures in the Budget, and of course it is businesses that create jobs.
We heard a lot about the different priorities in different parts of the country, ranging from what my hon. Friend the Member for Portsmouth South (Mrs Drummond) said about the southern powerhouse to the discussion of the Tisbury loop in Wiltshire. My hon. Friends the Members for Rugby (Mark Pawsey) and for Cleethorpes (Martin Vickers) talked about the importance of the role of mayor, not only as a democratically accountable institution, but as a figurehead for bringing inward investment. My hon. Friend the Member for Worcester (Mr Walker) talked about the beneficial impact of the fuel duty freezes we have had. It was good to see my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) back in his place, and my hon. Friend the Member for Newton Abbot (Anne Marie Morris) brought all sorts of good news from the south-west in her inimitable fashion—it is good news that will in future no doubt be brought at 140 mph on the Dawlish line or various newly improved A roads.
This Budget offers Britain a fresh settlement. Up and down the country, families will have the security of lower taxes and a national living wage. Our regions will have greater investment flowing to them and more control over their destiny. Our businesses will have the confidence to invest. There will be more jobs, more apprenticeships, higher wages, greater economic security, resurgent cities, more prosperous regions and a northern powerhouse. This is what the people of this country deserve and it is what we are providing. Britain is back in business and we will keep it that way.
Ordered, That the debate be now adjourned.—(Simon Kirby.)
Debate to be resumed tomorrow.
Nic Dakin (Scunthorpe) (Lab)
On a point of order, Mr Speaker. At business questions on Thursday, the Leader of the House promised to bring forward changed amendments to the Standing Orders for English votes for English laws so that the whole House could have good sight of them before the general debate on Wednesday. My understanding is that these have not yet been brought forward.
Mr Speaker
Yes, I think that the amendments to which the hon. Gentleman refers have not yet been laid before the House. Therefore, in so far as the hon. Gentleman is concerned that copies of the relevant material are not available in the Vote Office, the reason is as I have given: the matters have not yet been put before the House. That is of course a matter for the Government. The Government Chief Whip is present and will have heard the hon. Gentleman. I am sure that material will be available ere long.
Business without Debate
Mr Speaker
With the leave of the House, we will take motions 3 to 7 together.
Ordered,
Communities and Local Government
That Bob Blackman, Jo Cox, Helen Hayes, Kevin Hollinrake, Julian Knight, David Mackintosh, Mr Mark Prisk, Angela Rayner, Mary Robinson and Alison Thewliss be members of the Communities and Local Government Committee.
Procedure
That Edward Argar, Bob Blackman, Jenny Chapman, Nic Dakin, Yvonne Fovargue, Patricia Gibson, Patrick Grady, Simon Hoare, Sir Edward Leigh, Ian C. Lucas, Mr Alan Mak and Mr David Nuttall be members of the Procedure Committee.
Science and Technology
That Victoria Borwick, Jim Dowd, Chris Green, Liz McInnes, Dr Tania Mathias, Carol Monaghan, Graham Stringer, Derek Thomas, Matt Warman and Daniel Zeichner be members of the Science and Technology Committee.
Statutory Instruments (Joint)
That Tom Blenkinsop, Michael Ellis, Stephen Hammond and Derek Twigg be members of the Joint Committee on Statutory Instruments.
Welsh Affairs
That Byron Davies, Chris Davies, Dr James Davies, Carolyn Harris, Gerald Jones, Christina Rees, Antoinette Sandbach, Liz Saville Roberts, Craig Williams and Mr Mark Williams be members of the Welsh Affairs Committee.—(Bill Wiggin, on behalf of the Committee of Selection.)
Broadband (Suffolk)
Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)
It is a pleasure to bring to the House this evening a debate on an issue that affects not just Suffolk but many rural counties in our country. I wish to put on record my thanks to my hon. Friend the Minister for his work on this issue. I know that he has worked very hard over the past five and a half years to ensure that high-speed and superfast broadband can be rolled out to Suffolk and to other counties. He has visited our county on several occasions, and he understands the challenges that we face. It is the single most important issue facing rural Suffolk and many rural businesses and homes. As my hon. Friend is aware, Suffolk has a population of about 750,000 people and there are about 350,000 premises to which we need to get superfast broadband.
The question is what would happen if the matter were left to the open market. We know that BT’s commercial deployment of fibre-based broadband reached around 50% of Suffolk’s premises, but only in parts of the major towns and cities where it was commercially viable to do so. We know that Virgin Media provides coverage to around 67 premises, which is about one in eight, but only in selective parts of Newmarket, Ipswich and Felixstowe. There are also a number of small-scale wireless broadband providers in some parts of the county, where broadband speeds over BT’s copper network remain poor.
It is not just about homes and businesses, but about other issues including how we develop better public sector services for people in rural areas. We know that delivering more integrated and joined-up healthcare, and delivering care in the homes with telehelp and telemedicine to older people are essential, and the way to do that has to be through improving our broadband and rural connectivity. We also know that education in our schools is hugely supported in today’s world by the internet and the connectivity that the internet brings, but many schools in Suffolk still have very slow broadband speeds, and a number of schools in my constituency are struggling with speeds no better than those of dial-up. This needs to change, and I am grateful for the support that my hon. Friend and the Government have already provided to help address these issues.
Farming and agriculture are the backbone of our rural economy. Farmers tell me they do not have the infrastructure connections to enable fast enough broadband to comply with online Government services, including the new common agricultural policy information services, which require them to submit all information online and have an email connection for communication. This is affecting their ability to innovate and use new farm technology and software, which needs to be downloaded from the internet, and meet other Government regulations such as VAT, vehicle tax and animal tagging. Our farmers need to innovate to increase productivity in order to compete in international markets where higher broadband speeds are the norm. It is for the sake of Suffolk farmers that we talk about the last 5%, which I will speak about later. Farmers and agriculture are important drivers of the rural economy, and for their benefit we will need additional Government support to reach that last 5%—the farm at the end of the dirt track that still does not have broadband and is struggling.
Suffolk and the Broadband Delivery UK rural broadband programme has had some great success. Suffolk was one of the first two local authorities, with Norfolk, to sign a local call-off contract with BT in the first phase of the BDUK rural broadband programme in December 2012 to extend coverage by 100,000 premises to over 80% of Suffolk premises by the end of 2015. There was a grant of almost £12 million from the Government, for which we are very grateful, and that was matched by another £12 million from Suffolk county council. I am pleased that my hon. Friend the Member for Waveney (Peter Aldous) is sitting next to me, because he and I campaigned tirelessly to ensure that we got that money for Suffolk, and we are very grateful for the Government support that our county has received.
Suffolk and Norfolk worked closely with BDUK to develop the milestone-to-cash process for in-life management of local call-off contracts with BT, and helped BDUK to train other local authorities around the country. Suffolk has been the first local authority to work with BT to trial a number of new technology solutions as part of the Suffolk deployment, notably wireless to the cabinet technology, which uses a microwave point-to-point radio link, rather than optical fibre cable, to link an enabled cabinet in a village—for example, Tuddenham in my constituency—back to the network, to avoid what would otherwise have been a lengthy and disruptive road closure and high civil engineering costs.
Suffolk has also used copper re-arrangement technology to re-arrange existing exchange-only lines, and lines previously served by other cabinets, on to a cabinet that was to be upgraded with fibre to the cabinet technology. The process was first trialled in Suffolk, and is now being widely deployed across the country. Suffolk has used a number of other technologies, including fibre to the remote node technology and fibre to the distribution point technology—topics which my hon. Friend the Minister may wish to talk further about in his response.
Suffolk has led the way nationally in what we have been doing on delivering faster broadband and superfast broadband to very rural areas—areas where there would otherwise have been commercial failure, areas where operators such as BT and Virgin would not have shown any commercial interest because it was not commercially viable to take superfast broadband to the consumer. That is where the Government money is being spent, and, as a result, Suffolk was the first local authority to sign a second local call-off contract under the superfast extension programme, to extend coverage to a further 50,0000 premises, which means that over 95% of Suffolk premises will be receiving superfast broadband by 2018.
That was supported by a grant of £15 million from the Department for Culture, Media and Sport, matched by another £10 million from Suffolk county council and £5 million from the New Anglia local enterprise partnership. It is an example of Government working with the county council and the local enterprise partnership for the benefit of the county, recognising the importance of supporting rural businesses in Suffolk, and making sure that schools and the health service are considered part of that rural broadband roll-out.
Suffolk has signed up to the accelerated deployment process, agreed between BDUK and BT, to bring forward the end of the second contract by six months from the end of 2018 to mid-2018, so Suffolk is ahead of schedule in the roll-out of the first contract to reach 80% of premises, and moving ahead of schedule also on the second contract. I hope that the Government will recognise and reward Suffolk’s success in rolling out superfast broadband when we come to the third roll-out to the final 5% later this year. There are still questions about how to get superfast broadband to the final 5% in some of the county’s most rural areas, where farms and rural businesses are often operating on dial-up speeds. That situation is clearly unacceptable and needs to change urgently.
Let me set out the current status of the Better Broadband for Suffolk programme. As at the end of June, Suffolk has extended coverage to 90,986 premises, against a target of 100,000, so we are on track to complete deployment under our first contract with BT by the end of September. Those premises would not have been commercially viable and would not have received superfast broadband without support from the Government or the county council. That is a tremendous achievement. Peter Ingram and the Better Broadband for Suffolk team should be commended for all that they have done.
However, there is still more to do. Concerns have been raised with me—I would appreciate it if my hon. Friend the Minister would address these when he responds—about the conduct of BT. In general, Suffolk has a good relationship with BT, and the first contract is on track to meet, or slightly exceed, its coverage target of 100,000 homes by the end of September 2015, and within budget, which is rare for public sector projects.
Peter Aldous (Waveney) (Con)
I thank my hon. Friend for securing this important debate. I think that he is about to move on to the nub of an issue that I want to raise. Does he agree that part of the problem in Suffolk is that for many years BT has underinvested in its commercial roll-out? That means the Government and Suffolk County Council’s resources have been diverted from tackling the real problem of getting to the hard-to-reach areas. I have in mind a case from the town of Beccles, where my constituent Mr Tony Twomey has been waiting for months to get superfast broadband.
Dr Poulter
My hon. Friend is right to raise his constituent’s concerns and to highlight the fact that although the relationship between BT and the county council on the roll-out has generally been good, there have been concerns.
The money was originally put in place to hit those non-commercially viable areas, but not to supplement BT in activities that are commercially viable for it. Better Broadband for Suffolk has raised concerns with me about BT’s behaviour in a couple of areas, and I want to touch on those briefly. I would appreciate it if my hon. Friend the Minister could respond to some of those concerns, because they might affect some of the contractual relations with BT, particularly with regard to the third phase of funding, which is expected later this year.
We know that BT’s claims for its commercial coverage in certain trouble spots included villages on long lines from commercially enabled cabinets that got no benefit from the upgrade, and that were excluded from Suffolk’s intervention area under the first contract. BT was slow to admit the problem, initially promising the villages that they would be upgraded commercially and then reneging on that promise. The affected areas have been included within the Suffolk intervention area under the second contract as a result, but BT has been slow to prioritise coverage of the affected areas—my hon. Friend the Member for Waveney has just pointed that out—which will now be delivered more than two years later than originally planned. The residents of Suffolk, our constituents, are suffering as a result.
Suffolk has had similar problems getting BT to prioritise coverage of industrial estates and business parks, which are vital to the county’s economy, particularly in rural areas. In general, BT tends to ignore Suffolk’s priorities in favour of its own, which many of my constituents find unacceptable.
Jo Churchill (Bury St Edmunds) (Con)
I wish to reiterate the points my hon. Friend is making. This is an issue not only in his constituency but in mine. Whole streets in villages such as Old Newton and Bacton have no service. This is the fourth utility. It affects every Department, including the Department for Work and Pensions through universal credit, which is a digital platform; the Department of Health as we roll out telehealth; and the Department for Environment, Food and Rural Affairs through the basic payment scheme. It disables our constituents if we do not give them the facility of broadband. A £6 million company in Ingham in my constituency is failing to expand as it wants to because it does not have broadband. That should be addressed.
Dr Poulter
My hon. Friend is absolutely right. It is a pleasure to speak alongside her in this debate. Her advocacy on issues such as broadband in rural areas will be greatly appreciated by her constituents.
The speed of roll-out has not been helped by BT, because Better Broadband for Suffolk and the county council have had difficulty in managing the contract. During the first half of the deployment, under Suffolk’s first contract for 100,000 premises to be covered, it was clear that Better Broadband for Suffolk had the potential significantly to exceed the contractual parameters in delivering on budget and to a more rapid timescale. Latterly, it has been clear that BT has been limiting Better Broadband for Suffolk’s efforts. It has been only just meeting the contractual parameters and planning sufficient structures slightly to exceed the contracted plans, not putting any further structures in place. BT will not go faster when Better Broadband for Suffolk could deliver faster. That has been to the detriment of our constituents, who have not received broadband in the timely manner they should expect. That is particularly true of many rural businesses.
There has also been a problem with BT on availability. BT has been slow to recognise and respond to issues that prevented customers from ordering upgraded services on newly built lines, with delays sometimes lasting many months and cases where Openreach has demanded that excess construction charges be applied to make the final customer connection. Some upgraded cabinets have become fully utilised quickly, and it has then taken more than three months for Openreach to install additional capacity. That is unacceptable. Taxpayer subsidy—taxpayers’ money—is being delivered through financial support from the county council, the Government and the LEP, with many millions of pounds going into this. When there is the capacity to go further and faster more effectively to support rural businesses and to deliver broadband more speedily for our residents and our constituents, that should be enabled and encouraged, not slowed down by BT. I hope that my hon. Friend the Minister will outline what the Government can do better to hold BT to account through Broadband Delivery UK and how this might affect the allocation of the money for the final 5%. I would be grateful for his thoughts on these issues that have affected our constituents.
According to Which? magazine’s analysis, customer experience of broadband has been patchy. It found—we have found this in Suffolk as well—that only 17% of households with fixed broadband received an average speed that matched their advertised “up to” speed, and that this figure dropped to 15% during peak times, when the advertised superfast broadband speed is not as fast as it should be. I would be grateful if my hon. Friend outlined what measures will be available to consumers in Suffolk who are suffering from lower than expected and lower than advertised broadband speeds.
There is also a clear issue of superfast broadband being superfast only at times of low usage. That is a problem for businesses, in particular. They will obviously be using the internet and broadband services at peak times, and if the superfast broadband service that they have bought into is not superfast, then it is not fit for the purpose for which it was intended. This issue will need to be urgently addressed as part of the future roll-out process, as will the way in which we support existing businesses to ensure that they can get the speed of service that they need in order to be effective in looking after their clients and customers.
I have three or four questions for the Minister. I hope that the Government will bring forward proposals and funding for tackling the final 5% as soon as possible. The sooner there is certainty on the proposals, the better for our residents in Suffolk. Suffolk is keen to ensure that the final 5% of customers can enjoy the same fast, reliable, sustainable and future-proof solution that has been put in place for the other 95%. We want to avoid creating a digital divide between the 95% who will receive superfast broadband by 2017 and the remaining 5%, and Suffolk will be willing to work with BDUK on alternative approaches to achieving that objective.
Suffolk supported the Government’s commitment to the universal service commitment of at least 2 megabytes per second by the end of 2015. For that policy commitment to be fulfilled for those who may have to wait until 2018 or beyond to get a superfast broadband service, it is imperative that the scheme delivers the 2 megabytes per second as soon as possible, and in time to ensure that services can be delivered by the end of 2015.
In delivering superfast broadband for Suffolk, I would be grateful if my hon. Friend the Minister not only addressed the issues about BT and the final 5%, but picked up on whether we can ensure that improved broadband services are linked with better mobile technology and improved mobile phone reception in our area. We know it is vital that all people running rural businesses—for example, farmers needing satellite imaging on their combine harvesters—have broadband connectivity that is not just about fibre to the home, but broader in being linked online through a portable device. That issue is intrinsically connected with mobile phone coverage and 4G.
As part of the roll-out of the third phase of broadband funding to deal with the last 5%, I would be grateful for my hon. Friend’s support in ensuring joined-up thinking by the Government, as I am sure there will be, and that businesses in the most rural areas—particularly those operating out of doors, such as farming—are properly supported.
In conclusion, there are questions for the Minister on the conduct of BT, on the final 5% and ensuring that proposals are made in a timely manner, and on joining up mobile phone coverage to ensure that there is a holistic approach that benefits both Suffolk residents and the taxpayer.
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
I am very grateful for the chance to reply to this important debate. I thank my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) for securing it, and I am grateful to my hon. Friends the Members for Waveney (Peter Aldous) and for Bury St Edmunds (Jo Churchill) for their timely interventions.
May I thank my hon. Friend the Member for Central Suffolk and North Ipswich both for his kind words about the work I have done during the past five years in rolling out the superfast broadband programme and for the balanced tone of his speech? I must confess that too often in these debates I hear from many colleagues one long whinge about the superfast broadband programme. That is difficult for me to take, because I know that it has been an absolutely stunning success. I must say that my hon. Friend balanced his remarks by pointing out the programme’s extraordinary success in his own county of Suffolk. Before my remarks are somehow misinterpreted as portraying him as some kind of quisling rolling over to the Minister, let me say that he showed a superb understanding of the programme, which meant that the points he made at the end about how things could be improved had additional force and perspicacity, and therefore deserve the fullest answers.
I am grateful to my hon. Friend for his remarks, because they also reflected very well on Peter Ingram and the Suffolk team, who have been instrumental in making the county of Suffolk one of the textbook examples of how to run a good programme. It is worth reminding ourselves that this is a partnership of central Government funding and direction working with local authorities. The most successful programmes are those in which a local authority such as Suffolk and the local enterprise partnership, which my hon. Friend also praised, work in harmony in clearing away the obstacles and working together to achieve success. That is why, for example, some 17,500 premises in my hon. Friend’s constituency will get superfast broadband thanks to the programme in phases 1 and 2, as well as 8,500 in the constituency of my hon. Friend the Member for Waveney and 16,000 in the constituency of my hon. Friend the Member for Bury St Edmunds.
The programme is successful, but my hon. Friend the Member for Central Suffolk and North Ipswich made six points to which he asked me to respond. The first is the conduct of BT and, in particular, its reneging on promises when it has planned to roll out to a village and then does not. He also asked what it is doing to support business parks. Although I am unstinting in my praise for the way in which BT has rolled out the national programme, there is no doubt in my mind—I have said this before—that it has some problems with customer service.
One issue has been that BT has promised broadband and then not delivered it to certain communities. When BT gets on the ground and does the mapping exercises, it might find that getting to a particular village is more complicated than it had thought, so it revises its plan. There is no doubt that that causes great consternation to villagers who were expecting broadband to be delivered. It is my intention in the autumn to update all relevant Members of the House on the progress of broadband in their constituencies to make it absolutely clear where broadband will be delivered. It is important to warn those who might be at the tail end of the programme that they might have to wait some time. We cannot deliver it overnight.
Business parks and industrial estates are also an issue that we negotiate regularly with BT. Again, the issue is somewhat balanced. It surprises me sometimes that business parks do not take it into their own hands to provide superfast broadband for tenants. The market is replete with numerous business suppliers of broadband. As we found from our business voucher scheme, which has connected 25,000 businesses, we have more than 600 registered suppliers all over the country that are more than willing to provide superfast broadband. Business broadband is a different beast from residential broadband.
On the question of BT not exceeding its contracted plans with Suffolk, there is good news on the way. We can consider some of the more advanced counties, by which I mean advanced in terms of time if not achievement. For example, Cornwall, which originally contracted for 80% coverage, has reached 95% with the same money. We expect shortly to be able to look at where money is coming back under the programme, because we get money back under the contract as more people take up broadband, and at whether money is available to extend roll-out even further. That links to my first point, as BT, perhaps keen not to over-promise, leaves some of my hon. Friends with a feeling of frustration, but I am certain that BT will be able to exceed its contracted plans and that in a short time we will be able to announce how that will benefit Suffolk.
I shall take away with me the point made by my hon. Friend the Member for Central Suffolk and North Ipswich about BT being tardy in installing additional capacity in cabinets where demand is high, as again I suspect that it is more to do with BT customer service than any sinister plot to deny broadband to customers who are waiting.
My hon. Friend will be pleased to know that last month Ofcom made it clear that consumers will from now on be able to terminate their contract with any broadband provider that does not provide advertised speeds with absolutely no penalty. It is quite right to put the power in the hands of the consumer so that they can walk away from contracts that do not fulfil what they promised.
I know that Suffolk is not well served by mobile broadband roll-out. We have a landmark deal with mobile providers to provide 90% geographic coverage, as opposed to premises coverage, and that should be in place by the end of 2017. We are working quickly and effectively with mobile operators to get better mobile broadband coverage for my hon. Friend’s constituents, which is fast becoming almost as important as fibre coverage.
Finally, I hear what my hon. Friend says about the final 5% and I am keen to announce plans as soon as possible, and certainly before the end of the year, about how we intend to reach that final 5%. It is certainly our intention to leave no one behind and we think that there are two or three different ways in which we can secure a timely roll-out for the final 5% so that by the end of this Parliament virtually everyone in this country will have access to very fast superfast broadband speeds.
I thank my hon. Friend once again for his well-judged speech, which showed a comprehensive understanding of the broadband programme with some timely and constructive critiques of the plan, which I have taken on board.
Question put and agreed to.
OBSERVATIONS
Development of Middleton St George
Car Insurance Costs
Written Statements
Equitable Life
(9 years, 5 months ago)
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The Economic Secretary to the Treasury (Harriett Baldwin)
The Equitable Life Payment Scheme has issued payments of over £1.06 billion to 902,000 policyholders as of 31 May 2015. With final tracing efforts now concluding, the scheme is reaching the limit of how many policyholders it will be able to trace and pay. As announced in the Budget on 8 July, the scheme will close to new claims on 31 December 2015. Payments to with-profits annuitants are unaffected and will continue as planned for the duration of their annuity.
Before it closes, however, the scheme will continue attempts to trace and pay eligible policyholders, including tracing policyholders through the Department of Work and Pensions due £50 or more. I would urge colleagues to make constituents aware that if any of them are holders of an Equitable Life policy and have not yet claimed a payment under the scheme, they should contact the scheme on 0300 0200 150 as soon as possible, quoting their policy number.
Despite these efforts, the scheme expects that some policyholders will remain unpaid as of 31 December 2015. The scheme will use money that would have been distributed to the untraced policyholders to double the amount of the lump sum payments of 22.4% of relative losses to policyholders on pension credit. Around 40,000 people are expected to benefit by an average of over £1,000, although actual payments will depend on the amount of an individual’s relative loss.
In order to benefit from this payment, policyholders must be in receipt of pension credit. Policyholders are therefore urged to check whether they can make a claim for pension credit by calling the pension credit claim line on 0800 99 1234 or contacting a local advice centre as appropriate.
[HCWS96]
Productivity Plan
(9 years, 5 months ago)
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The Chief Secretary to the Treasury (Greg Hands)
HM Treasury has laid a command paper before Parliament titled “Fixing the foundations: creating a more prosperous nation CM 9098”, setting out a 15-point plan with concrete policy measures for productivity growth in the UK over the next decade.
The UK is set to be the fastest growing G7 economy in both 2014 and 2015. However, while rising employment has been a major source of recent growth in the UK, productivity is as essential an ingredient over the longer term. There has been a slowdown in productivity growth in the UK since the onset of the financial crisis, and there is a large and long-standing productivity gap between the UK and some other leading advanced economies. The Government are committed to boosting productivity growth and narrowing this gap in order to enhance living standards and quality of life in the UK.
Building on measures announced in last week’s Budget that will boost productivity, this plan is built on two pillars: encouraging long-term investment in economic capital, and promoting a dynamic economy. It includes measures to reform the planning system and further education; sharpen incentives to provide excellent teaching in universities and open up higher education to new providers; build stronger trading links with emerging markets; cut red tape; support the adoption of digital technologies; and promote competition and consumer choice.
The measures in this plan address both the slowdown of productivity growth in the UK since the financial crisis and the longer-term productivity gap with other countries. The document is available on the www.gov.uk website.
[HCWS94]
Avian Influenza
(9 years, 5 months ago)
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The Secretary of State for Environment, Food and Rural Affairs (Elizabeth Truss)
The Chief Veterinary Officer has confirmed a case of avian flu in a poultry farm in Lancashire.
Test results have confirmed the presence of a high severity H7N7 strain of the disease. While this disease affects birds severely, the advice from Public Health England is that the risk to public health from this disease is considered very low, and the Food Standards Agency has said there is no food safety risk for consumers.
We have taken robust precautionary action, imposing a temporary control zone last Friday to limit the risk of disease spreading. Measures taken included the decision to humanely cull all birds at the premises and to apply restrictions on movements of poultry and other birds to all poultry farms within 10 kilometres around the affected premises. This decision was based on the clinical symptoms displayed by birds at the farm and laboratory findings at the time.
Now that the strain of disease has been established, we have confirmed the 10 km restriction zone around the farm to control this outbreak and to prevent any potential spread of infection. Investigations are ongoing to discover the origin of the outbreak.
We have tried and tested procedures for dealing with such animal disease outbreaks and a strong track record of controlling and eliminating previous outbreaks of avian flu in the UK. We are working closely with operational partners, devolved administration colleagues and the industry to deal effectively with this outbreak.
I would urge bird keepers to be vigilant for any signs of disease, ensure they are maintaining good biosecurity on their premises, seek prompt advice from their vet and report suspect disease to their nearest APHA office.
[HCWS92]
Veterinary Products Committee
(9 years, 5 months ago)
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The Minister of State, Department for Environment, Food and Rural Affairs (George Eustice)
I have received the annual report of the Veterinary Products Committee and its sub-Committee 2014, which has been published today.
A copy of the report has been placed in the Libraries of both Houses.
[HCWS93]
Immigration Rules
(9 years, 5 months ago)
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The Minister for Immigration (James Brokenshire)
My right hon. Friend the Home Secretary is today laying before the House a statement of changes in immigration rules.
These new rules make a number of changes to the tier 4 route of the points-based system to reduce net migration and to tackle immigration abuse, while ensuring we maintain an excellent offer for students who wish to study at our world-class universities.
New students at publicly funded colleges will be prevented from being able to work in the UK, in order to bring their working rights in line with those of international students at private colleges. In the autumn, college students will be unable to switch to a work visa or extend their study visa while they are in the UK, while protecting students at embedded colleges who will progress on to study at a higher education institution.
The rules around academic progression are being tightened so that university students are permitted to extend their studies at the same academic level only if the course they wish to study is linked to their previous course, or the university confirms the course supports the student's career aspirations. To help ensure international students are progressing academically, the time limit on further education study will be reduced from three years to two years in the autumn.
The maintenance requirement for tier 4 students is increasing, along with the maximum amount paid for accommodation which can be offset against the maintenance requirement, to bring them in line with 2015 rates. A rule around established presence which allowed students applying to extend their leave within the UK to show only two months’ maintenance is being removed.
The application of the rules on time limits is being clarified so that the time a student has already spent studying in the UK is calculated using the full length of the leave they have previously been granted.
Changes are being made to allow a tier 4 visa to be issued in line with a student’s intended date of travel. This change to the date from which entry clearance can commence will help ensure a smooth roll-out of biometric residence permits for overseas tier 4 applicants.
Tier 4 migrants’ conditions of study are being changed, to prevent them from studying at academies or schools maintained by a local authority. Those who wish to study a foundation course to prepare for entry to higher education are also being prevented from doing so under the tier 4 (Child) route.
Where responsibilities of sponsor organisations and terminology have recently changed, the rules are being updated.
The Government are reforming the student visa system to reduce net migration and tackle abuse. These changes will help achieve this, while ensuring the UK maintains a highly competitive offer and continues to attract the brightest and best international students.
I am also taking this opportunity to make a number of smaller changes to the immigration rules:
enabling South African diplomatic passport holders to travel visa free to the UK for the purpose of ‘visit in transit’
amend the eligibility requirements for transit passengers, aligning the period within which non-visa nationals must intend and are able to leave the UK with that of visa nationals (other than those using the Transit Without Visa scheme)
changes to administrative review, which have been identified as necessary during the early stages of implementation
minor changes and clarifications relating to family and private life, mainly reflecting feedback from caseworkers and legal practitioners on the operation of the rules.
[HCWS95]
House of Lords
Oaths and Affirmations
Occupational Pensions: Survivor Benefits
(9 years, 5 months ago)
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Lord Naseby
To ask Her Majesty’s Government when they propose to act to address the restriction of survivor benefit payments to widowers and same-sex partners highlighted in their June 2014 Review of Survivor Benefits in Occupational Pension Schemes.
Lord Naseby (Con)
My Lords, in asking the Question standing in my name on the Order Paper, I declare an interest as a trustee of the parliamentary pension fund, and that my wife is a retired full-time NHS GP.
The Minister of State, Department for Work and Pensions (Baroness Altmann) (Con)
My Lords, the Government are absolutely committed to equality. Current legislation requires all couples to be treated equally and survivor benefits are built up on an equal basis going forward. The review covers complex issues of legislation and entitlements built up in the past. Any changes could have significant implications, including costs, for private and public sector pension schemes so we must consider the review’s findings thoroughly and understand those implications fully before making a decision about whether retrospective changes should be made.
Lord Naseby
I am most grateful to the Minister for that Answer but I would like to focus on the situation of female GPs, many of whom retired around the beginning of this century. They contributed an identical amount to that of their male counterparts. The widows of the male doctors get a 50% pension. Is my noble friend aware that current widowers, and possibly those in the future, get only about 18%? Can she rectify this anomaly, bearing in mind that both parties, male and female, have contributed an equal amount of money to the pension?
Baroness Altmann
My noble friend will know that the specific differences in treatment between male and female scheme members for the purpose of survivor benefits in public service pension schemes for service prior to 1988 were held to be lawful in 2011. This judgment was made in the Cockburn case, which specifically discussed a widower whose partner was a member of the National Health Service Pension Scheme. The judgment effectively said that there was in that case,
“an objective and reasonable justification”,
not to make retrospective changes in relation to new policy being introduced.
Benefits for widows were introduced much earlier than for widowers. The Social Security Act 1975 first imposed obligations on contracted-out schemes to provide a surviving female with a survivor pension. In those days it was usual for the man to be the partner who was working, with a dependent female partner. A female worker with a dependent husband was not the social norm. The scheme funding would have been based on the expectation that a female member would not have a dependent survivor, whereas the male would have a dependent survivor.
Lord Cashman (Lab)
My Lords, does the Minister agree that this issue of equality should have been dealt with prior to the Civil Partnership Act and the same-sex marriage Act? People who survive their partners are having to cope at the time of death with appalling inequality, which should be unacceptable. Will the Minister act with expertise and expedite this matter urgently?
Baroness Altmann
My Lords, the Government are very sympathetic to the principles of equality and if we were confident that equalising these benefits would be straightforward, affordable and sustainable we would be happy to support more equalisation. But we have to think carefully before imposing on schemes retrospective costs which could not have been taken into account in past funding assumptions. We are absolutely committed to tackling discrimination in all its forms and creating a fairer society for everyone, regardless of sexual orientation or gender identity, but the benefits people receive—
Baroness Altmann
The benefits people receive from a pension scheme are based on their personal circumstances rather than the contributions they have paid. The overall contributions are assessed on the basis of assumptions relating to the entire membership and there is a degree of cost-sharing between members. In order to equalise—
Lord German (LD)
My Lords, equalisation is a very important issue to many people in same-sex partnerships and it therefore has to be dealt with rapidly. Indeed, when this House passed the Act, we expected a rapid answer to it. Of course, costs will be involved but they will rise if they are not dealt with now, and we know they will diminish over time to a very small amount. When will the Minister commit to taking a decision on this matter?
Baroness Altmann
My Lords, these issues are complex, involving significant sums of money. They would potentially impose significant retrospective costs on pension schemes that are already struggling with large deficits and, if closed, would not have a means of recouping the costs from members in future. It would be very difficult to make newly retrospective changes and difficult to make changes to some schemes but not others. That is why the Government must consider these issues most carefully.
Baroness Symons of Vernham Dean (Lab)
My Lords, in her initial Answer the Minister said that the Government were absolutely committed to equality. Everything she has said subsequently has mitigated that absolute statement. Will she please reiterate: are the Government absolutely committed on this issue, or are they going to equivocate in the ways that her answers have so far done?
Baroness Altmann
My Lords, the Government are absolutely committed to equality, and all accruals from now are on an absolutely equal basis. However, past funding of pension schemes would not have built in the cost estimates for equality. That is why we have to be careful and consider the issue most carefully before imposing a cost of £3.3 billion on these pension schemes. The cost for public sector pension schemes would be £2.9 billion, which has not been funded, and the cost for private sector schemes would be £400 million, which has also not been funded. Finding that kind of money when employers are already struggling is not straightforward.
Lord Bradley (Lab)
My Lords, the Minister said in the Sunday Times last November:
“There has been so much unfairness in pensions over the years. Sadly, this is another unfairness, and should not be permitted these days”.
In the light of that, are the Government going to bring forward proposals quickly to match those words? What provision have they now made to meet the costs of addressing restrictions on survivor benefit payments if that decision is lifted?
Baroness Altmann
The current treatment has been challenged in the courts and been found to be lawful. If the Government had a ready source of funding, the issue would have been dealt with by now. These issues are complex and are still being considered. We will issue our response in due course.
Health: Multiple Pregnancy
(9 years, 5 months ago)
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Baroness Hodgson of Abinger
To ask Her Majesty’s Government what plans they have to improve care and deliver better outcomes for mothers and children in cases of multiple pregnancy.
The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con)
My Lords, all women should receive excellent maternity care that focuses on the best outcome for them and their babies. The Department of Health is working with key partners, including Sands, NHS England and the royal colleges to deliver a programme to prevent stillbirths and neonatal deaths, which are a significant risk in multiple pregnancies. Furthermore, the independent national maternity review will assess current provision and consider how services should be safely developed to meet women’s needs.
Baroness Hodgson of Abinger (Con)
The Twins & Multiple Births Association, Tamba, states that multiple pregnancies make up 3% of all births but account for more than 7% of stillbirths and 14% of neonatal deaths. Clinical guidance and quality standards have been published by NICE in recent years, but Tamba has found that fewer than 20% of maternity units have implemented the guidance in full. A particular concern is that only 18% of units have specialist midwives as recommended. Although there are figures on neonatal death and stillbirth, there are no figures on damage in multiple births, which I expect will be much higher. As we know, just a small interruption in oxygen supply can adversely affect children in the long term. Considering that since 2005 the number of reported patient safety incidents has risen by 419%, does the Minister agree that this is a worrying trend? What is being done to address this?
Lord Prior of Brampton
My Lords, the level of stillbirths in England is too high, whether from multiple or single births. The MBRRACE-UK report indicates that if we had the same rates as in Sweden or Norway, many more children would survive in this country. One of the problems that the noble Baroness puts her finger on is that the tariff system may discourage some neonatal units from referring cases to specialist referral units.
Lord Winston (Lab)
My Lords, the large number of multiple births in this country is very largely due—probably half due—to the practice of in vitro fertilisation. A very large number of patients are coming into this country having been referred to clinics overseas that do not accept the regulations on limiting embryo transfer. Does the Minister have figures on this and is there something that the Government can do to stop this practice, which is seriously increasing the cost of perinatal care and the tragedy for mothers?
Lord Prior of Brampton
The Government may have figures on this. I do not have figures here today, but I shall certainly endeavour to find them as soon as I can and perhaps follow it up with the noble Lord in a meeting outside this House.
Baroness Walmsley (LD)
My Lords, given that mothers expecting multiple births need the expert care of qualified midwives and yet we have quite a shortage, and given that the Government are considering giving golden hellos to GPs, what about midwives?
Lord Prior of Brampton
My Lords, we are not considering golden hellos to midwives. There are, I think, some 6,400 extra midwives in training at the moment and some 2,100 more midwives today than there were in 2010.
Lord Bradley (Lab)
My Lords, does the Minister accept that multiple births can sometimes require additional emotional support for mothers? Will he therefore ensure that some of the extra resources allocated to child mental health services are targeted at perinatal healthcare to ensure that all maternity services have access to a perinatal mental health professional as recommended by NICE guidelines?
Lord Prior of Brampton
The NICE guidelines for mothers expecting twins or more have an enhanced pathway as well, in which there will be a specialist named obstetrician and a mental health specialist. The Government have committed an extra £75 million over the next five years to increase the availability of mental health expertise to women who have multiple births.
The Earl of Listowel (CB)
Does not the Minister take pride in the fact that his Government—or the coalition Government—were so successful in recruiting many more health visitors, so that vulnerable families such as these get the support that they need?
Lord Prior of Brampton
Yes, I believe that under the coalition Government an extra 4,000 health visitors were recruited, and they are very important.
National Institute for Health and Care Excellence
(9 years, 5 months ago)
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Lord Hunt of Kings Heath
To ask Her Majesty’s Government why the National Institute for Health and Care Excellence was asked to suspend its work on safe staffing guidelines regarding nurses.
The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con)
The Government are committed to supporting NHS trusts to put in place sustained safe staffing by using their resources as effectively as possible for patients. The existing National Institute for Health and Care Excellence guidance on maternity settings and acute in-patient wards will continue to be used by NHS trusts. NHS England, working with NICE and other national organisations, will continue with this work in other areas of care and other healthcare professional groups.
Lord Hunt of Kings Heath (Lab)
I am grateful to the noble Lord, but that does not explain why NHS England put pressure on NICE to stop working on guidelines on safe staffing levels, despite the recommendation of Sir Robert Francis following the Mid Staffordshire inquiry. Was it because NHS England was no longer prepared to fund the implications of such work? Given that NICE has now decided to continue with work on A&E guidelines, will the Minister assure me that the Government will insist that the NHS implements those guidelines?
Lord Prior of Brampton
The noble Lord is right that the responsibility for safe staffing is now with NHS England. It will take into account any advice given by NICE, whose guidelines for acute in-patient wards and maternity services still stand. The main reason why the responsibility has been transferred to NHS England has nothing to do with funding. It has to do with the fact that the new models of care, such as the new emergency care vanguards, are much broader than just A&E; therefore, we need to take into account other factors.
Lord Willis of Knaresborough (LD)
My Lords, this Answer does not empower any validation at all, unless we have criteria by which all trusts could be judged. We have the safer nursing care tool, which was produced in Sheffield and London and validated by Leeds University; it has been adopted by NICE and rolled out by the Shelford Group and other major trusts. This is a tool that would give all acute trusts the ability to judge safe staffing ratios based on acuity and patient need. Can the Minister give this House an assurance that that will be mandated to all acute trusts and then rolled out elsewhere?
Lord Prior of Brampton
I think it might be worth while for the House if I read out four lines from the NICE guidance on safe staffing:
“There is no single nursing staff-to-patient ratio that can be applied across the whole range of wards to safely meet patients’ nursing needs. Each ward has to determine its nursing staff requirements to ensure safe patient care. This guideline therefore makes recommendations about the factors that should be systematically assessed at ward level to determine the nursing staff establishment”.
I read out that paragraph because it is important to realise that every ward is different. Where there are tools to help assess the acuity of patients in wards, those tools will be used. I do not think we are planning to mandate any particular tool at this time.
Baroness Gardner of Parkes (Con)
Twice I have raised with the Minister the question of a different standard of training, particularly that of entrants to nurse training. We face this great shortage. He has replied to say that the Government have it in mind to introduce such a thing. Will he tell us more about what they are proposing and when?
Lord Prior of Brampton
I am sorry—I did not quite understand the question. I realise that I cannot ask my noble friend to repeat it, so I wonder whether I could pick it up with her outside the House.
Baroness Walmsley (LD)
Is the Minister aware that in Wales 12% of NHS staff have made complaints about staffing levels in the past few years? Will the Minister join me in welcoming the fact that the Labour Government of Wales will be held to account for that next year?
Lord Prior of Brampton
From what I understand, the problems in Wales mean that there is a lot more for the Government to be held to account for there.
The Countess of Mar (CB)
My Lords, from personal observation from being in hospital, nurses spend a awful lot of time behind a desk ticking boxes when it would be much more helpful and better for patients if they could deal with patients more. Is there any way of alleviating the need to fill in boxes so that they can look after patients? Can they cut the paperwork?
Lord Prior of Brampton
The noble Countess makes a very insightful point. Non-productive time—by which I mean the time when nurses are not dealing directly with patients—varies considerably, but the average seems to be about 20% to 25% of their time. The better-organised wards—which takes me back to an earlier point—where there is strong local leadership from the ward sister will be organised in such a way that staff will spend much more time with patients. I agree entirely with the noble Countess’s point.
Lord Swinfen (Con)
My Lords, is part of the problem due to the specialisation of nurses? Are far too many of them being trained only as specialists so that they are therefore unable to be moved from one part of a hospital to another? Would more general training be better?
Lord Prior of Brampton
I do not think that is a problem. In many ways, in acute hospitals we lack generalists. That is true of consultants as well of nurses. That is actually my noble friend’s point. Possibly there are too many specialists, but on a cardiac ward or a specialist acute ward you need specialist nurses who know how to operate the equipment as well as how to look after the patient. You need a good balance between the two but, if anything, I fear we have, as my noble friend said, become too specialist and insufficiently generalist.
Lord Roberts of Llandudno (LD)
My Lords, what is the Minister’s opinion of the Government’s decision to deport nurses from overseas who do not reach the £35,000 a year income level within five years?
Lord Prior of Brampton
The noble Lord raises a good point. We need to train as many of our own nurses as possible. There will be times when we get those calculations wrong and it will be necessary to bring in nurses from overseas. That is not a desirable outcome for many reasons, which there is not time to go into today. We need to train more ourselves.
Lord Hunt of Kings Heath (Lab)
My Lords, will the Minister have another go at the Question? I still fail to understand why an independent body, NICE, was instructed by NHS England to discontinue work on safe staffing guidelines. What on earth caused NHS England to do that?
Lord Prior of Brampton
NICE has not been instructed to cease its work on safe staffing standards; on the contrary, it has been asked by NHS England to provide it with appropriate guidance.
Baroness Meacher (CB)
My Lords, the noble Countess rightly raised the amount of time that nurses spend filling in forms and ticking boxes. Is the Minister aware that much of this work comes from the rather microregulatory requirements of the regulatory bodies, and indeed NHS London? There are some very precise measurements, and if those were monitored carefully government Ministers and NHS England would know well whether services were being managed properly. Would the Minister consider revisiting the degree of microregulation of our health services?
Lord Prior of Brampton
I am not entirely convinced by the argument about regulation when it comes to managing wards. My own observation is that when you have strong leadership from strong ward sisters, ward managers or charge nurses, many of the problems that we identify seem to disappear and there is very high staff morale, low absenteeism and little use of agency staffing. So much comes down to local leadership, and sometimes regulation is used as a scapegoat.
Baroness Brinton (LD)
My Lords, given that everyone accepts that the new safer staffing guidelines will require more nurses, what will the Government and Health Education England do to reduce the number of nurses who do not qualify from their training, which is currently running at about 20%?
Lord Prior of Brampton
That is a very high figure. It is quite revealing that most of the people drop out in their first placement, and it behoves universities and Health Education England to ensure that they are recruiting new nurses who have done some work in a care home or hospital so that they know what the realities and practicalities of being a nurse are.
Children’s Centres
(9 years, 5 months ago)
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Baroness Massey of Darwen
To ask Her Majesty’s Government how many children’s centres have closed in the last three years, how many are likely to close during the next year, and what assessment they have made of the impact of such future closures on families.
The Parliamentary Under-Secretary of State, Department for Education (Lord Nash) (Con)
My Lords, since 2013, 214 children’s centres have closed, and from 2010, 705 additional sites have opened. Any closures come from local authorities merging centres to allow services to be delivered more efficiently. What matters most is not the number of buildings but how families benefit from services, and a record number of more than 1 million parents are doing so. The department does not collect information on the number of anticipated closures but expects local authorities to ensure that they meet the needs of local families. This week we will announce a consultation on how we can maximise the impact of children’s centres to ensure that they continue to help the families most in need.
Baroness Massey of Darwen (Lab)
I thank the Minister for that response and welcome the consultation, but I am sure that he would agree that it is not just the number of parents and children attending that matters but the depth and breadth of the quality of children’s centres, which is falling, as are the numbers being opened. Is he aware of a recent report by the National Children’s Bureau and the Child Poverty Action Group on children’s centres, which said that the early intervention grant to local authorities has dropped by 55% since 2010? Can he assure me that the Government are still keen to support parents and children?
Lord Nash
I am aware of the report that the noble Baroness refers to. The overall pot for early intervention has grown to £2.5 billion, and we give councils the freedom to use their funds in the way that will best meet the needs of their community. I was delighted to see that the report referred to by the noble Baroness recommends that local authorities should share effective approaches, because it is about innovation. We have seen quite a lot of that around the country. Staffordshire, for instance, has introduced family hubs; Hertfordshire has introduced Family Matters meetings; in Islington they have a First 21 Months programme, which improves communication between children’s centres, GPs, midwives and health visitors; and in Newcastle they have introduced community family hubs.
Lord Storey (LD)
The Minister will be aware of the evaluation of children’s centres being carried out by his own department and Oxford University. That report has shown that the most valued services after play and learning are those related to health—health visitors, midwives and clinics. Is it possible for him to talk to his colleague Minister about how he can ensure that these much-needed services are provided in the most disadvantaged areas so that it will not be as much of a lottery as to whether they are there or not?
Lord Nash
My noble friend Lord Prior has already given an excellent answer in which he mentioned the 10% increase in midwives and the 4,000 increase in health visitors. Of course, from September of this year public health commissioning for children under five will go to local authorities; I am sure that that will help the matter.
Lord Sutherland of Houndwood (CB)
My Lords, the Minister rightly stressed the role of children’s centres in dealing with the special needs of families and children. Will the same principle of targeting inform the Government’s plans for rolling out the extra 15 free hours of childcare?
Lord Touhig (Lab)
My Lords, every farmer in the House will know the phrase, “Do not eat the seed-corn”. If you do, you will survive this year, but next year you will starve, because nothing new has been planted. That is just what the Government are doing by cutting funding to children’s centres: they are eating the seed-corn. For short-term financial gain they are storing up problems for the future. The closure of children’s centres is a malign act and, frankly, very stupid. Therefore—patience, patience; the noble Lord’s time will come—can the Minister say whether the Government will accept that investing in our children’s future by funding children’s centres should be a national policy objective, not left to the whims and vagaries of local councils, many of which have huge financial budgetary problems?
Lord Nash
I accept the importance of the matter, and I was delighted to see the ECCE survey, which showed that 98% of parents were “happy” or “very happy” with the services provided by their children’s centre. I know that the Labour Party likes to hark back to a golden age of Sure Start, but in 2009 the National Audit Office reported that children’s centres then were failing to reduce inequality and many were unviable, and Ofsted reported at the same time that half were not reaching out to vulnerable families. It is essential that we reach out to vulnerable families and that the facilities are tailored in the most flexible way to reach the families who need them.
The Earl of Listowel (CB)
My Lords, can the Minister say what targeted services and support are offered to homeless families who may not be able to access children’s centres?
Lord Nash
Of course I empathise with the practical challenges that such families face. Housing authorities and children’s services work together locally to ensure that the needs of children in homeless families are met. This should include the role that local children’s centres can play in supporting such families. The Housing Act places a duty on authorities to co-operate with social services in situations where children may be made homeless intentionally or may be threatened with being made homeless intentionally.
Baroness Turner of Camden (Lab)
My Lords, what arrangements have the Government made for regular reporting back by local authorities about the provision of children’s centres? At the moment there seem to be no national arrangements made by government for reporting back on what is provided.
Cities and Local Government Devolution Bill [HL]
15:41 - Division on Amendment 1 - Ayes: 219 / Noes: 162 - Amendment 1 agreed.
15:56 - Division on Amendment 2 - Ayes: 224 / Noes: 158 - Amendment 2 agreed.
17:27 - Division on Amendment 3 - Ayes: 240 / Noes: 175 - Amendment 3 agreed.
18:41 - Division on Amendment 14A - Ayes: 85 / Noes: 153 - Amendment 14A disagreed.
Lord McKenzie of Luton
“Devolution: annual report
(1) The Secretary of State must lay before each House of Parliament an annual report about devolution for all areas within England pursuant to the provisions of this Act.
(2) The report shall include information on—
(a) the areas of the country where agreements have been reached; (b) the areas of the country where proposals have been received by the Secretary of State and negotiations have taken place but agreement has not yet been reached;(c) additional financial resources and public functions which have been devolved as a result of agreements; and(d) the extent to which consideration has been given by a Minister of the Crown to the principle under section (Devolution statements) that powers should be devolved to combined authorities or the most appropriate local level except where those powers can more effectively be exercised by central government.(3) The annual report shall be laid before each House of Parliament as soon as practicable after 31 March each year.”
Lord McKenzie of Luton (Lab)
My Lords, I start by declaring my interest as a vice-president of the LGA. I shall speak also to Amendment 2, which we consider to be consequential. In moving this amendment, I welcome the support of the noble Lord, Lord Shipley, and the LGA.
Throughout our consideration of the Bill there has been an explicit recognition that it is an enabling framework Bill. Specifically, it could enable, by order, the transfer of any function of any public authority to a combined authority, and for the mayoral combined authorities some or all those functions could be exercisable only by a directly elected mayor. The scope has been widened by government amendments relating to single authorities. We support those amendments and will be considering them later today. That is being supplemented by a fast-track process and by relaxations on what can qualify as a combined authority.
Our approach to the Bill has been supportive of its thrust—not to seek to stifle the process of devolution and the innovation that it can engender but to endeavour to understand the parameters of the Government’s willingness to devolve, to ensure that devolution is fairly available to local authorities across England and to make sure that the approach is comprehensive. As we have sought more detail, the Government have resisted being prescriptive, and the answer has always been to the effect that they stand prepared to listen to any propositions from local authorities and will evaluate them on a case-by-case basis. Nothing is seemingly off the table, there are no constraints on the capacity of the Government to respond, there is no programme with priorities, everything is possible in the best of all possible worlds, and deals are done behind closed doors with announcements at politically propitious moments.
When we sought to put some structure in the process and to publish a forward strategy, it was suggested by the noble Lords, Lord Heseltine and Lord Bichard, that this would give central government an opportunity and leverage to claw back some of the powers that they are about to lose. Therefore, we have moderated our approach, as Amendment 2 in particular will indicate.
Hitherto, the only parliamentary oversight on offer has been the affirmative process for the relevant orders and the debate in both Houses of Parliament. We know from experience that this gives restricted effective oversight. The commitment to expand the process with individual reports covering matters laid down in government Amendment 33 and related expanded provisions, is to be welcomed, but that covers only part of what is required. It addresses individual deals at the time they are made, and, when we come to discuss these later, we will explain that this will not necessarily be comprehensive. As we have seen in the case of Manchester, devolution arrangements can evolve, and not all components would require a Clause 6 order—the trigger for the Government’s additional report. Much of the proposed health devolution in the case of Greater Manchester does not appear to need the provisions in the Bill at all.
Therefore, the amendment calls for an overall annual report on the progress of the devolution: agreements reached, work in progress, functions transferred and resources devolved. Each year, such a report would provide the opportunity to take stock of progress across the country. It would be an opportunity to see whether and how devolution was working for different types of authorities—the counties as well as the metro cities—how devolution was shaping up in rural and coastal areas, whether all relevant authorities had been able to take advantage of similar functions, and whether devolved funding was fair. It could be a driver of best practice and would serve as a bulwark against those who might be tempted to linger in the slow lane. The annual report would be part of the process of holding government, central and local, to account in that it would shine a spotlight on them.
It would also be an opportunity to see progress on the devolution statements referred to in Amendment 2. This amendment was inspired by some of the comments of the noble Lord, Lord Bichard, in Committee, when he commented on the propensity of government—civil servants and politicians—to seek to constrain the process of devolution. The concern expressed was that they would seek to claw back powers through other legislation; that as we focus on this Bill there will be moves in that other legislation to prevent real devolution happening.
It was suggested that each piece of primary legislation coming before Parliament should have a devolution test—a devolution litmus test, if you like. The Minister who has introduced a Bill in either House should be required to make a devolution statement before Second Reading to the effect that the provisions in the Bill are compatible with the principles of devolving power to the most appropriate level. A statement itself would not, of course, directly trigger a process of devolution but would concentrate the minds of government and be a reminder that if the Government are serious about devolution, it should be the collective responsibility of central and local government and of all departments.
I hope the Government will accept Amendment 1 and the consequential Amendment 2 as being entirely supportive of their devolution agenda and a positive contribution to the Bill. I beg to move.
Lord Shipley (LD)
My Lords, my name appears on both Amendments 1 and 2 and we give our full support to both. The amendments require an annual report on the progress of devolution, and require that Ministers consider when they introduce a Bill whether that legislation is compatible with the principle that decisions should be made at the most local level possible. Both amendments seem to us to be entirely reasonable.
In Committee, we moved an amendment to create an independent panel that would review proposals for devolution and assess the Government’s record. We now have this amendment, which achieves broadly the same objective. It is important because devolution must not be unnecessarily piecemeal—that is, it needs to be clear what responsibilities are being devolved, or not devolved, to whom, and why. That, in turn, will help to define the criteria that the Government are pursuing—and that will help other authorities to frame their own proposals.
I agree with the noble Lord, Lord McKenzie of Luton, that the point which the noble Lord, Lord Bichard, raised in Committee on Amendment 2 is a very important statement of principle and I am glad that it has been included in this group in the form of that amendment.
I hope the Minister will take seriously the suggestion of the noble Lord, Lord McKenzie, that the Government should accept the amendment, which is entirely reasonable. I declare again my vice-presidency of the Local Government Association.
Baroness Hollis of Heigham (Lab)
My Lords, I, too, support my noble friend’s amendment. This is a very welcome Bill and we are delighted that the Minister—together with her boss, the Secretary of State—is so committed to localist values. That is great, and it is very welcome.
However, one of the problems that we found in Committee is that—because of the desirability that the energy in the Bill should come from the bottom up, from localism and from local authorities trying to establish what works best in their patch—it will be very difficult for those of us outside the great authorities to know what will or will not be acceptable to the Secretary of State as future patterns for combined authorities. No general principles of any sort are laid down in the Bill—anything may go, or nothing may go. We do not want to descend into ad hocery, and we do not want to descend into blueprints, but we do need to learn from what the Secretary of State is supportive of in other bids so that those that follow in the wake of those bids can devise a structure of combined authorities that are more likely not to waste our time, waste resources or raise false hopes in our local taxpayers but will command the support and, I hope, the assent of the Secretary of State as the way forward.
If the Minister is not willing to do this—and she has very good reasons not to be willing—and lay down principles by which local authorities may guide their submissions to the Secretary of State, it will be important for the rest of us to learn through example which submissions have been successful with the Secretary of State so that we can model ourselves on the best practice that he has commended. It seems to me that this amendment is entirely in the spirit of what the Minister wants and what the Secretary of State should follow. It is the route forward to combine the best of localism and a bottom-up approach, while avoiding a straitjacket of top-down structures and allowing us to learn from each other what is going to be best practice in the eyes of the Secretary of State. I hope very much that the Minister can support something that seems very strongly to support the path that she wants to go down and we want her to go down.
Lord Kerslake (CB)
My Lords, I declare my interest as president of the Local Government Association.
Noble Lords will know from my maiden speech my passionate commitment to devolution and support for this Bill. It is because I support devolution that I think we should support Amendments 1 and 2 today. An annual report and a devolution statement seem to me to be entirely practical and sensible additions that will further devolution, not hinder it.
The exam question before us is: why, given that all three of the main political parties have supported devolution for as long as I can remember, has progress been so slow and uncertain? Here are four quick reasons. The first is the silo nature of central government. Departments think “police, health”, but they never think place. Secondly, devolution is inherently disruptive. I recall a senior official saying to me that he was very supportive of the city and local government deals provided they did not get in the way of delivering his current programmes. I did say that that was the entire point. Thirdly, there is a dislike of difference in this country, and devolution is different in different places. Fourthly, there is often nervousness at local level, particularly in voluntary and community organisations, that this will be a cosy deal between central and local government that will leave them on the sidelines.
What is proposed here is a powerful antidote to those very powerful pressures and is designed to keep the Government to their intent as set out in the Bill. If agreed, these amendments will advocate and ensure transparency and reduce the risk of one step forwards, two steps backwards, which has bedevilled the devolution debate. Indeed, the Secretary of State, Greg Clark, produced something very similar to annual reports on progress in departments in the previous Government. We should support both amendments as practical and sensible moves that will keep the Government to their intent and advance the cause of devolution.
Lord Warner (Lab)
My Lords, I, too, support these amendments and very much echo the points made by the noble Lord in his last remarks. There is a silo mentality in Whitehall and it often works rather badly against what is best for place. These amendments will, in my view, help the Government progress the objectives of the Bill. I know that we are going to have a debate on Wednesday on some NHS issues around this, but Amendment 1 will help with the laggards and those who are uncertain where the health functions make sense in this legislation. It would be good to know, across the country, when particular services have been led into a devolved state and when they have not. We need to be able to capture on a regular basis the progress in this area across the range of functions it may be possible to devolve. I fully support these amendments and hope that the Government will as well.
Lord Liddle (Lab)
My Lords, I add my voice in support of this amendment. I declare an interest as a member of Cumbria County Council. In that part of the north of the north, we hope that effective devolution can be extended beyond the major cities.
Some noble Lords may remember that, in Committee, I made a strong case for action to try to promote unitary authority or authorities in Cumbria. I still believe that to be necessary, as do a large proportion of people in Cumbria, but there are obstacles. We would have more effective local government if that came about, more democratically accountable local government, because responsibilities would be clearer. We would be in a much better position to exploit the potential for economic development, in particular in our part of the north of the north the billions of pounds of investment in both the new Trident missiles in Barrow and the new nuclear power station on the west coast of Cumbria. Those investments are either straight from the taxpayer or underwritten by various types of taxpayer guarantee. The potential to have effective planning around them depends on us being able to sort out our local government structure.
I shall not move on Report the amendments that I moved in Committee. I was grateful to be able to have a chat about the problem with the Minister and I think that we in general share the objectives. However, this amendment, which tries to maintain the pressure on government—it is government regardless of political party—to push ahead with devolution, is desirable. In our case, I want the Government to work with local authority leaders in our area to see what can be done. The Minister indicated that she might along with the noble Lord, Lord Heseltine, be prepared to meet the local leadership. I hope that, in the light of that, the Government may be able to invite the authorities to present proposals for reorganisation, as they are enabled to do under a previous Act of Parliament, and that the department could play an active role in trying to establish consensus in the county. This is a vital point not just in terms of economic efficiency, but with the lack of trust that there is in politics now we have to apply the principle of subsidiarity and get decision-making as close to the people as we can. That would do a lot for the democratic health of the nation. I hope that the Minister will bear these points in mind.
Lord Woolmer of Leeds (Lab)
My Lords, I, too, support the amendments, but for one additional reason: that a great deal of the implementation of the Bill will depend on secondary legislation and a series of deals, each one of which, as I understand it, will be set out and agreed by both Houses in secondary legislation. As there will be a range of such deals, concerned with different parts of the country and involving different arrangements, it is enormously important that this is pulled together each year so that Parliament as well as the public and the press can understand how it is progressing and how it all makes sense put together. Individual pieces of secondary legislation are fine; it is about understanding the pattern that emerges. Rather than it being simply a series of individual deals, we should look at what they add up to. Do they add up to a pattern of devolution that makes sense across the country? From the point of view of Parliament, to have an annual stocktaking on that element would be extremely helpful.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, I thank all noble Lords who have made points on these amendments. I think that we are seeking the same ends but perhaps by a slightly different approach, as I will outline.
Amendment 1 would insert a new clause which places a statutory duty on the Secretary of State to provide annual reports to Parliament setting out information about devolution deals which have been agreed and those in discussion. Amendment 2 would add a new requirement that all Bills are to be accompanied by a “devolution statement”. Noble Lords have heard me say a number of times that the Government are open to discussing devolution proposals with all places. We have been clear that our approach is for areas to have conversations with us about the powers and budgets they want to be devolved to them so that they can grow their local economies and improve the competitiveness and productivity of the area. The importance of this cannot be overstated. As the Chancellor said in the Budget, the great economic challenge we face is on productivity. It is by addressing that challenge that we will ensure that Britain is what we want it to be—the most prosperous major economy in the world by the 2030s. Devolution deals are one of the most important levers for generating growth and delivering this aim.
Baroness Hollis of Heigham
I hope that the noble Baroness will forgive me, but I think that she has slightly misunderstood me. I accept for the sake of this argument her position—that the Secretary of State does not want to lay down principles—but what you actually have to do is deduce from the examples he has accepted which principles and action he is motivated by. That is best done in an annual statement to bring them together, which may or may not be accompanied by any contemplation that the Secretary of State may have had about the offerings. That is the way we learn from each other. I worry that small seaside towns do not have the resources of Greater Manchester to do the sort of heavy lifting that this work might otherwise require.
Baroness Williams of Trafford
I thank the noble Baroness for her intervention. The process undergone by Greater Manchester, Norwich, Cornwall and other places can act as a learning tool for small seaside towns which I agree absolutely may not, in the early stages, have the capacity or capability to think about what might be appropriate. We learn from others and this is an important process.
The noble Lord, Lord Liddle, referred to our discussion on Cumbria. Either myself or my noble friend Lord Heseltine—or indeed both of us if we can manage to get our diaries free on the same day—are looking forward to meeting with Cumbrian representatives to discuss what I thought were some very constructive points raised by the noble Lord in the meeting.
The noble Lord, Lord Kerslake, talked about the four reasons why devolution is not pursued. We understand and share the noble Lord’s analysis of why devolution can be slow or non-existent, and he gave a very pertinent example which I recognise from my local government days. However, where we differ is that I doubt whether these proposals for annual reports and statements are an effective means of challenging either silo working in Whitehall or the disruption, fear of difference and nervousness at the local level. The strong drive given by the Bill, backed by the early devolution of major powers and budgets, thus creating a whole culture of devolution, is the best way forward, not annual reports which may themselves become prescriptive, or at least perceived by local areas as a direction from the Secretary of State. Given those points, I hope that the noble Lord will feel happy to withdraw his amendment.
Lord McKenzie of Luton
My Lords, I thank all noble Lords who have spoken in support of the two amendments before us, with of course the exception of the Minister. We heard from the noble Lord, Lord Shipley, about the importance of not doing things piecemeal, and the pertinent point, reiterated by my noble friend Lady Hollis, that if no general principles are laid down, an annual report would at least help smaller authorities to understand what the parameters are in practice. We also heard the passionate commitment of the noble Lord, Lord Kerslake, to the Bill, but he described these amendments as practical and sensible and a powerful antidote to the prospect of government from the centre drawing back the thrust of devolution. My noble friend Lord Warner talked about help with laggards, and said that the amendments would help us to understand the pattern. My noble friend Lord Liddle does a great selling job for Cumbria, which I hope it appreciates.
I say to the Minister that none of this would stop the “come and have a conversation” approach that the Government are pursuing. If anything, it should aid that process because it would alert those who have not yet engaged to the prospects—what is actually going on around the scene. This is a very positive contribution. Of course, nothing in these amendments is in conflict with Amendments 33 and 70, which will be moved in due course. Indeed, we can see those reports as a component of the annual report, but not sufficient.
I hope I did not say that Greater Manchester would not need to rely on Clause 6 at all. My point was that not all of the deal is dependent on the use of Clause 6. If the extra reporting that the noble Baroness is talking about is tied to that Clause 6 order process, it would not necessarily embrace all of what is going on in practice.
I had hoped that we could agree on this. The amendments are genuinely meant to help the Bill but the Government have made their position clear. On the basis that Amendment 2 is consequential on Amendment 1, I certainly would like to test the opinion of the House on Amendment 1.
Lord McKenzie of Luton
“Devolution statements
(1) A Minister of the Crown who has introduced a Bill in either House of Parliament must, before the second reading of the Bill, make a devolution statement to the effect that in his view the provisions of the Bill are compatible with the principle that powers should be devolved to combined authorities or the most appropriate local level except where those powers can more effectively be exercised by central government.
(2) The statement must be in writing and be published in such a manner as the Minister making it considers appropriate.”
Lord McKenzie of Luton
My Lords, I move this formally on the basis that it is accepted as consequential. If it is not, I would like to test the opinion of the House.
The Lord Speaker (Baroness D'Souza)
The Question is that Amendment 2 be agreed to. As many as are of that opinion will say “Content”, the contrary “Not Content”. The Contents have it.
Lord Trefgarne (Con)
There were clear voices saying “Not Content”. There should be a Division.
The Lord Speaker
I beg your pardon, my Lords. I did not hear any “Not Content” voices. Let me put the Question again. The Question is that Amendment 2 be agreed to—as many as are of that opinion will say “Content”, the contrary “Not Content”.
Lord McKenzie of Luton
“( ) An order under subsection (1) shall not be used as a condition for agreeing to the transfer of local authority or public authority functions.”
Lord McKenzie of Luton
My Lords, in moving Amendment 3, I shall speak also to Amendment 4 when I wind up, after we have heard from the noble Lord, Lord Shipley. Amendment 3 would prevent the order-making power of the Secretary of State for the creation of a directly elected mayor of a combined authority being used as a condition for agreeing to transfers of local authority or public authority functions to such an authority. I acknowledge straightaway that the order-making power generally becomes available only if the combined authority has made a proposal or consented to an elected mayor, but that this proposal or consent may not be freely made if it is clear in advance that the Government will insist on this as part of the price, or the price, of a deal.
In last week’s Budget speech, the Chancellor of the Exchequer was clear that the expanded devolution for Greater Manchester and the work in progress with Sheffield and Liverpool city regions and Leeds and West Yorkshire for far-reaching devolution of power was in return for the creation of directly elected mayors. It seems that the door is open for some devolution without having an elected mayor, and we discussed in Committee on 22 June the view expressed by the noble Baroness’s colleague, James Wharton, about there being no necessity to insist on having a mayor when something less—a Manchester-type deal—is preferred. However, we never received an answer about what “something less” amounted to, and perhaps the Minister could help us further today, as it is important that we get this on the record.
This is not an anti-elected mayor amendment. It allows that combined authorities should not have to seek an elected mayor when they have alternative models of governance and leadership which they consider best suits their circumstances. Of course, government would be able to evaluate these models as part of the devolution process. Currently, there are a variety of elected mayors of varying political persuasions—Lib Dem, Labour, Conservative and independent—in varying types of authority, including London and regional boroughs, unitary met boroughs and non-met districts. They are overwhelmingly men, with some elections preceded by referendums and some not. Of the cities required to have mayoral referendums in 2012, only Bristol agreed, but it now wishes to change its mind and is blocked from doing so—which is why we support Amendment 74 in the name of the noble Baroness, Lady Janke. Indeed, it is unfortunate that the Bill perpetuates this situation and denies a combined authority the right to revoke its decision about a directly elected mayor without disbanding the authority.
We know that there are those who are strongly supportive of the directly elected mayor model in all parties—certainly in mine—but there are those who are strongly opposed. Those in favour would argue that the scale of what exists in England at present, with the exception of London, does not particularly reflect the role envisaged for the mayor under this Bill. This may be so. We accept that it needs individuals of integrity, experience and vision who can speak with authority and hold their own with their counterparts domestically and internationally. Not only elected mayors can fulfil this role, which is why we consider that individual combined authorities should have the opportunity to bring forward alternative models.
It seems somewhat strange that the Government are rightly prepared to pass responsibility, power and resources on a very substantial scale to combined authorities and trust them to deliver on vital parts of the Government’s agenda, especially the need for growth, yet seek to straitjacket them on the issue of the directly elected mayor. It seems out of balance with the whole thrust of what devolution is all about. The whole approach is characterised by the Government as a willingness and eagerness to listen to what local authorities propose and to respond accordingly. The insistence on directly elected mayors jars with this. I beg to move.
Lord Shipley
My Lords, there are two amendments in this group. I support Amendment 3, which was moved by the noble Lord, Lord McKenzie, and shall speak to Amendment 4. In essence, the question being addressed is whether it should be compulsory for there to be an elected mayor in some circumstances.
There are two ways of looking at this. First, with a directly elected mayor, there would be a direct connection between the ballot box and the additional powers being devolved, which would give local electors a say in who is running the devolved powers. It would also give the combined authority a chair who is not dependent on a single council for their authority. On the other side of the equation, it represents a huge concentration of power in one person, and it raises the question, which we debated in Committee, of whether the range of responsibilities is so vast that one person cannot do it all. In the context of some areas, such as the north-east of England, which I know well, the scale of the geographical area, which would run from the Scottish borders almost to the Tees valley, is so very large that it is very difficult to see how a single person could run that huge geographical area, even with the support of the leaders of the seven constituent councils. So it is right, as the noble Lord, Lord McKenzie of Luton, said, that constituent councils, together with their combined authorities, should have the right to come forward with different models to propose to the Secretary of State.
We addressed this issue in Committee with a proposal for a greater degree of direct election to the combined authority. It would have provided a stronger degree of legitimacy because the electors would have had a role in electing more people than just the single elected mayor. But that proposal was not supported by your Lordships’ House and, as a consequence, we have not proceeded with it on Report. As we have made clear, we want devolution to succeed, but it has to succeed with clear legitimacy across the whole of a combined authority area. There are serious dangers that if it is not owned across the whole of that area, the public will start to turn against it.
One other aspect of this relates to the overview and scrutiny processes, and we discussed in Committee how that might be done. We will debate this later, but the Government have come up with some proposals that, while not as strong as I believe they should be, are certainly stronger.
I support Amendments 3 and 4 because they would give the essential flexibility needed to meet specific local needs without which devolution may not work well. We would get flexibility through Amendment 3; it would mean that there might be greater public ownership of the structure that is created.
Amendment 4 would require evidence of sufficient democratic accountability if there were to be an elected mayor. I think I have demonstrated in what I have said that it is very difficult to see how that would be delivered other than by the four-yearly election procedure. We also say that there needs to be a demonstration both that there is local support for the mayoral model and that in the construction of this new layer of government there will not be a risk to the proper functioning of the existing tier of local government.
I look forward to hearing the Minister’s reply, but I think that the ad hoc decision-making by Ministers on which areas must have elected mayors and which need not needs to be spelled out clearly. At the moment it is not clear to anybody on what basis the Government are making the announcement that they regularly continue to make, without it being clearly understood what the criteria are for the devolution of powers to specific areas.
Lord Grocott (Lab)
My Lords, basically this is a decision about whether mayors should be compulsory or whether there should be a degree of local input about whether or not mayors should be directly elected. The history of public acceptance of the concept is pretty hopeless from the perspective of those who favour directly elected mayors, which I do not.
Neither my dear old Labour Party nor the Conservative Party have covered themselves in glory on this issue. I briefly remind the House that the concept of directly elected mayors came from the last Labour Government. As far as I am concerned, as a very long-standing member of the Labour Party, it came out of a clear blue sky—or a clear red sky. I had never been to any meeting of the Labour Party at any level where there had been a clamour for directly elected mayors, nor had I, in 50-plus years of canvassing—I do not know whether anyone can challenge me on this—ever knocked on a door to be told, “I’d vote for your party if you gave us directly elected mayors”. I think it is a product of a think tank; it is certainly not a product that has at any stage involved consulting the public.
The last Labour Government at least allowed local areas to have referendums before they embarked on a system of directly elected mayors. The results, certainly from my perspective, were pretty conclusive. There were 40 mayoral referendums under the Labour Government’s legislation: 13 local areas said yes and 27 said no. That was a fairly clear demonstration nationwide that this was not a universally popular proposition.
When the Conservative-led Government came into power in 2010, they had seen the Labour Government’s experience of a lack of wild enthusiasm, but for some reason the Conservative leadership thought that it was a great idea, as had the Labour leadership, so they did not allow the public to initiate referendums for directly elected mayors but simply said, “No. You, the 10 cities, shall have a referendum whether you want one or not”. That was the basis on which they legislated. As we all know, and as my noble friend Lord McKenzie already said, the public were consulted in 10 referendums and in nine cases—my maths makes that in 90% of the cases—they said, “No thanks very much, we don’t want directly elected mayors”. Only 10%, or one city, said that it did, and I understand that that city is now not too keen on the concept, having seen it in operation.
So we have gone from a stage of local, initiated referendums under Labour, which did not work very well from the perspective of those who want this system, to compulsory referendums under the Conservatives, which if anything went even less satisfactorily. Now what do we have? We have a system that does not involve the public at any stage whatever and is simply an imposition from national government on the kind of local authority structure, or rather the management structure, that you will have whether you want it or not. If I could draw a graph to illustrate this, it would be pretty clear. The political class, which we talk about these days, of which I suppose we are members here one way or another, thinks this is a good idea, or at least the leadership does. Whenever the public are consulted they say, “No, we don’t, thank you very much”, so what does the political class do? It says, “Well, you’ll have it, sunshine, whether you want it or not”, which is the position that we are at with this legislation.
I simply appeal to the Government—it is a non-partisan appeal to the extent that I freely admit that in part my Government were to blame for all this—that if local authorities are being told, “You must have this hugely significant figure in your area, which will dramatically change how local government works there”, surely at least there must be a degree of flexibility in considering whether the people in the area want it. Surely that is the most modest of propositions. However, as things stand, whatever the Minister says when she replies—and I am sure she will say, “It is possible in certain circumstances”—in practice we know that this is about compulsory directly elected mayors, and I do not like that idea one little bit on democratic grounds, let alone on administrative grounds. I hope that the House will consider these two amendments very seriously.
Lord Deben (Con)
I hope that the Minister will not accept what has just been said. We are looking at the history of local government, which I have been involved in for a very long time—since I first sat on the Inner London Education Authority in my twenties, so I know a little about how it operates. I say to my noble friend that we need something entirely new in local government if we are to recover the kind of verve and real local contribution that local government ought to make.
I agree with the noble Lord opposite that both sides can be blamed for a lot on this. Local government pretended that it could replace the Opposition and therefore could have nuclear-free zones, foreign policies and the like. This was countered by a reaction from a Conservative Government who took away local government’s power to raise money through the business rate and the like. Both sides have a lot to answer for as regards the way in which we had that countervailing situation, and it took a long time for people to recover their respect and support for local government.
However, we have recovered our respect for a system that lacks vitality and deserves a great deal more opportunity. Our great cities should have the same kind of powers and the same sort of verve that you find in many continental cities. I do not see that we can do that under the present structure. What is more, all the amendments that come from the Opposition are about the perpetuation of the very systems that have helped to pull down local government and do not give it the sharpness that is necessary if local communities are to be properly represented.
I found the comment about the effect of mayors a bit odd. All I can say is that after a very long period of appalling local government in Bristol, in which all three parties were involved, the elected mayor of Bristol has made a dramatic improvement. He has no history of being a supporter of my party, so I speak entirely independently and objectively on that. Bristol is now extremely lucky in its representation and in the way the mayor can speak for that great city. It had years of destructive labour authorities, followed by the most peculiar system whereby each of the parties took control one by one and none covered itself in glory.
Baroness Hollis of Heigham
I support my noble friend’s amendment. I was not expecting to speak on this but, if I may, I want to challenge the view expressed by the noble Lord, Lord Deben. As far as I can see, it is a view supported very strongly by former Secretaries of State, who think that basically local government should be led by people like them, ideally swishing round in cars and flying off to Japan to make contracts and so on. However, that is not what local government is about; it is about a sense of place.
The noble Lord, Lord Deben, seemed to suggest that local government has declined since the 1960s—when I came into local government, and stayed with it right through to the 1990s—because of a lack of local leadership, but I say to the noble Lord that the primary reason local government has declined is that my Government to some extent but his Government notoriously have taken away our powers, our responsibility, our finance and our accountability. They have centralised us in field after field after field, and have tried their best to turn us into postboxes of central government decisions.
I respect the position taken by the noble Lord, Lord Deben, in favour of devolution. However, if his answer is that leading local authorities should be strong people—mainly male, I guess, but not necessarily so—who are just like Secretaries of State so that in local government we get a mirror image of what is happening in central government, then I say as someone who has lived my life in and trained in local government that that is not the route that I want to follow. A sense of place means collaborative, consensual arrangements that local people want and support. If they choose to have a mayor, that is fine by me, but if that does not fit their sense of place then it should not be imposed on them by the swagger factor.
Lord Heseltine (Con)
I have listened to the noble Baroness with interest and I wonder whether she has not caught up with the news that both Alan Johnson, a former Cabinet Minister in the Labour Government, and Liam Byrne, the very perceptive Chief Secretary who noticed that there was no money left, have said that in the circumstances of there being mayors they would be interested in a nomination. The fact is that creating the job of mayor has attracted a degree of interest at the very highest level in government and opposition politics. To me, one of the attractive ideas of a mayor is that it will be a ladder up which budding national leaders will climb on their way to another place, or it will be the opportunity for people who have served at the highest levels of government to serve their local communities with all the experience that they have gained in government, having ceased to be members of a Cabinet. That is an interesting evolution of our constitutional practices that would enrich the political process. I very much hope that my noble friend will resist Amendments 3 and 4 because—let us be frank—they are wrecking amendments.
This Government were elected on the basis that there would be a deal—I quote the noble Lord, Lord Smith—of a sort “unimaginable” to local government in his experience. As the noble Lord, Lord Deben, said on this issue, we have taken power away from local government decade after decade after decade without a referendum and without any sort of consultation; we did it because we did not think local government was doing a good enough job. The noble Baroness, Lady Hollis, rightly said that it was done by both parties and admitted that her party played a part. But her party never did anything to restore any of the powers that my party had taken away; it loved it, shared in it and wallowed in it, as it exercised the powers that we had extricated from local government into the hands of central government.
Lord Lester of Herne Hill (LD)
Can the noble Lord explain what it is that is wrecking in Amendments 3 or 4?
Lord Heseltine
The first point on Amendment 3 is that it removes the nature of the deal with government that there will be a mayor. It is designed to remove that condition. The noble Lord, Lord Shipley, has a different version, which has another delaying process, about consultation. But what does that mean? It means referenda. It means consultation of one sort or another. This is a delaying process.
I have no doubt that noble Lords all over this House are fully aware that from one end of England to another local councillors, leaders and industrial partners from the local enterprise partnerships are way past the debate that we are having today. They are actually designing the deals that will make this a reality. In his speech last week, the Chancellor listed Liverpool, Leeds, Sheffield and the possibility of the West Midlands as being already in the process of evolving the most detailed proposals to put to the Government. The condition behind all that is a directly elected mayor, as the noble Lord, Lord Smith, said in this House not that long ago. It is a deal. He said: “We did not particularly like directly elected mayors but the offer was too good”. I therefore urge noble Lords to consider carefully whether we should be concentrating on whether there is a mayor, because there will be no deal in the circumstances we are talking about unless there is a mayor. What we should be talking about is how to ensure that the deal that is done is of the scale and level of imagination that meets the extraordinary offer that has been made.
I was surprised and disappointed when the noble Lord, Lord Shipley, asked: “How can one man, or woman, cope with such a situation?”. Look outside this country and show me one where there is any alternative form of local government except what the Bill is proposing. There are senators in America with huge power. Germany has the Länder and France the departments. They seem perfectly capable of handling this massive responsibility. Are the English so impoverished as people that we have no one in our country capable of being the equal of what every advanced economy seems perfectly happy to deal with?
Anyone who has looked at this legislation will know that this is not the creation of a dictator. The checks and balances that exist within the negotiation that has been concluded with Manchester, for example, are very clear. The existing councils that make up the combined authority retain very large powers. They are part of an arrangement with the elected mayor that provides very substantial checks and balances.
The heart of this matter is that the Chancellor, in arguing for his deals, is looking, as my noble friend Lord Deben said, for a range of men and women capable of exercising leadership and appealing to the local community across the board. That is what we hope to see. In doing that, there is an offer from government to transfer power in a way that is outside any experience that any of us have had, with the exception, partially, of London.
Those of us who care about this issue are very familiar with Leicester and Liverpool, both of which have Labour mayors. One is a former Member of another place and the other a council leader who persuaded his colleagues to allow him to become a mayor. In talking to those who hold this responsibility, I have learned that their experience of the change in stature that takes place when they are seen as being a mayor—an internationally understood and recognised position—is extraordinary.
I hope very much that we in this House can perhaps move on from the minutiae of the Bill to the implementation of the legislation at the greatest possible speed. I really hope that your Lordships will catch up with where local government and the local enterprise partnerships are already. They are making this happen now. It is an exciting prospect that I never thought to see happen.
Lord McKenzie of Luton
Forgive me for interrupting, but before the noble Lord sits down will he clarify something? A statement was made at the other end that, if an area wants a deal that is not the size of Greater Manchester, it may not have to have an elected mayor. Can we have some clarity on what the lesser deal is that does not cause the imposition of an elected mayor?
Lord Heseltine
That is a very good question and rightly asked. Where the difficultly comes is that no one is imposing a deal. The Government are not saying that A, B, C and D must happen—the noble Lord shakes his head, but I had the privilege to sit in some of the negotiating discussions that have taken place and know that no Minister is saying that this is the prescription. That is what we would have done. All my life, that is what happened: it was not a question of whether an area wanted power over housing; it was a question of filling in 75 forms before building a council house. I had all those forms on my wall in the Department of the Environment—70 forms, about the slope of the roof and the pitch of the eaves. That is what we did. And here we are talking about trying to impose some sort of structure of deal in the detail, which the Government are not going to do.
Lord Woolmer of Leeds
My Lords, the noble Lord spoke with great passion and is very well informed. For my own part of the country, West Yorkshire, I am very supportive of the proposal for elected mayors, but much of his argument was that there is no alternative to that wherever you are in the country; in other words, this model really ought to be adopted everywhere. If that is true, why does it not apply to individual local authorities? I am not advocating it, because I do not agree with it. For example, in my neck of the woods, you have Leeds, Bradford, Calderdale—which is Halifax—and Kirklees, which is Huddersfield and Wakefield. If the only way to run a local authority is to have an elected mayor, is the noble Lord saying that that applies to all major local authorities? As we know, this legislation relates not to all services and local authority activity but to certain strategic powers, where the case that he makes with great passion and history is persuasive. However, if his arguments are generalised to imply that you can run a significant-sized authority only by having a mayor and you cannot get the same thing with what we now call the leader and cabinet model, is he advocating mayors within combined authority mayoralties?
Lord Heseltine
The noble Lord asks me for my personal opinion on that matter and I give him my answer: yes. I think that we would have been incomparably better over 50 years if, instead of taking power away from those authorities, we had concentrated on their leadership and performance. Yes, that would have meant differentiating in the early stages about the financial support that one entrusted them with, but it would have left them with the potential of the power that we have taken away. I have no doubt that if we could rewrite the last 50 years we would have seen much stronger local government. Frankly, for those of us who remember Redcliffe-Maud: well, he was right, wasn’t he?
Lord Scriven (LD)
My Lords, I support Amendments 3 and 4. I have listened with interest to what the noble Lords, Lord Heseltine and Lord Deben, have said. The amendments are about flexibility—the whole point of devolution is flexibility—and the noble Lord, Lord Heseltine, let the cat out of the bag when he said that you would only have a deal if you have a mayor. That is diktat, not a deal: it means that you have to have a particular model. In this new world of the noble Lord, Lord Heseltine, the conurbations of Leeds, Sheffield and others are coming back to a mayor. That is because they know that they can only have a deal with a mayor.
Not only politicians but business people said on BBC Radio Sheffield this morning, “We do not necessarily want a mayor. It is unfair that we are being told to have a mayor”— particularly only a few years after the people had a voice and said no. This is what Amendment 4 is about. What arrogance to say that this place knows what the better governance arrangements are for cities and conurbations elsewhere in this country. Again, it marks the political class as being distant from the people whose lives it wishes to improve.
I was surprised when the noble Lord, Lord Heseltine, said that he was erecting a ladder for politicians to climb up—the very thing that local governments have done which has failed their areas. It was a very strange thing to say. Again quoting directly from what noble Lords have said, the noble Lord, Lord Deben, said that we need to do something new. As someone who led a council relatively recently, I agree. However, something new does not necessarily mean one issue in a straitjacket called a mayor.
Are mayors so successful? Tell that to the people of Doncaster, where the Government had to send in commissioners when they had—and still have—a mayor. Tell that to the people of Stoke-on-Trent and Hartlepool, who have voted to no longer have a directly elected mayor. Go down the road and tell that to the people of Tower Hamlets, who have a directly elected mayor. It is not even a panacea internationally. Some cities in the USA have become bankrupt even though they have a directly elected mayor.
The amendment is not against directly elected mayors in areas where people wish to have them. I would not stop people who feel it appropriate and wish to have a directly elected mayor in their area from having one. However, it is arrogant to say to people who may come up with a new model that works for their area that they cannot have the powers because we have decided that their governance model is not correct. It is not only politicians who are saying that. The PwC report by Jon House, its head of local government and devolution, which was published only a couple of weeks ago, said that you have fallen into the trap of moving away from innovation and outcomes when you enforce one model of governance and people start talking about that.
I support the amendments. Amendment 3 gives flexibility and allows for the kind of innovation that the noble Lords, Lord Heseltine and Lord Deben, have talked about—I am sure other models will emerge. Secondly, what kind of Bill sets out the way a locality is governed and administered on the people’s behalf, but does not ask the people what they think about it?
Baroness Jones of Moulsecoomb (GP)
My Lords, I rise to speak in support of the amendment as one of the very few people in this House—I exclude the noble Lord, Lord Tope—who has had up close experience of the two London mayors we have had over the past 15 years. I can assure noble Lords that the system works sometimes, but not always, so to make it a compulsory element is absolutely nonsensical. Some of the language used here is a bit misleading. Talking about an elected Mayor of London as local government is a complete nonsense because it is not local government, it is regional government. The whole point of the Mayor of London is that he or she is not a local politician; they are a regional politician with responsibility for the strategic oversight of the area to which they are elected. Sometimes it works and sometimes it fails. It has failed spectacularly in London on our housing stock. The fact that we are so short of affordable and social housing is, I think, a failure of the mayor. As I say, this is not about local government, but strategic regional government.
I can assure noble Lords that making an elected mayor compulsory is nonsensical. It all depends on the talents and abilities of the person, and I would argue that while it has worked for some issues, for people here to say, “It is the answer because it is modern, innovative and fresh thinking”, is complete nonsense. Please do not be fooled; rather, accept that a mayor should be an optional extra, not compulsory.
Baroness Janke (LD)
My Lords, I too rise to support Amendments 3 and 4, and to echo some of the comments that have already been made. This is actually about choice. The Minister has rightly said that the Bill is not prescriptive, and yet it is highly prescriptive when it talks about mayors. We can see different forms of leadership working well in other parts of the country. We talk about international cities and Europe, but mayors in France are not directly elected; they are the top person on the list. People in other cities elect their leaders in different ways. Some call them mayors and some do not, and as I say, some of them are not directly elected.
We heard last week from colleagues who said that in their area of the country, a mayor would be entirely inappropriate. Indeed, the noble Baroness, Lady Hollis, has explained how it would be unacceptable and inappropriate in her own area. I would say that if we are in favour of no prescription, we should allow innovative forms of leadership to emerge in different parts of the country. We should not try to impose a certain form and say that people will not have powers if they do not adopt a mayor.
Perhaps I may talk briefly about the noble Lord, Lord Deben, and his rewriting of the history of the city of Bristol. I should point out at the start that the successes of Bristol have been well known for a long time. For the past 10 to 15 years it has been the most successful city outside London. It has the highest GDP per head of population of any English city except London and it is the European Green Capital, something that emerged through my own administration and has been carried on by the mayor. Certainly, there was instability of government when the Labour Party lost its majority on the city council, but that is no different from what has happened in many other places. Indeed, the city ran a successful three-party coalition for 18 months. I led that coalition, so it is no good the noble Lord shaking his head; that is indeed what happened—
Lord Deben
I worked with Bristol over a long period and it was one of the most difficult councils to deal with. Bristol succeeded in spite of its local government rather than because of it, and now it is succeeding because of it. That is the change.
Baroness Janke
Again, that is a rather selective rewriting of history. If you speak to the leaders of any of the three parties in Bristol, they will say that there have been successes by all the parties and they are united in being proud of their city. But as happens in national government, there can be differences of view and policy, and I do not believe that the very bad impression given by the noble Lord is at all just or reasonable.
The most important thing about these new measures is that we should address the powers. Much as we applaud what is happening in Manchester and other areas, if you were to speak to the mayor of Toulouse or the mayor of Hannover, one of Bristol’s twin cities, and say, “We are going to finance your area by giving you predetermined, formula-determined grants in sealed envelopes; you will have no power to raise your own capital or to raise revenue; and you will have no other powers than those that the Government give you”, they would be horrified. This is not the spirit of devolution.
Lord Mackay of Clashfern (Con)
My Lords, first, the Bill confers a discretion on the Secretary of State which is not restricted in any way whatever. Therefore, to say that this Bill is restrictive and that the amendments are intended to increase the discretion does not seem to be in accordance with the wording. Secondly, there are two powers in proposed new Section 107B, under Clause 1, providing for the election of a mayor under subsections (1) and (3). For some reason, these amendments apply only to subsection (1). That is rather strange. There may be a reason for that and if so, I would be glad to hear it.
Baroness Williams of Trafford
My Lords, Amendment 3 would set out in the Bill that the introduction of a mayor for a combined authority area would not be a precondition for the transfer of functions to combined authorities. We had a very lively debate on this amendment in Committee and we have had another very lively debate today. In that context, I am not surprised that we are considering the amendment.
I have been very clear on the Government’s policy on the devolution of far-reaching powers to local areas. I think we can all agree that if areas are to have such powers they must adopt strong governance and accountability arrangements. As my noble friend Lord Heseltine said, it is not for us to come up with the proposals. It is a bottom-up process, and we want to hear from areas what their proposals are for the powers and budgets they want devolved to them, and the governance arrangements that they think are necessary to support such devolution. As my noble friend Lord Deben said, we need something new.
What sort of governance arrangements will be necessary—the scale and scope of the powers—will depend on the sort of proposals put forward. Last week, in his Budget speech in the other place, the Chancellor was very clear when he stated:
“The historic devolution that we have agreed with Greater Manchester in return for a directly elected Mayor is available to other cities that want to go down a similar path”.—[Official Report, Commons, 8/7/15; col. 329.]
Our policy is therefore clear and this amendment is directly at odds with it.
We have this policy for good reasons. We have it because where there is devolution of the ambition and scale as in Greater Manchester, there needs to be a clear, single point of accountability. People need to know who is responsible for the major decisions in their area—decisions which will affect their daily lives.
My noble friend Lord Deben highlighted the importance of there being real change in local government. That is why we committed so clearly in our manifesto to legislate to implement the Greater Manchester deal and to offer similar deals to other cities that choose to have a mayor. The Bill, with its provisions on mayors, allows us to implement the Greater Manchester deal and fulfil our manifesto commitment. The amendment would, in fact, frustrate it.
As other noble Lords have said, mayoral governance for cities is a proven model that works around the world. It provides a single point of accountability. As my noble friend Lord Deben said, it has made a big difference to Bristol. When the office of the Mayor of London was created there was not much excitement across the country. As either my noble friend Lord Heseltine or my noble friend Lord Deben said—I cannot remember who it was—it is now seen as a force for progress in our capital.
Lord Harris of Haringey (Lab)
Is it not the case, however, that the election of the Mayor of London was preceded by a referendum where the people of London chose to have government in London and an elected mayor—by, if I remember correctly, a two-thirds majority?
Baroness Williams of Trafford
That is correct. I am making a point not about referenda but about the profile and remit of the Mayor of London and how it is now something that people with a very high-profile background in both local and national government wish to go for.
I must say at this point that a mayoral model is not an imposition: it has to be agreed. No order can be made to transfer powers and create new governance arrangements without the consent of all authorities involved. The Secretary of State is not imposing a mayor on anyone, but he wants to see accountability proportionate to the scale of the devolution of powers. That we have this offer does not preclude us from engaging with all areas, cities, towns and counties to consider their proposals for devolution. Quite the contrary: we are ready to have conversations with anyone. The Bill does not limit in any way the devolution proposals that areas can make, and the Government will consider any and all proposals for greater local powers. In short, our clear policy is that the Government,
“intends to support towns and counties to play their part in growing the economy, offering them the opportunity to agree devolution deals, and providing local people with the levers they need to boost growth”.
That was made clear in the Budget.
Lord Grocott
If what the Minister says is accurate in practice—that any proposal from below, or however you want to describe it, is entirely up to local initiative and will go ahead if there is agreement—presumably she can agree with Amendment 3. She is arguing that it is basically a permissive thing: that mayors may or may not be there, dependent on local initiatives. So I assume from what she said that she would not be in any way opposed to Amendment 3.
Baroness Williams of Trafford
I will address the noble Lord’s point shortly.
Amendment 4 would insert a new subsection into new Section 107B to allow the Secretary of State to refuse to make an order providing for there to be a mayor if the proposal put forward by the area does not provide sufficient democratic accountability, does not have the support of local authority electors or would risk the proper functioning of local government in the area. Not only is this unnecessary, given that the Secretary of State always has a judgment as to whether to make an order; it does not reflect the context in which the provisions of the Bill will be used: to implement bespoke devolution deals agreed with areas—to be precise, agreed with those democratically elected to represent the area and who are accountable to it through the ballot box. It would be quite wrong to have considerations for devolution deals that in some way sought to have the Secretary of State second-guessing those local democratically elected representatives, or turning discussion of the deal into some sort of tick-box exercise.
Lord Lester of Herne Hill
Is the Minister saying, therefore, that the factors in proposed paragraphs (a), (b) and (c) in Amendment 4 would be irrelevant considerations that the Secretary of State would not be entitled to take into account?
Baroness Williams of Trafford
My Lords, I am saying that it will be an agreement between the Secretary of State and local electors that will determine what the deal looks like, if that helps.
Baroness Williams of Trafford
I am sorry—combined authority areas. I apologise; this debate has gone on for a while.
I wish to address some of the points that noble Lords raised. The noble Lord, Lord Shipley, talked about the mayor not having capacity to fulfil all functions. As my noble friend Lord Heseltine said, that is common practice in cities across the world which seem to manage to fulfil this perfectly well. However, the mayor will have power to delegate functions to a deputy mayor or officers to ensure that responsibilities are properly fulfilled. Crucially, regardless of whether a particular power is delegated, the mayor is, and is widely seen to be, accountable for the exercise of that power.
The noble Lord, Lord Shipley, also talked about areas coming forward with their own ideas on governance. As I have said on many an occasion, we are ready to have a conversation with any area about its governance proposals alongside its proposals for power to be devolved to it. The governance needs to be proportionate to the powers, delivering accountability and the necessary transparency.
The noble Lords, Lord McKenzie and Lord Shipley, asked the crucial question: what is something less? As I said, the form of governance needs to be proportionate to the scope and nature of the power being devolved. Where less than major powers are devolved, because that is all an area wishes for, the existing governance of an area may be appropriate. Again, depending on the nature of powers devolved, a combined authority, with the governance combined authorities have today, may be appropriate—that is, governance by the leaders of the area collectively. However, with major powers there needs to be a single point of accountability, and that is provided by a directly elected individual.
Baroness Jones of Moulsecoomb
Does the Minister agree that, when you have this much power vested in one person, you also need a very good system of accountability and scrutiny? Here in London that has not happened enough. As a member of the London body, I know that we have not had enough powers. Is that something the Government are thinking about?
Baroness Williams of Trafford
The noble Baroness’s question is the subject of later amendments. Certainly, the London model is not being considered in Greater Manchester. However, during the Bill’s passage, there has been a lot of discussion on the need to strengthen scrutiny.
Lord McKenzie of Luton
Before the Minister moves on, will she clarify what is included in “major powers”? What are major powers and less than major powers or minor powers? That is the dividing line in this matter.
Baroness Williams of Trafford
As noble Lords will see, an example of major powers is devolution for Greater Manchester. That is an example of a suite of major powers.
I should like to make some progress. The noble Lord, Lord Grocott, referred to Amendment 3, which would obstruct our policy of allowing major powers to be devolved to a city because there is a necessary single point of accountability—that is, the mayor. The noble Lord also said that people should have a referendum to decide whether to have a metro mayor. We recognise that in the past some cities have rejected the opportunity to elect a mayor. This time it is an entirely different proposition. It is about putting in place a devolution deal which the democratically elected representatives of the place have agreed with government. Part of that deal is the necessity for robust local governance for the new devolved powers, and for a powerful point of accountability such as a mayor. It is for the elected representatives of an area who have a democratic mandate to decide, in discussions with government, whether they wish to introduce a mayor and benefit from major devolved powers.
Lord Scriven
If, for example, my own area of Sheffield decides to go for this with a mayor and it is then not deemed to be as successful as some of the proponents want, and the public and the politicians in that area wish to move away from the mayoral model, what would be the procedure to do that—to prove that it was not an imposition, that actually it was a deal, it was voluntary and could be withdrawn from by both the public and the politicians of that area?
Baroness Williams of Trafford
My Lords, if a local area agreed a process with government and it was done through a parliamentary process, that local area would then have to go back to Parliament in some way and say that the local electors did not wish to have this any more. I am not going to stand here and prescribe a particular set of circumstances in which a particular area may not wish what it had agreed with government to continue to be the case. Having agreed it through a parliamentary process, it would have to go back through that parliamentary process and explain why the local electors no longer wished for it to be the case.
The noble Baroness, Lady Janke, talked about predetermined grants in envelopes. As I say, I have spent the entire Bill demonstrating that this is not the case. Nothing is predetermined. That has caused confusion in some ways in that there has been constant pushback on me to prescribe, and we are not prescribing. I hope that with these explanations the noble Lord will feel able to withdraw his amendment.
Lord Shipley
The Minister said two separate things. The first was that it was for local areas to come up with proposals for devolution and the Government were keen to hear what those were. Secondly, she said that to have major powers devolved requires a mayor, and she gave Greater Manchester as an example. Does the Minister have a list of the powers that can be devolved without an elected mayor and those that can be devolved only if there is an elected mayor? It seems absolutely central to this issue because at the moment it is not clear—certainly not to me and, I suspect, others in your Lordships’ House—exactly what the Government’s offer is.
Baroness Williams of Trafford
My Lords, I do not and will not have a list. As I have said repeatedly, what powers are devolved will be up to agreement between local areas and the Secretary of State.
Lord McKenzie of Luton
My Lords, this has been an extensive and good debate and the time moves on, so forgive me if I do not respond to each point that noble Lords have made, whether it was as a trip through history about what has happened to elected mayors or the stage that we have reached today. The problems with the London system, some of the time, and the difficulties that other areas have found were mentioned.
I would like to challenge the proposition that the amendments are wrecking amendments. I am bound to say to the noble Lord, Lord Heseltine, that that really is not the case. It was not the intent and is not their substance. If we look at the thrust of all the amendments that are before us today and will be on Wednesday, they are overwhelmingly about trying to improve the Bill and achieve the very thing that he wants and campaigns for. It is unhelpful to characterise these amendments as wrecking when, in total, we are trying to improve the Bill so that devolution can be delivered across the country.
The noble Lord, Lord Shipley, asked the pertinent questions about major powers—what is in and what is out—and of course we got the usual answer. I do not think that anybody sees it as a credible response to say that nothing is being imposed on people because the Bill is a framework Bill, in circumstances where the Government make it absolutely clear from the start that you can get certain powers only if you have an elected mayor. That is not a process of not imposing anything on anybody. It is making sure that the price paid is very clear up front, in some circumstances. It is very unclear in other circumstances what price will be asked, depending on what powers are available. I am bound to say that whether we are in favour of or against elected mayors instinctively, we did not see it as a ladder up which budding leaders could climb—and even less so a retirement job for ex-Cabinet Ministers. I did not think that that was the process we were involved in today.
The noble Lord, Lord Heseltine, made a powerful speech reiterating his passion for devolution and what it could lead to. We support all that but he himself said that if somebody comes up with something it will be considered, so seemingly from his point of view there is not an inevitable imposition of an elected mayor. The noble Lord may feel that something credible would not come up, and he may or may not be right. But even he seemed to recognise that there should be scope, which is effectively what Amendment 3 is seeking. It may be, in the terms used by the noble and learned Lord, Lord Mackay, that the wording is imperfect but then it is the job of government at Third Reading to tie that up.
Lord Mackay of Clashfern
I am sorry to interrupt—it is not my habit—but the present Bill simply gives a discretion to the Minister, absolutely free. There is no limit on that discretion to having an elected mayor. It is a discretion to consider the particular proposals made. I understood the Government to have said in the debate that the idea of an elected mayor, while very attractive from their point of view, was not essential for every proposal that might come forward.
Lord McKenzie of Luton
My Lords, we accept that there is a discretion but we know that that discretion will inevitably be operated in certain ways in certain circumstances. The Government will insist upon an elected mayor and the discretion, which I accept is permitted under the Bill, will be exercised in a certain way. This is about trying to get clarity or preclude that being an inevitable part of a deal. If somebody wants an elected mayor and can put forward governance arrangements and credibility around all that, fine. But if they do not, why should that not inevitably be considered fairly by the Government in the negotiations which go on?
Lord Mackay of Clashfern
Nothing that I have seen anywhere so far says that the Government can give powers under these proposals only if there is an elected mayor. It is left completely open. All this seems to be based on is some suggestion that that is what the Government want to do. However, the Government have proposed a Bill that does not have that in it. I cannot myself see why that discretion should be limited.
Lord McKenzie of Luton
The noble and learned Lord is right that there is a discretion in the Bill, but we know, alongside that, that the Government have made it absolutely clear that an elected mayor will be insisted upon in a range of circumstances. We are seeking to determine that that insistence should be precluded, not that the option should not be available, if that is what a combined area wants. The starting point should not be that you must have an elected mayor in that range of circumstances.
It seems that there is some recognition that there should be discretion for combined authorities to come forward—the Minister has said that. It is all very well recognising that, but at the same time they are saying, in this place and in the Chancellor’s Statement at the other end, that you have to have an elected mayor, come what may. There is an inconsistency between those positions, and this amendment is trying to clarify that inconsistency. We do not think that there should be that insistence. If people want this and can come forward with a credible model, fine; but if the starting point of these deals is that you must have an elected mayor, that is wrong and we oppose it.
This a great shame because there is substantial agreement across the Chamber, I think, about the thrust of the Bill. The one point where it jars is this obsession and insistence on an elected mayor—not in the Bill itself but in terms of how we know it will be applied and how we know it is being applied in the case of Greater Manchester and other areas. That is the point that divides us. Given the support that we have across the piece for the Bill, it is a great shame that we have to divide on this, but I propose to divide and test the opinion of the House.
“(1) The term of office of a mayor is to be four years.
(2) The first election for the return of a mayor is to take place on the first day of ordinary elections of councillors of a constituent council to take place after the end of the period of 6 months beginning with the day on which the order under section 107A comes into force.
(3) Subsequent elections for the return of a mayor are to take place in every fourth year thereafter on the same day as the ordinary election of councillors of that constituent council.
(4) But this paragraph has effect subject to any provision made under paragraph 2.
(5) In this paragraph “constituent council” means—
(a) a county council the whole or any part of whose area is within the area of the combined authority, or(b) a district council whose area is within the area of the combined authority.”
Baroness Williams of Trafford
Amendment 5 sets a default term of office for an elected mayor of a combined authority area and a default date of the election for the return of an elected mayor for a combined authority area. Amendment 8 is a minor and technical amendment.
As the Bill currently stands, the term of office and the date of election are set by order by the Secretary of State. Following the comments of the Delegated Powers and Regulatory Reform Committee and an amendment brought forward by the noble Lords, Lord McKenzie and Lord Beecham, in Committee, we wish to include default provisions in the Bill to apply in cases where specific orders are not made.
The Delegated Powers and Regulatory Reform Committee suggested that the Bill’s order-making powers should be limited to specifying the timing and frequency of metro mayor elections only at the initial establishment of the office of mayor. We do not believe it right to limit the order-making power in this way, as I shall explain, but to provide some assurance that with Amendment 5 we are following the precedent in the Local Government Act 2000, which was referred to by the Delegated Powers and Regulatory Reform Committee. It provides in the Bill default timings of mayoral elections and the mayoral term. Equally, to retain the flexibility needed, the Secretary of State will be able to make specific orders under paragraphs 2(a) and 2(c) of new Schedule 5B to the Local Democracy, Economic Development and Construction Act 2009. The amendments providing for the default position in no way curtail the scope of the order-making powers in Schedule 5B.
The ability for the Secretary of State to set the timings of elections by order allows for the fact that there is currently no single pattern of local elections across the country with which a new mayoral election may be synchronised. It also recognises that devolution deals will be bespoke, and therefore it is possible that different arrangements may be sought by, and agreed with, different areas. For example, an area may wish its mayoral election to be held in a year when there are no council elections, but another area may wish to combine mayoral and council elections. Again, for example, while we expect that probably most deals with metro mayors will have mayoral terms of four years, it is possible that an area may wish to have, say, five-year terms similar to the parliamentary term.
Returning to the default position that we are providing, it reflects that in general a mayoral term will be four years and the election will take place at the same time as council elections in the combined authority area. Hence, under the default provisions, the first election of the mayor will take place at the next local council elections not less than six months after the order creating the mayoral combined authority comes into force, and elections will be every four years thereafter.
Amendment 8 is a minor and technical amendment to ensure that the provision in the Bill applies equally to the disqualification of an individual in respect of their being, or being elected as, a mayor, as well as more specifically in relation to their being, or being elected as, the mayor for that area.
Lord Grocott (Lab)
My Lords, I am grateful for a fair amount of what the Minister said. My Amendments 6 and 7 are, I think, about the shortest and, in many ways, the simplest in the Marshalled List. Amendment 6 suggests that mayoral elections should basically be every four years and Amendment 7 suggests that there should be a maximum of two terms.
On the four years, I think the Minister has probably gone as far as she can. It may not be precisely in her amendment, but in truth the Government seem to be saying that four years is a reasonable, sensible term of office for a mayor. It struck me as very odd indeed—I said so in Committee—that the term of office of the mayor was left entirely to ministerial order in the original Bill. In theory that could provide for a term of office of four, five, six, seven, eight or nine years, or any other number you care to think about. It is such a fundamental part of a democracy to know when an election is going to take place that it is essential to have at least some reference to it in the Bill, and I welcome the fact that the Government have put down an amendment. It does not do everything I would like, but in life you do not get everything.
Amendment 7 would effectively limit the mayor’s term of office to two four-year terms. That, the maths will tell us, is a maximum of eight years. I emphasise that the amendment would be in no way retrospective; I do not think that, under the Bill, it could be. It does not say to those people who are directly elected mayors at the moment—I would not dare say this—“Sorry, you’ve had your eight years and you must go”. It would simply apply to the provisions of the Bill.
I submit that this amendment is very important. I have made it plain that I do not like directly elected mayors. I much prefer the parliamentary system to the presidential one, and there are checks and balances built into the leadership of local authorities at present. Leaders can be removed if they are not doing the job properly. It has never inhibited great leaders of local government in the past, as far as I can make out. I must admit that from some of the comments we have heard in earlier debates you would think that local government had been bereft of outstanding leaders. I do not think that Joe Chamberlain did too badly and I thought that Herbert Morrison was not too bad either. Anyway, we have had that debate.
What I know is that the great strength of the present system, prior to directly elected mayors, is that there is a daily check and balance on the performance of the leader, and if they are not good enough they can be removed. We all know that that has happened in local authorities; we probably all have our own examples. The problem with a directly elected mayor, and I do not think that the Bill addresses it, is that once you have elected them—there is one election once, and that is it—there is very little under this system to deal with a mayor who is considered by his or her peers not to be doing the job very well. There is no power of recall.
Perhaps the Minister could spell out what the checks would be if it became manifest that a mayor was not doing the job properly—obviously, short of a criminal offence. The noble Lord, Lord Heseltine, referred in the earlier debate to checks and balances, but as far as I can see there are none. That is why the amendment is important; again, I will stand corrected if other people have better international examples than I have, but I think in most systems where there are direct elections there is a limit somewhere to the number of times that you can be directly elected. There are good reasons for that, not least that there is an inevitable tendency for directly elected mayors to see the job of the administration as basically to secure their re-election; that tends to develop in their minds and in the operation of many of their staff.
At its zenith, the American system decided that eight years was long enough, and if it is long enough for an American President it is probably long enough for the mayor of a city in the United Kingdom. I suggest that this has been a mistake in previous legislation about elected mayors; it simply has not provided for limits of terms of office, and it is right that we should do so. I think that the Minister even acknowledged that there are some problems that have not entirely been addressed in that legislation. I submit to the House that this amendment is well worthy of consideration.
Lord Campbell-Savours (Lab)
My Lords, in intervening briefly, I make it clear that I am a passionate supporter of the whole mayoral principle. I believe in elected mayors and have done from the very beginning. I saw them in France when I lived there many years ago. I believe that the system works and it is better than other models, so I have no problem with it at all. However, I also support my noble friend’s amendments.
It is more than 40 years since I was in local government but I always felt that very often local government becomes lazy. People do not always get into that position—there are often very good mayors outside the mayoral model that we are discussing, and leaders of local authorities can be there for years doing a perfectly good job—but you often find in local authorities that people simply become lazy, and they should be moved on. However, they have such control over what is going on around them in the local authority that they cannot be moved. The people whom they have appointed are somehow compromised, and they spend more time ensuring that their position is safe than in engaging themselves in the innovation that was talked about by a number of those who contributed to the last debate.
I think that a term of eight years is quite sufficient. It would keep the mayor on his or her toes, and they would want to be seen to be innovative at every stage. In many ways, I think it would avoid the kind of problems that I have heard and read about over recent years when I have looked at what happened in some of the mayoralties. The recent problems in east London in many ways reflect what I am saying: someone had total control and now, fortunately—through the courts, in the end—we have managed to get rid of them. If you have a model that is based on a more limited term, there is less opportunity for those sorts of problems to arise.
Lord Beecham (Lab)
My Lords, we seem to be moving on to somewhat more consensual territory after the excitement of the past couple of hours. When I listen to discussions about the offer of devolution being based on a requirement to have an elected mayor, I am rather reminded of Henry Ford’s famous offer that anyone could buy a car of any colour as long as it was black. The mayoral model seems to be that you can have devolution as long as the devolution car is driven by an elected mayor; it is a less than free choice.
However, the Minister’s amendments are acceptable. They certainly incorporate some of the concerns that were mentioned in Committee, particularly with the default position that we are clear as to the limits that would be applied to the length of term. No doubt the Lord Chancellor, Mr Gove, has been sending over memos about the wording, or indeed the grammar, in reference to Amendment 8.
I was of course interested in my noble friend Lord Grocott’s amendments, one of which is effectively met, I suggest, by the government amendment. I think that four or five years is seen by the Minister as a maximum, and that seems to be reasonable. I am somewhat in two minds about my noble friend’s suggestion of a limit of two terms. I stood down from the leadership of Newcastle City Council 20 years ago and, in reference to the remarks from the noble Lord, Lord Heseltine, about the recognition or otherwise of council leaders as opposed to mayors, I have to say that 20 years on people still remember—I cannot say with what relish—my service as council leader for a period of 17 and a half years before that. It is possible to hold office, be accountable and, I hope, make a contribution for a somewhat longer period than two terms would necessarily imply. For myself, I am prepared to accept the Government’s position.
However, it might be worth keeping this matter under review. I suppose that in any event it would be reviewed over time, and we might have examples in this country, which so far we have been spared, of the kind of conduct in office that sometimes has occurred, particularly in the United States but in other jurisdictions as well, where, frankly, there needs to be some kind of limit. In our political culture, we have not experienced much of that. On balance, I invite my noble friend not to divide the House on that amendment. For my part, I am content with the Minister’s amendments.
Baroness Williams of Trafford
My Lords, I will address some of the points made by the noble Lord, Lord Grocott, in the course of moving his amendment. He said that you cannot get rid of mayors. In any elected office that I can think of, you can get rid of leaders or back-bench councillors in two ways: first, through the party’s electoral or selection arrangements, and, secondly, by the ballot box. Therefore, just as with local authorities, so with the office of mayor there is the ability to get rid of the mayor.
The noble Lord also talked about the power of recall. Again, referencing it back to local authorities, there is not a power of recall within local authority arrangements, either. Obviously, they are talking about this in the House of Commons: there is not a power of recall in local government. The build-up is incredible, but later on in the debate we will talk about scrutiny—and there is an ability to scrutinise both local authority leaders and an elected mayor.
The noble Lord’s third point was on limiting a mayor to two terms of office. First, in this country there are no other arrangements that replicate that, but I thought of two leaders, one of whom I will name, the other of whom I will not. Richard Leese is one of them; he has been leader for almost 20 years now, and his continuity within Manchester City Council has enhanced the city greatly. I will not name another local authority leader, who was in power for 35 years; I do not think that a single year of his leadership was beneficial to the local area—which is why I will not name him. Therefore, I can see that that could be true in some areas. However, it is also for local electors and political parties to make that change if they so wish.
Lord Beecham
My Lords, does the noble Baroness recall the leader of a council not too far away from Manchester who led the council for some 50 years before retiring at the age of 85 to make way for a younger successor who was 76?
Baroness Williams of Trafford
I do not think that we are thinking of the same person, but that is very interesting. I thank the noble Lord and ask him not to press his amendments.
Lord Beecham
Lord Beecham
My Lords, Amendments 9, 11, 12 and 14 in this group relate to the functions of the elected mayor and his relationship with the combined authority in that context. Amendment 9 requires the consent of the combined authority to the appointment of a deputy. In Committee the Minister asserted that given that the mayor would by definition have been elected, it was only reasonable for him or her to appoint their deputy. However, we are dealing here with very wide powers over potentially sizable geographical areas, as we heard earlier this afternoon, and certainly with large populations.
The amendment does not advocate a sort of “House of Cards” process, as chillingly exemplified by Kevin Spacey in the United States version of the entertaining drama by the noble Lord, Lord Dobbs. However, it is surely reasonable for the appointment of a deputy—even one drawn from the members of the combined authority—to be approved by that body, especially as there is effectively no limit on the character and extent of the powers that might be so delegated. Moreover, of course, the deputy would, in the event of a vacancy, step into the mayoral shoes pending a fresh election. For these reasons Amendment 12 is also relevant, as it requires the consent of the combined authority to the delegation of powers by the mayor to the deputy or, as the Bill prescribes, any other officer or member. After all, neither the public nor the combined authority would have had a say in those appointments.
Amendment 11 seeks to ensure that mayoral functions which the Secretary of State may make exercisable only by the mayor should be assigned only with the consent of the combined authority. That appears to be the position, if I read it correctly, of the Greater Manchester agreement, and if it is right for Manchester, I suggest that it should be for more general application. Finally, Amendment 14 reinforces the need for combined authority consent to a Secretary of State’s order as to the delegation made under subsection (3). I beg to move.
Lord Shipley
My Lords, I will speak to Amendments 10 and 13 in this group. Broadly speaking, whereas the amendments moved by the noble Lord, Lord Beecham, are about securing the approval of the combined authorities, ours require the approval of the overview and scrutiny committee. As we said in Committee, it is much better for that committee to do it, for three reasons. First, it is independent of the mayor and of the combined authority. Secondly, it can be objective and can hold a hearing in public to assess the suitability of a proposed person, thus giving real effect to the principles of scrutiny. Thirdly, it can satisfy itself that the person selected can represent the interests of all parts of its combined authority area, which can sometimes be very large.
In a sense we debated this in Committee, and I listened carefully to the Minister’s answer at the time. I am not convinced that it is right to give the powers of what could appear to be patronage to a single individual. Nor am I convinced that the members of a combined authority, who were appointed as opposed to being directly elected to it, should simply be given the power to decide or to agree who the deputy should be. I would be much happier if we had an independent process which the overview and scrutiny process would look after. I therefore look forward to hearing the Minister’s response to the point about how you ensure that those who hold very senior, responsible jobs, which are very well remunerated, can maintain the confidence of the general public.
Baroness Williams of Trafford
My Lords, these amendments are all about requiring members of the combined authority or overview and scrutiny committee to be involved in actions which are, quite rightly, those of the elected mayor.
I will first speak to Amendment 11, which would insert the requirement that the combined authority must consent to functions of the combined authority being exercised by the mayor. I do not disagree with what the amendment seeks to achieve. There are a number of circumstances in which an order could be made to make a function of the combined authority exercisable only by the mayor. Our intention is that in all circumstances the combined authority must give consent—or, if this is at the initial stage of setting up the combined authority, the constituent councils must do so.
First, when an order is made to create the post of mayor and transfer powers to the combined authority, in this circumstance nothing can happen without the consent of the combined authority or the local councils involved. Clearly, consent would not be given if the order proposed to give a mayor powers with which the councils or combined authority were not content. Secondly, when an order is made to transfer further powers to a combined authority, similarly, such an order would require consent from all the local councils.
Finally, and notwithstanding our intention, I accept that there could be, at least in theory, a subsequent order to make an existing function of the combined authority a function exercisable only by the mayor. We are ready to accept that any such lacuna in the legislation should be addressed and we are minded to accept this amendment. However, the drafting will need further consideration and, if noble Lords will allow, I will come back to it at Third Reading.
Amendments 9 and 10 would require the mayor to obtain the consent of the combined authority or, in the case of Amendment 10, the overview and scrutiny committee before appointing the deputy mayor. For mayoral governance to be effective, the mayor and the deputy mayor must be able to work together and the mayor must have confidence in his or her deputy. Moreover, the mayor’s choice of deputy mayor is very restricted. As provided for in the Bill, the deputy mayor must be a member of the combined authority, so the mayor is already choosing from a small group of people.
In practice, a mayor will consult some of or all the members of a combined authority about a deputy mayoral appointment, but it would be wrong for the members of the combined authority or the overview and scrutiny committee to have the ultimate say over who the deputy mayor is. The noble Lord, Lord Beecham, talked about Greater Manchester and he is absolutely correct that that is an interim arrangement.
The mayor, with a clear mandate, needs to be able to have the say over who among the members of the combined authority will be the deputy and who will assist him or her in delivering what he or she has promised the voters. Giving the combined authority or overview and scrutiny committee the final say as to whether a person can or cannot be the deputy opens up the possibility of appointments which would hinder the mayor and prevent the mayor and deputy working together effectively and smoothly for a common purpose. These amendments are therefore not a sensible check or balance on the exercise of executive functions and I invite noble Lords not to press them.
Amendments 12, 13 and 14 would require a mayor to consult the combined authority or, in the case of Amendment 13, the overview and scrutiny committee before delegating a general function to the deputy mayor, another member or an officer. The provisions in the Bill relating to delegation align with the policy for a local authority mayor or leader, who may arrange for the discharge of functions by members of the executive or officers of the authority. Although the mayor may delegate functions, he or she remains accountable for any actions taken and is accountable directly to the electorate.
I understand the thoughts behind these amendments—that is, to ensure that a mayor is indeed effectively and transparently held to account and that, while there is the capacity for strong executive action, equally the right checks and balances are in place to give confidence in that respect and ensure accountability. However, such checks and balances will not be delivered if executive and non-executive actions are confused by involving the members of the combined authority in decisions such as how the mayor performs his or her role.
Later, we will discuss the appropriate strong and transparent overview and scrutiny to ensure sensible and robust checks and balances on the actions of the mayor and the combined authority. It is entirely right that the mayor is held to account, but he or she must also be able to deliver effectively on the commitments made to the electorate, and these amendments could be severely detrimental to that. With those explanations, I hope that noble Lords will agree not to press their amendments.
Lord Beecham
My Lords, I am most grateful to the Minister for accepting the principle of Amendment 11 and I look forward to working with her to agree a form of words when we get to Third Reading.
I am slightly disappointed at the response to some of the other amendments in my name and that of my noble friend Lord McKenzie—in particular, about the delegation of functions. Given the huge scale of the authorities that we are talking about and the huge responsibilities which it is hoped will be devolved, it seems to me that this is a rather different role from that of a council leader or chief executive or even an elected mayor in the authorities as presently constituted. However, I will not press those amendments and will rely on the noble Baroness’s undertaking to revert to the subject of Amendment 11 at Third Reading. I beg leave to withdraw the amendment.
Lord Shipley
“107F Discharge of functions: access to press and the public
(1) In transferring any functions of the mayoral combined authority to the mayor under section 107D or 107E, the Secretary of State shall make regulations to provide for press and public access to information and meetings of—
(a) members or officers of the combined authority, or(b) any combination of members and officers of the authority,concerning how the function is discharged.(2) Subsection (1) does not apply to access to information and meetings concerning the discharge of these functions governed by Part V of the Local Government Act 1972, the Local Government (Access to Information) Act 1985 or the Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012.
(3) For the purposes of subsection (1), “access” includes but is not limited to—
(a) attending and viewing,(b) taking notes,(c) taking a visual or audio recording,(d) prior provision, inspection and copying of agendas, reports, background papers and minutes, or(e) pre-publicity of any significant decisions to be made or considered at the meeting.(4) For the purposes of subsection (3)(e), “significant” means significant with regard to the authority’s expenditure or the impact on local communities.”
Lord Shipley
My Lords, this amendment would require meetings and documents concerning the discharge of functions by the mayor or the combined authority to be accessible to the press and public unless they were necessarily excluded by existing law. This is important to ensure transparency of decision-making. The Minister has said on several occasions this afternoon that an elected mayor would be a single point of accountability. It is therefore important that that accountability is transparent.
The amendment talks about the discharge of functions in transferring any functions of the mayoral combined authority to the mayor under new Sections 107D or 107E introduced by the Bill. New Section 107D talks about the general functions of mayors. It says:
“The Secretary of State may by order make provision for any function of a mayoral combined authority to be a function exercisable only by the mayor”.
New Section 107E, which relates to the policing functions of mayors, says:
“The Secretary of State may by order provide for the mayor for the area of a combined authority to exercise functions of a police and crime commissioner in relation to that area”.
On the face of it, the Secretary of State can require a further centralisation of power to the elected mayor from a mayoral combined authority, and it is clear that the function would be exercisable only by that single person. Therefore, if the power lies with a single person and there is a single point of accountability, it really does matter that that person and the decisions they make are seen by the general public to be properly accounted for.
The aim of Amendment 14A is to allow the Minister to counteract any slide towards behind-closed-doors decision-making. That seems to be all the more important given that, as the Bill stands now, overview and scrutiny applies only once decisions have been made and not while they are being discussed. I have a very serious concern that the Bill could be used to reduce the rights of the press and public to access meetings and information, without which the general public may not be properly informed or engaged. I do not want more and more decisions made behind closed doors. The Minister herself said in Committee in reply to our Amendment 42A that,
“the decision-making has to be in public”,—[Official Report, 29/6/15; col. 1810.]
but of course it is not just the announcement of a decision but the discussion that can matter profoundly, in that the discussion can explain how the decision was reached.
I fear that the Bill as drafted runs the risk of encouraging further secrecy outside the scope of the Local Government Act 1972 and subsequent regulations. Therefore, I hope that the Minister will agree that we should have on the face of the Bill the right of the press, the media generally and the public to attend meetings and to receive information, as is currently the standard within local government. I beg to move.
Lord Heseltine
My Lords, I see reference in the amendments to public access to officials of the council. I am opposed to that concept. I have had the privilege of serving in Government after Government and value hugely the advice that comes from officials, but I have never believed that officials always give you agreed advice. Some do, but the composition of such advice starts at a relatively low level in the official machine. Committees and dialogues take place and a consensus emerges. That becomes the agreement that officials put to Ministers.
Often, one finds oneself in disagreement with that advice. Some of the most rewarding experiences that I have taken part in are when you get the officials to break down the consensus which has been put to you. You may find that the more-established and long-serving officials have taken a rather conservative view, while some of the younger, more energetic, adventurous or imaginative—you can use any language you like—have a more dramatic option which has been suppressed in the process. In the end, it is for Ministers to take their choice: that is what they are paid to do.
If we were to have full public access to the official process, the consequence would be that Ministers would try to ensure that they got the advice they wanted. The easy way to do that is to politicise the Civil Service or the officials in local government and to ensure that the people providing the advice do not leave you with any great issues of controversy, which will be fanned by the press the moment that they get their hands on them.
Although I am in favour of the thrust towards openness and accountability in local government, as in national government, and of the facts being widely available, I am not in favour of there being exposure of the official debate which takes place in providing advice to councillors or, in my experience, Ministers.
Lord Shipley
Perhaps the noble Lord will comment on the fact that within local government now, officers of councils are required to give advice publicly when full council meetings or council committee meetings are held, so there would be nothing new in that happening. I understand his concern about official advice being given at the point at which ideas are being developed, but will he bear in mind that the amendment states that,
“the Secretary of State shall make regulations”?
Broadly speaking, that is designed to prevent a slide towards access to the press and the general public being denied through the structures now being created.
Lord Heseltine
Unlike the noble Lord, I have never served in local government, so I cannot speak with his experience. As I understand it, officials give advice in public, but I do not think that meetings of officials before they formulate that advice are open to public or press scrutiny. I was addressing that concern when I intervened.
Lord Scriven
My Lords, I have some practical experience of this as a former council leader. When I became leader of the council in Sheffield, we had an economic development agency which met in private. Everything was in private—advice, meetings and papers—because it was deemed to be somehow arm’s length and pseudo public sector. Through a very hard-fought and long battle, I thought that it was absolutely right that that was dealt with in public, because huge amounts of public money were being spent on behalf of the people of Sheffield. The reason to write this in the Bill is to open up the advice and the decisions made.
I hear what the noble Lord, Lord Heseltine, says, but exactly the same arguments were used in another place when what became the Freedom of Information Act was published. With freedom of information, a lot of the advice given now could be made public. This is just the next step concerning that type of advice. I see no reason why, if someone wishes to understand a decision in the area where they live, where multi-billions of pounds are spent on their behalf to improve their lives, they cannot be privy to some of the advice given before someone makes a decision. It is really important that both the press and the public understand the process that has been carried out to reach a decision, not just the decision itself.
My recent practical experience in local government, in an area of economic development, makes me believe that this is the right thing to do. Open decision-making is good decision-making; closed decision-making is bad decision-making, on the whole. It is really important for the press and the public to be able to understand both the decision and the process of how their taxes are spent—to know how decisions are made to improve their area. It is for those reasons, both the practical ones based on what I saw in Sheffield and to take freedom of information one step further, that it is really important that people can understand the advice given to and the process followed by politicians, the mayor or the combined authority to enable them to come to a decision.
Lord McKenzie of Luton
My Lords, we are fully committed to openness and transparency in the proceedings of local government, combined authorities and mayoral combined authorities. We would draw the line so that the same rules operated as for local government currently. We would have reservations about taking it back beyond that—certainly taking it into the area of advice.
That raises a question; I do not know whether the Minister can help us with it. When there are discussions and negotiations about devolution deals, are they in the public domain?
Lord Brooke of Sutton Mandeville (Con)
My Lords, my first intervention in proceedings on the Bill were when we were discussing the same subject in Committee. There were references then, as there have been today, to the 1972 Act. The particular episode to which I referred in that previous debate was the Private Member’s Bill introduced by Margaret Thatcher in the 1959-64 Parliament, which was her first real appearance on the parliamentary scene. My late noble kinsman sat on the Front Bench throughout the passage of her Bill.
I have taken an interest in the subject going back a great deal further, to that moment in 1809—we were fighting the French at the time—when the Treasury intervened to say that three particular government departments which it had nominated must by 12 noon on any day, on anything which had been in any way controversial or interesting in the morning’s papers, agree the Government’s position, which would then literally, in the language of government, become the line to take thereafter for the rest of the day. When I served as a Treasury Minister, the reason that I had responsibility for the Central Office of Information went back to that fact, because it was the Treasury which had set up the system in the first place.
I want also to say a brief word about the passage of the then Greater London Authority Bill, because it was the first Bill under which the evidence of those advising councillors in local authorities could be made available to the public at large. I am not in any way intending to pour anything hostile into wounds that are long since healed, but the Minister in charge of that Bill made an extremely loyal and long-term defence of the fact that that provision was in the text of the Bill—which it was not. I am afraid that I did go on pestering the Minister in charge of the Bill—no names, no pack-drill—as to where in the text of the Bill, which we were looking at, that information was. Eventually, he broke down and admitted that they were planning to do it and were going to put down an amendment, but had not actually put down the amendment before. It was very loyal of him to have defended and covered for the junior Minister, the Minister who should have put it down.
This has long been an interest and I shall be very interested indeed to hear what my noble friend says in responding to the propositions that have been put in front of her.
Lord Berkeley of Knighton (CB)
My Lords, not having worked in local government but having sat on boards that involved public money, such as that of the Royal Opera House, I very much like to see open debate. On the other hand, I think the point that the noble Lord, Lord Heseltine, made is very pertinent. Sometimes, if people cannot think outside the box, as we had to when the Royal Opera House was faced with closure, what tends to happen is that the things that the proponents of this amendment want can be completely thwarted: discussion can become more closed because people are frightened of saying what needs to be said, as it will create such a storm. I am not going to come down either way on this but I see both points. As somebody who has sat on a board and wrestled with this, I reiterate that I understand the point that the noble Lord, Lord Heseltine, made.
Baroness Williams of Trafford
My Lords, Amendment 14A seeks to ensure that the public have full and free access to combined authority meetings and documents and meetings of officers regarding the discharge of functions. The noble Lord, Lord McKenzie, put it absolutely right when he said that the same rules must apply to local authorities as do to combined authorities.
The noble Lord also asked whether devolution deals would be done under the gaze of the public and cameras. I imagine that, when a deal gets to the stage of a combined authority, that decision-making process would be in full view of the public and may even be recorded in some circumstances. Certainly that is allowed now under the rules of 2014. The process of developing a deal would involve a range of discussions, as the noble Lord will appreciate, between members and Ministers and between officers and officials. Crucially, decisions on whether or not to agree to anything will, as I said, be formal decisions of the combined authority; and—devolving down further—the constituent councils would have to agree to it as well, subject to the openness and access requirements applicable to councils and combined authorities.
The Local Government Act 1972, which applies to a combined authority just as it applies to a local authority, provides that all meetings of a combined authority must be open to the public except in limited and defined circumstances. A meeting of a combined authority, as with all other council meetings, may be closed to the public only in two circumstances: first, if the presence of the public is likely to result in the authority breaching a legal obligation about the keeping of confidential information; and, secondly, if the authority decides, by passing a resolution of its members, that exempt information, for example information relating to the financial affairs of a particular person, would likely be disclosed. The normal rules about access to agendas and documents that apply to local authorities apply to meetings of a combined authority—that is, to meetings of all or some of the members of the combined authority in their role as members of the combined authority to discharge the functions of the combined authority. Moreover, the Conservative-led coalition Government made new regulations in 2014 to make clear that a combined authority is required to allow any member of the public or press to take photographs, film, audio record and report on all public meetings. This openness ensures that combined authorities are genuinely accountable to the local people whom they serve.
The amendment seeks to extend this to give the public the right to attend meetings of officers. It would not be appropriate for the public to have a right of access to meetings of officers of the authority and would be wholly impractical. My noble friend Lord Heseltine and the noble Lord, Lord Berkeley, made the point that, far from opening up options and discussions, it would seek to restrict them and close them down. It is right that officials give advice in public. I can think of one occasion—the annual budget setting—where the finance officer has to stand up and say whether or not the budget is sustainable. It is absolutely right that that is done in a public forum. However, to invade officers’ meetings would be wrong. It would not happen in a council, and given that these provisions mirror the provisions for local authorities, why should it happen in a combined authority? Officers cannot discharge functions of a combined authority, in the same way as officers collectively cannot discharge the functions of a local authority. In a combined authority, as in a local authority, functions are discharged by the members, committees or sub-committees of members, or can be delegated to particular officers. It would be wholly impractical for the public to attend officers’ meetings. Officers meet continually through the day to discuss issues, prepare advice for members and implement the decisions that members have taken.
I rather like my noble friend Lord Brooke’s suggestion of 12 noon decision-making. I think we would get rather a shock if that came into your Lordships’ House. On that note, I ask noble Lords to withdraw the amendment.
Lord Scriven
Before the Minister sits down, can I just ask one question? Is it not the case that any advice that is given, which is written down or in an email, can be requested under freedom of information legislation? What is the difference between that and debate being curtailed by allowing the public to hear the advice being given? They can request it anyway through a freedom of information request.
Baroness Williams of Trafford
My Lords, there is an informal process for discussions and there is a formal process. If something was written down in an email, it would, barring some restrictions on access to information, be disclosable under a freedom of information request.
Lord Shipley
My Lords, I am grateful to the noble Lords who have taken part in this debate, and in particular to my noble friend Lord Scriven for pointing out the importance of the Freedom of Information Act and its provisions in this respect.
I share some of the concerns of the noble Lords, Lord Berkeley of Knighton and Lord Heseltine. I understand exactly the points that are being made. However, the Secretary of State would, as part of this amendment should it succeed, be able to state in regulations how this would be managed.
This is an extremely important issue. This amendment is not asking for commercially sensitive matters to be revealed when it would not be in the public interest to do so or for informal day-to-day meetings with officers to be included. We are saying that the Secretary of State should recognise that the accountability of an elected mayor does matter. The Secretary of State should therefore regulate to ensure proper access to meetings and information to avoid a slide into greater secrecy in decision-making.
The noble Lord, Lord McKenzie of Luton, said that the same rules should apply as for local government—if I recall correctly what he said. I understand that perspective, but we are talking about a single elected person. There is no precedent for the scale of the roles to which they are about to be elected, for the reason that existing mayors in some of our cities and towns have more limited powers. Here, there is to be significant devolution of power from central government across Whitehall and Westminster. There is not even the scrutiny system that is provided within London through the GLA—and we heard from the noble Baroness, Lady Jones of Moulsecoomb, earlier about how the London system does not work terribly well. So I am still very concerned by this situation.
The public right of access to meetings and information must not be diminished as a consequence of this Bill. That is the risk that the Bill introduces. As a consequence of that, I beg leave to test the opinion of the House.
Lord McKenzie of Luton
“( ) An order under sub-paragraph (2) must include provision for an appointment process for any other person who may exercise any PCC functions of the mayor.”
Lord McKenzie of Luton
My Lords, the amendment requires that on page 19, line 10, we should insert:
“An order under sub-paragraph (2) must include provision for an appointment process for any other person who may exercise any PCC functions of the mayor”.
This is a straightforward issue. The amendment deals with the important role of the PCC taken on by the mayor and the extent to which its functions can be passed to others. It seeks to ensure that there is a proper appointments process to put that into effect. I beg to move.
Baroness Williams of Trafford
My Lords, I thank the noble Lord, Lord McKenzie, for being so brief in moving the amendment. As he said, it seeks to insert a new provision into new Schedule 5C to ensure that the Government must provide, by order, an appointment process for any other person who may exercise any of the PCC functions of the mayor.
The amendment is not necessary because the Government have already committed on the Floor of this House to apply Schedule 1 of the Police Reform and Social Responsibility Act 2011 to metro mayor areas by order where PCC functions are being transferred. Paragraphs 9 to 12 of that schedule set out an appointments process for senior posts below a PCC, including for the post of deputy PCC. This involves the scrutiny of any proposed appointment by a police and crime panel. I reiterate that we intend to apply these provisions to metro mayors by order to ensure that such appointments are properly scrutinised in the same way. The role of the dedicated police and crime panel will, of course, continue.
However, it will almost certainly be necessary to amend these provisions to some extent before they can be applied directly to a particular metro mayor area, given the different structures and posts which might exist in different areas, hence our proposal to implement this by order. I wish to be clear that we intend that there will be an appointments process for senior posts that will be based on that set out in Schedule 1 to the Police Reform and Social Responsibility Act 2011. All posts other than that of the deputy PCC mayor, and which support discharging the mayor’s PCC functions, will be subject to the standard local government requirement that appointments must be made on merit, as set out in Section 7 of the Local Government and Housing Act 1989. This requirement currently applies to all appointments made by PCCs other than the post of deputy PCC, which may be a political appointment, albeit still subject to scrutiny by the panel. Appointments to all other posts below mayor on policing matters would have to be made on merit alone, and appointments to senior posts will additionally be subject to scrutiny by a police scrutiny panel.
I hope that reassures the noble Lord and that he feels content to withdraw the amendment.
Lord McKenzie of Luton
My Lords, I am most grateful to the noble Baroness for that much longer explanation than mine in moving the amendment. It is perfectly satisfactory and I beg leave to withdraw the amendment.
Baroness Williams of Trafford
My Lords, in moving Amendment 16, I will speak to the others in this group. Amendments 21 to 24 seek to insert new provisions into new Section 107F to clarify how the council tax requirement is calculated and precept issued in respect of mayoral combined authorities.
Amendment 21 requires that issuing the precept will always be a function of the mayor acting on behalf of the combined authority. Amendments 22 and 23 ensure that the Secretary of State can by order modify the application of Chapter 4 or 4ZA of Part 1 of the Local Government Finance Act 1992, where that chapter is being applied to a mayoral combined authority, in order to provide for the specified outcomes in respect of calculation of the council tax requirement and issuing of the precept.
Amendment 24 extends the Secretary of State’s powers to make provision in an order in respect of how the council tax requirement will be calculated where the functions of a mayor include PCC functions. In these cases, we will require there to be separate components of the council tax requirement in respect of the mayor’s PCC functions and the mayor’s general functions. Amendment 24 also requires that the calculation of the component of the council tax requirement that relates to PCC functions is to be regarded as a PCC function exercisable only by the mayor.
By requiring that there is a separate component of the precept for PCC functions, we will ensure that the council tax referendum criteria can be applied separately to the council tax element of police funding, thereby ensuring that government has full flexibility to apply distinct council tax referendum principles for the police component of a mayoral combined authority precept in the same way as it currently does for all other PCCs across England and Wales. This would allow a mayoral combined authority the flexibility to hold a council tax referendum on the level of funding for the police specifically. These amendments will ensure broad consistency with the PCC model, in that the mayor will calculate the element of the council tax requirement that relates to PCC functions as a PCC does now, and this calculation will be subject to challenge by the police scrutiny panel. Amendments 16, 17 and 18 are consequential amendments to new Schedule 5C to reflect these changes.
Amendment 16 would ensure that only the mayor can calculate the component of the council tax requirement which relates to policing and that this function cannot therefore be delegated to a deputy PCC mayor or any other individual. This is consistent with the PCC model whereby the PCC cannot delegate such responsibilities to a deputy. Amendments 17 and 18 clarify that the Secretary of State’s power to provide directions to a mayor acting on behalf of a mayoral combined authority in respect of police budgets applies only to the calculation of the component of the precept relating to PCC functions and not to the component relating to general functions. With this explanation, I beg to move.
Lord McKenzie of Luton
My Lords, as we have heard, Amendments 21 to 24 require that there should be two components of a single precept in circumstances where the mayor for a combined authority takes on the role of the PCC: the policing and the general work component. We have heard that this separation is necessary should different referendum principles be applied to PCC precepts generally, and this is enabled, of course, because the Bill also requires separate accounting for PCC functions. Amendments 16 to 18 have been described as consequential, and we see them as being entirely reasonable.
Baroness Williams of Trafford
My Lords, Amendments 19, 20 and 25 make minor and technical amendments to Clause 4 and Schedule 2. They remove a reference in the Bill that is relevant to Section 107E of the Local Democracy, Economic Development and Construction Act 2009. The reference would have provided that an order made by the Secretary of State may amend, apply, disapply, repeal or revoke any police and crime commissioner enactment. Amendment 25 removes the definition from new Section 107F inserted into the Local Democracy, Economic Development and Construction Act 2009. The definition of “modify” to include amendment or repeal in relation to Part 1 of the Local Government Finance Act 1992 where the precepting authority is a mayoral combined authority is no longer necessary. These references have been removed as the express power to amend or repeal, and the amendment to the definition of “modify”, are no longer needed given that Amendment 82 amends Section 117 to include a general power to amend or repeal. I beg to move.
“(1A) The function of issuing precepts under Chapter 4 of Part 1 of the Local Government Finance Act 1992 in respect of mayoral functions is to be a function exercisable only by the mayor acting on behalf of the combined authority.”
“(2A) Where the mayoral functions of a mayor include PCC functions—
(a) the provision made by virtue of subsection (2) must include provision to ensure that the council tax requirement calculated under section 42A of the Local Government Finance Act 1992 consists of separate components in respect of the mayor’s PCC functions and the mayor’s general functions, and(b) the function of calculating the component in respect of the mayor’s PCC functions is itself to be treated as a PCC function for the purposes of this Part.”
Baroness Williams of Trafford
My Lords, in moving Amendment 26, I shall speak to all the other amendments in the group. They are about streamlining, fast-tracking and giving greater flexibility in the setting up of combined authorities or the making of changes to an existing combined authority. Certain of the amendments also give greater flexibility in establishing or changing economic prosperity boards, which can also be established under the Local Democracy, Economic Development and Construction Act 2009. Specifically, Amendments 26, 27, 62 and 77 modify the processes for establishing a combined authority in order to provide, if circumstances warrant it, a fast-track process that, while quicker, will maintain all the necessary essential safeguards.
The current process for creating a combined authority under the 2009 Act is lengthy. Past experience shows that it can take well over a year even to reach the point of the order being made, and that is before the real implementation begins. The process involves duplication, particularly where the setting up of a combined authority is agreed as part of the conversations and discussions surrounding a devolution deal. These amendments provide a streamlined process for creating combined authorities where the risks of duplication are minimised—a streamlined process that in particular can be used where local areas have agreed to have combined authorities as part of the devolution deals which they have agreed with the Government. This streamlined process will allow them to implement the deal as quickly as possible without getting tied up in further administrative processes that do no more than duplicate the conversations and discussions that have led to the deal.
For example, a number of councils agree as part of a deal to the establishment of a combined authority. They have provided the Secretary of State with sufficient information and evidence for the Secretary of State to undertake the statutory tests: that is, to conclude that creating the combined authority is likely to improve the exercise of statutory functions in the combined authority’s area, to have regard to the need to reflect the identities and interests of local communities, and to secure effective and convenient local government. Finally, all the councils in the area of the proposed combined authority consent to the combined authority. In such circumstances, the fast-track process will enable the Secretary of State to proceed to seek Parliament’s approval of the necessary draft order once he has fulfilled a statutory duty to consult such persons as he considers appropriate. His decision as to who is appropriate will of course have to be taken in accordance with the well-established principles of administrative law—to act reasonably having regard to all relevant considerations.
With this streamlined process, councils no longer have to undertake the lengthy process of developing a governance review and preparing a scheme. This is not because the substance of these steps is unimportant but because that substance will have been undertaken in a different way, and the guarantee that this is so is provided by the statutory requirements of the Secretary of State to apply in accordance with administrative law the statutory tests and the statutory consultation.
These amendments also provide that where the fast-track process is not being followed and councils are developing a governance review and scheme, the process can still be more streamlined than is currently the case. The current requirement that the Secretary of State undertakes a consultation, including the clear duplication of being required to consult the very authorities that have prepared the scheme, is replaced by simple requirements that the Secretary of State must have regard to the scheme and the councils must consent to the combined authority. The Secretary of State still has the option of consulting if he considers it necessary. These amendments therefore facilitate the timely implementation of devolution deals, which will be of critical importance to areas being able to respond to the economic challenges and opportunities the country faces today. It is not an option that we have bureaucratic and time-consuming processes slowing the actions needed to grow our economy, improve productivity and increase our competitiveness.
Amendments 63, 64, 65, 76 and 78 provide certain greater flexibility and streamlining aspects of combined authorities and greater flexibility for economic prosperity boards, for which the 2009 Act also provides. Amendment 79 makes a small change to references in Sections 111 and 112 of the 2009 Act. The origin of these amendments is the draft legislative reform order that was laid in Parliament in March this year. In its report of 19 June, the Delegated Powers and Regulatory Reform Committee noted that the Bill and the LRO were operating in the same policy space, and commented that making changes through two separate legislative vehicles progressing at different speeds would present challenges. We have responded to the committee’s comments and by these amendments are now incorporating into this Bill provisions that give effect to those in the draft LRO, and are withdrawing the LRO.
The amendments do three things. First, they enable local authorities that do not have contiguous boundaries to form combined authorities and economic prosperity boards if the statutory tests are met. They also allow the creation, if the statutory tests are met, of combined authorities and economic prosperity boards that have a “doughnut-shaped” area. Secondly, they enable a county council in a two-tier area to be within a combined authority for only part of its area where that area coincides with one or more districts. Thirdly, they provide that minor changes to the funding, constitution or functions of an economic prosperity board can be prompted by the councils asking for such a change.
All these amendments streamline and facilitate putting in place the governance needed to support the devolution of powers to areas, helping areas grow their local economies and improving the efficiency of local public services. I commend them to the House and beg to move Amendment 26.
Lord Tyler (LD)
My Lords, I shall speak to Amendments 62 and 77 in this group. First, I very much appreciate the Minister’s explanation of the reason for this group and I particularly welcome the fact that the Government have moved so quickly to amalgamate the previous draft LRO with the Bill. In my view, that is extremely important.
I think the Minister knows that I serve on the Delegated Powers and Regulatory Reform Committee. As an individual, I very much welcome that she has been able to respond so quickly. However, I think she will also know that this afternoon the committee met especially to look at the latest set of amendments. Amendments 62 and 77, to which I want to draw attention, were in one set of amendments that we looked at today.
I am obviously in some difficulty; I cannot refer to the precise recommendations of the committee because they will be reported to your Lordships’ House tomorrow, which is really my point. It would be quite wrong for us to move on those amendments without having seen the recommendations of your Lordships’ committee. However, I can refer briefly to the importance of these amendments. Amendment 62 would introduce a new clause which would make substantial amendments to the Local Democracy, Economic Development and Construction Act 2009. It would do so in a way that quite deliberately dilutes the provisions for consultation.
I think all Members of your Lordships’ House who have been following this Bill are well aware that wide consultation, which was a requirement of that previous Act, is central to the acceptance of this Bill in its current form. The dilution of those very important provisions in the 2009 Act seems to me to raise important issues. The Minister has been talking at some length about streamlining and fast-track. I am always a little apprehensive about fast-track streamlining because it usually means a sleight of hand. I fear that in this case that is precisely what is in place. If we are not to have the effective consultation provided for by the previous Act, at the very least we need a full explanation. We have not yet had that and I do not think we can expect to have it until the Minister has had an opportunity of seeing the report from the committee, which will be published tomorrow.
I understand only too well that in the speed with which the department has had to composite—I think that that is the appropriate word—the LRO from the provisions in the Bill, it may well simply have been a mistake that this consultation process has been, in the words of the Minister, streamlined. That raises very important issues that Members who have been following the consideration of this Bill throughout will wish to look at again in the light of the report from the Delegated Powers and Regulatory Reform Committee. Since that will not be available until tomorrow, I hope the Minister will at least agree that there should be, as there can be under the rules of the House, a further debate on these clauses on Wednesday. I certainly would reserve the right to speak. as an individual of course but with the information that will then be available from the committee, when these come before us again on Wednesday. I hope that the Minister will recognise that that is a perfectly appropriate way for the House to proceed.
Lord McKenzie of Luton
My Lords, it is a great pity that these proposed changes have come forward very late in the day. Certainly, for some of those not caught up in regulatory reform, we will have to unpick some of the intricacies of the Local Democracy, Economic Development and Construction Act 2009. Even with the aid of a Keeling schedule, that takes some time. I perhaps go further than the noble Lord, Lord Tyler, and say that, rather than preserve some right to have a further debate on Wednesday, we should be entitled to come back to this at Third Reading if necessary. A lot of new stuff has been introduced. I would certainly like to take the opportunity of reading what the noble Baroness has said on the record so that we can get our minds round all that. It is not absolutely clear in every respect.
As I understand it, in terms of the key provision, Amendment 62 will provide a fast track to the establishment of a combined authority. Amendments 63 and 64 concern the removal of geographical restrictions on EPBs and combined authorities, and Amendment 65 covers changes to existing economic prosperity boards. We see the benefits of being able to move more swiftly perhaps than circumstances hitherto have permitted, but we need to stand alongside that a caution about not abandoning parts of that process which have made a valuable contribution to the judgments that have been made today.
Amendment 62 would provide an override of the existing requirements of Section 109 to undertake a review and prepare and publish a scheme for combined authorities, which I think the noble Baroness confirmed. That would seem to reverse the current process so that the initiative is with the Secretary of State, who still has to make a judgment about whether a change would improve the exercise of statutory functions in the area. We have had introduced—I think for the first time in our consideration of this Bill—administrative law and what that requires in terms of consultation and other matters. I am bound to say that we need a little time to fully understand what all that entails. Even under the amendment,
“the Secretary of State must have regard to”—
perhaps the Minister can expand on that obligation—a Section 109 scheme if one has been published. If not, what is to underpin the Secretary of State’s judgments? The Minister went through a range of issues in making her presentation. We would certainly like the opportunity to study what is on the record in that respect.
There is the prospect of the Secretary of State consulting persons he considers appropriate, “if any”, and the constituent councils having to agree. But it is unclear what analysis or review the Secretary of State will look to in making that judgment. What is to stop the fast-track approach becoming the norm? Perhaps that is what is intended. Will the Minister confirm whether that is the intention in this regard and that the previous or existing process will now be replaced in total by this fast-track process? Clearly, some further information will come when we get the report of the DPC. We cannot reasonably conclude our deliberations without sight of that report and advice.
Amendment 63 deals with EPBs and Amendment 64 with combined authorities. They appear to address the same issue of geographical restrictions on what can be included in an area. For example, for combined authorities it relaxes the current requirements that the local government areas of a combined authority must be contiguous and that no area not in the combined authority can be surrounded by local authorities that are. As I think has been confirmed by the Minister, this would appear as a “doughnut” formation, or as a combined authority formed from areas that are geographically quite far apart. However, in applying the new rules, the Secretary of State must have regard to the likely effect of the new arrangements on the exercise of equivalent functions in any adjoining local government area. We have no detail on how this test is likely to be applied; perhaps the Minister will say more on that.
Generally, some flexibility on the geographical construction of the combined authority should be welcome, provided there is protection for those authorities that might be surrounded, for example. Given that we are on Report, I was about to say that this would perhaps have to be sorted out in another place, but on reflection I do not think that that is right. The noble Lord, Lord Tyler, is right that we should have a further opportunity to pick up these important issues on Report or at Third Reading. They may be fairly brief amendments, but they touch on the processes that have operated hitherto. To clarify: we are not trying to make life difficult in this respect, but we need to understand the detail of what is proposed and the safeguards that will be there to balance the speedier process that these amendments seek.
Lord Woolmer of Leeds
These proposals are enormously important. I hope very much that we will have time to consider them and to reflect, but I see them as potentially extremely helpful, certainly to Yorkshire.
I will ask for clarification on two matters, but I will study the detail more carefully over the next couple of days. First, I assume that these proposals will apply to extending a current combined authority area, as opposed to establishing a de novo combined authority. I assume that they would apply if an existing combined authority area wished to have discussions to extend its boundaries. Secondly, if I understood the Minister correctly—I apologise that I have not read the proposals in the detail I should have—they would enable an existing combined authority to extend its boundaries, either with contiguous shire districts or potentially even to an authority that does not adjoin the existing combined authority; the word “doughnut” was used. It would be helpful for me to understand whether that is the case.
These are enormously important proposals and a lot of people will be extremely interested to understand them. They could be very helpful in making combined authority areas make a lot of sense in economic terms. Some existing combined authorities, while very useful, could do with extension to a degree.
Baroness Williams of Trafford
It might be helpful to noble Lords if I say that Amendments 62 and 77 are expected to be reached on Wednesday. They are after Clause 9. Therefore, there will be an opportunity to discuss them then if noble Lords wish.
The noble Lord, Lord McKenzie, asked about fast-tracking becoming the norm. The amendments have been proposed to enable deals where constituent councils are content to approve deals that are ready, not to rush other areas that might take a bit longer. He also asked what underpins the Secretary of State’s judgment if there is no scheme. It will be the information and the evidence available in the deal. If insufficient information is available for the Secretary of State to make a judgment on whether the tests are met, then the fast-track process cannot be used.
The noble Lord, Lord Woolmer, asked two very useful questions. One was on changing an existing combined authority. The answer is yes, existing combined authorities would be able to be non-contiguous or doughnut-shaped; I am glad he will find that response helpful. He talked about non-adjoining areas. The answer is also yes, that will be possible. I hope that that assists noble Lords.
Lord McKenzie of Luton
Before the noble Baroness sits down, could she clarify this? I think she said that we would reach Amendments 62 and 77 on Wednesday. According to the groupings list, they are in the group that we have just discussed.
Baroness Williams of Trafford
My Lords, the amendments would be after Clause 9, so they can be discussed then if noble Lords wish.
Lord McKenzie of Luton
We would be very happy to have a further discussion—it is vital that we do—although we would be squeezed for time on Wednesday with lots of other big issues. I thought from what the noble Baroness said that these amendments are not included in the group that we just discussed. According to the groupings list, they should be.
The Deputy Speaker (Lord Faulkner of Worcester) (Lab)
It might help the noble Lord if I point out that even though the amendments are in this group, if they are to be taken on another day it is open to any Lord to raise them when they are called.
Universal Credit (Waiting Days) (Amendment) Regulations 2015
(9 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
20:51 - Division on Lord German’s Motion - Ayes: 69 / Noes: 132 - Lord German’s Motion disagreed.
Lord German
That this House calls on Her Majesty’s Government, in the light of the Social Security Advisory Committee’s Report of June 2015, to remove the housing element of the Universal Credit (Waiting Days) (Amendment) Regulations 2015, in order to mitigate the harshest impacts of the policy (SI 2015/1362).
Relevant document: 3rd Report from the Secondary Legislation Scrutiny Committee
Lord German (LD)
My Lords, I move this Motion because these regulations introduce additional waiting days before the first payment of universal credit. The period of waiting for this first payment is added to the already-existing waiting period of one month, plus the application and approval period before the award is made. In total, it is estimated that most applicants will wait about six weeks after an application before receiving their first payment.
The Government’s own Social Security Advisory Committee produced a very powerful and thorough report on these regulations. It had full consultation and went into great detail. It recommended, first, that these regulations should not proceed; and, if they did, that housing benefit should be removed from the waiting period. In their Explanatory Memorandum the Government agree that these waiting days are a cost-saving measure. This Motion asks the Government to agree the minimum change that the Social Security Advisory Committee asked for, to deal with the harshest parts of the policy. We on these Benches believe that a primary purpose of our social security system is to provide a safety net, to provide protection for those most in need who need help when sickness or unemployment hit them.
Baroness Sherlock (Lab)
My Lords, I thank the noble Lord, Lord German, for moving his Motion and for explaining to the House the effects of this measure. I will not detain the House by repeating that explanation. I also understand his desire to mitigate some of the effects of these provisions by seeking to exclude the housing element of universal credit from the regulations, but I think that there is a better way to approach this so I have taken a different direction in my Motion and I will explain why I think the House should agree. I am also being ever-optimistic, hoping that the noble Lord, Lord Freud, will find this a more persuasive case and that by the end he will rise up and cheer in agreement and obviate the need for a vote at all. I shall do my best.
The starting point for Labour is that we support universal credit. We think it is a good idea. Bringing together separate working-age benefits can potentially make the system simpler and should make it easier to work out whether and by how much you would be better off in work. But because we support it, we want it to work, and we understand that to work it needs to get off to the best possible start. Sadly, that has not happened.
When the Welfare Reform Act was going through Parliament, noble Lords from across the House, from all Benches, pointed out to the Government at different stages some of the risks inherent in the approach they were taking and made various suggestions for how the Bill could be improved. Sadly—as we all think—had these been listened to, we might not be in the position we are in now; none the less, things are not looking brilliant. Unfortunately, once the legislation was in, things did not improve. Delivery has been disastrous from the outset, starting with an implementation plan which the Opposition pointed out to Ministers right at the beginning was hopelessly overoptimistic.
The July 2010 Green Paper on universal credit even included the claim that the IT changes necessary to deliver it,
“would not constitute a major IT project”.
In retrospect, the naivety of Ministers in signing off the plan is extraordinary. Since 2011, £130 million of taxpayers’ money has been written off because of failed universal credit IT. The Government still have not published any of the details of how they are going to spend this £12.8 billion budget, having repeatedly claimed that universal credit was on time and on budget when patently it was neither.
What of the impact on claimants? In November 2011, Ministers announced that 1 million people would be claiming universal credit by April 2014 and the project would be fully rolled out to 7 million people within six years, by 2017. But now there are only 65,380 people claiming universal credit and full rollout is still some way off. It is in this context that these regulations have been laid.
The noble Lord, Lord German, cited the damning report from the Government’s Social Security Advisory Committee, as well as the concerns expressed by our own Secondary Legislation Scrutiny Committee. As he explained, the provisions will extend the waiting time to seven days. They are already in place for jobseeker’s allowance and employment and support allowance but those are normally paid fortnightly and, as the noble Lord, Lord German, explained, the universal credit system is paid monthly and people could find themselves waiting six weeks for money, and at that point getting an amount of money equivalent to only a month minus seven days’ allowance.
When the Social Security Advisory Committee looked at the regulations and recommended, unusually, that they should not be made, the Government’s only response was that they did not accept the SSAC’s recommendation because the risks were outweighed by the benefits that could accrue from reinvesting the savings in measures to help claimants get into work. When the scrutiny committee pressed them on this and said in that case could they explain how they were going to spend this money, all the Government would say was that during 2015-16 they would commit only to spend the money in this way but they would not give any plans for subsequent years or any detail about how the money might be spent. Since that appeared to be the Government’s only defence to the SSAC’s report, it is, frankly, unreasonable for them not to have offered more information when asked to do so by the scrutiny committee.
Can the Minister give the House the kind of detailed breakdown of costs and savings that he was specifically asked for by the scrutiny committee—repeatedly—and which he simply failed to give? The change is described as a “save to spend” measure, which will save £150 million a year once universal credit has been rolled out. The savings will fund measures to get people off benefit and into work. Those savings are predicated on the full rollout to 7 million people. We have 65,000 people so £150 million does not seem a reasonable assumption for the savings at the moment. Will the Minister please tell us? If the figure is proportionate, the back of my envelope suggests that it would cost £1.4 million. I presume it is not proportionate but I invite the Minister therefore to give us an up-to-date estimate of savings in this and the next financial year. The scrutiny committee asked for this but he simply failed to do it.
The only other bit of financial information I could glean was in the Budget costings, which said that the Government would have to spend an extra £5 million if the start of these regulations was delayed by a month. Is that a good way to extrapolate the cost and, if so, will the Minister explain it to us? As the noble Lord, Lord German, pointed out, the Social Security Advisory Committee said that the DWP should give claimants more information about how to get an advance. The Government said they would look at that in the digital process, where nothing is mentioned, so will the Minister tell us what is going on?
Baroness Thomas of Winchester (LD)
My Lords, this debate perhaps illustrates why the way in which the House scrutinises important, not to say controversial, statutory instruments is not satisfactory and is rising to the top of the procedural agenda. I know that there is a move afoot for a delaying power; in fact, we now have the Motion of the noble Baroness, Lady Sherlock. I have also put forward what I believe is a better way of debating controversial SIs, with advisory amendments being suggested. But for the moment these two types of Motion, moved by my noble friend Lord German and the noble Baroness, Lady Sherlock, are the best that we can do without killing the regulations. However, I should make it clear that I see no merit in the Government’s proposals at all. It is tempting simply to recommend that the regulations be annulled. The suggestion in my noble friend Lord German’s Motion for removing the housing benefit element from UC waiting days, from the Government’s very own advisory committee, is the very least that the Government should do. However, I will support the Motion of the noble Baroness, Lady Sherlock, as the second-best option after that.
The purpose of the Social Security Advisory Committee is to advise the Government on secondary legislation and to issue occasional reports in this area. Its report on these regulations details what it calls “compelling evidence” as to why they should not proceed, received in response to its consultation. The Government’s reasoning is that the new arrangements refer only to new claims for universal credit made after 3 August this year and do not apply to certain vulnerable groups or those migrating to UC from existing benefits. They therefore believe that those who qualify for UC by a means test are likely to have savings to fall back on because they will be,
“coming from the world of employment”.
In any case, they then say rather vaguely,
“advances of benefit will be available to help those who are in financial need”.
This is a thoroughly misleading sentence which turns out not to be entirely true, as I shall demonstrate.
We are told that the principle behind the waiting days policy in UC is,
“not designed to provide cover for moving between jobs or brief spells of unemployment”,
although this somewhat sniffy comment does not take account of the fact that universal credit, like PIP, is an in-work as well as an out-of-work benefit. I have been very fair to the Minister by spelling out the Government’s rationale for the policy. So why is the policy being questioned by not just the SSAC but our very own Secondary Legislation Scrutiny Committee? I prefer to call that committee by its old name, the Merits Committee, because the clue as to what it does is in the name. I am very pleased that the chairman of the committee, who has been writing letters to the Minister, is here.
The committee has been like a terrier with a bone. First, it points out that, as the noble Baroness, Lady Sherlock, said, no impact assessment giving costs and savings has been provided, so there is insufficient information to gain a clear understanding of what is going on. I take the noble Baroness’s point that the impact assessment would in any case probably be out of date but that is no excuse for the Government not having done it. The equality assessment is not a substitute for a properly done impact assessment. There is a glaringly obvious example of why an impact assessment is vital. The Government maintain that benefit advances are available for those in financial need, as I said just now. But the SSAC report tells us that the Government admit that advances will not be available to everyone, especially not to those who will not be able to afford the repayment. So what will these people do when they are left with no money for six weeks while almost certainly having debts, being in danger of being thrown out of their accommodation for non-payment of rent and with no food?
No wonder the Government have not done an impact assessment. If they had done one properly, they would have had to admit that there will indeed be extra burdens on landlords, local authorities—particularly if they have to give out loans—housing charities and food banks, and quite possibly the police and health services. But, I hear the Minister saying, “These are people from the world of work, surely not those at the bottom of the pile. They must have some savings, mustn’t they?”. But the evidence provided to the SSAC does not back this up. As my noble friend Lord German said, research by HSBC showed that 34% of the UK population have less than £250 in savings and do not have the means to cover a week’s rent and living costs if the breadwinner’s job were to end. Scottish Widows found that of those with no savings, two-thirds had debts. There are lots of similar comments. We also know what happened when there was a computer glitch at RBS recently: many of its wage-earning customers said that they could not manage to pay their outgoings, even for a very short time.
The SSAC report sums up the argument by saying that the question as to the balance between those with sufficient savings and those without has not been resolved in the supporting paperwork from the DWP. What the Government seem not to have understood is that what they call the “world of employment” might mean a very low-paid job in an expensive place such as London.
Turning to the crucial question of the housing benefit element of UC, the SSAC says:
“The fact that the Committee received so many submissions from landlords and their representatives is an indication of the degree of anxiety that has been generated in the housing market by this proposal”.
The Cornwall Residential Landlords Association is more forthright. It says:
“Many landlords have expressed concern about the payment of Universal Credit at the end of a calendar month leading to late payment of rents and other bills. Adding a further barrier to claimants being able to meet their financial obligations is likely to result in an increase in the number of landlords no longer willing to accept these people as tenants”,
as my noble friend Lord German said. It added:
“The increased risk of homelessness will add to the costs of policing and health services”.
The Notting Hill Housing Trust also makes the point that having rent arrears has the potential to inhibit the free movement of labour, thus hobbling those who are looking for work in as wide an area as possible.
Turning back to the absent impact assessment which should have provided costs and savings, the Minister’s letter to the chairman of our secondary legislation committee gives us more information. It says that the anticipated savings will all be spent in giving additional support for claimants in Jobcentre Plus offices but we have heard before of all the support that claimants are now supposed to be getting from JCP offices. As for the impact assessment not having been done, the reason is given that the legislation does not directly impose obligations on public or private bodies. In other words, it is almost admitted that parts of impact assessments are tick-box exercises, often not worth the paper they are written on. That is something those of us interested in statutory instruments know all about.
However, I am concerned not just with process but with the end result. I fear that the result of the Government proceeding with this arrangement will be real hardship for many of those affected. The Government do not seem to acknowledge that many UC claimants will have been trying to find work before they apply, which makes this proposal particularly harsh. I urge the Government to withdraw the regulations—and if not, to take the housing benefit element out before pressing ahead.
Baroness Lister of Burtersett (Lab)
My Lords, I support my noble friend Lady Sherlock’s Motion. However, I am sorry that the noble Lord, Lord Kirkwood of Kirkhope, was not able to go ahead with his original fatal Motion, not least because when we debated the earlier waiting days regulations on 19 November, I promised that I would see him on the barricades were he to do so. I, too, oppose these regulations. I will inevitably be repeating some of the arguments already put so ably, but I hope to provide reinforcements in doing so.
I accept that the universal credit regulations will affect fewer people than did those for JSA/ESA, because of how universal credit operates. However, as we have heard, those who are affected stand to be hit harder because of monthly payments and because the universal credit payment includes more elements—in particular housing, to which the Motion of the noble Lord, Lord German, which I also support, relates. The payment also includes childcare costs and children’s allowances.
As the Child Poverty Action Group—I declare an interest as its honorary president—points out in its evidence to SSAC, this means that those with high housing costs and/or with children will be particularly adversely affected. In addition, SSAC points out that carers and lone parents of children aged under three, who do not have to serve waiting days on income support, will have to do so on universal credit.
The Lord Bishop of Portsmouth
My Lords, I and others from these Benches have welcomed the principle of universal credit, and I readily do so again. However, the best of policies and principles have practical consequences which make all the difference to the effectiveness of policy. In that constructive spirit, wishing universal credit to be successful in simplifying the complexity faced by benefit claimants and confirming the dignity of work at a decent rate of pay, I add some reservations to the extension of waiting time to seven days.
Delay in receiving first benefit payments has been an issue for many years. Inevitably, and sadly, there can be administrative delays. I am not aware that any assurance has been given that universal credit processes would prevent such delays; indeed, I doubt that any such reassurance could be given. Process, technology and human error are realities. Compounding these with longer statutory waiting times will exacerbate the problem. We should be reticent about further lengthening that wait, at least until delays consequent on the new universal credit process and procedures are ironed out. It would be rash, given our general experience, not to expect some continuing transitional challenges. There are some worrying instances and worrying delays. That is not to attribute blame—rather, it is to remind ourselves of the importance of extensive and ongoing training for those involved in assessing applications and advising on helplines. I hope the Minister might confirm ongoing commitment to this.
Some caution about extending waiting times is therefore appropriate. Furthermore, whereas, as we have heard, jobseeker’s allowance provided for a waiting time of a fortnight, universal credit has a month before first payment is reached. Carers and lone parents have not previously faced a waiting time rule at all. Not all those affected will benefit from redundancy payments or have the cushion of savings. Though some will, a compassionate and just system provides for the worst cases and for those most vulnerable. A job search, which we would wish to encourage, costs money.
The welcome advantage that universal credit encompasses a number of previously independent benefits, which in almost every way is a huge step forward, is in this instance, perversely, a disadvantage. The consolidated nature of universal credit being awaited by a claimant means that the payment being delayed is likely to be a very significant part of income.
As I understand it, the intention of the noble Lord, Lord German, and the noble Baroness, Lady Sherlock, is to moderate the impact of these proposed changes—to moderate risk. On balance, I have some anxiety that the first amendment risks complicating universal credit arrangements by excluding housing benefit from the regulations. It seems to go a bit against the grain of simplifying the benefit system. The second amendment, delaying enactment, gives some time to assess the impact of moving to monthly payments and any protection needed for vulnerable groups, for instance. I hope that the Minister can consider agreeing to a delay to allow for some learning in transition to what I trust will be a significant step forward in supporting those in need through universal credit into work at a decent living wage.
Lord Kirkwood of Kirkhope (LD)
My Lords, I shall make a brief intervention in these two important debates. I congratulate my noble friend and the noble Baroness, Lady Sherlock, on securing the time. I should perhaps say at the outset—and the noble Baroness, Lady Lister, rightly adverted to the fact—that I had a failure of nerve earlier last week and withdrew my prayer to annul. I did so because I think the Treasury is requiring the department to take the introduction of this fundamental flagship policy right to the edge of proper implementation. The Minister told the House last week that the department has already been required to make significant savings. Some £2.4 billion was the anticipated spend, but that has now been reduced to £1.8 billion. The Minister may be able to persuade me otherwise on the rollout of the digital element of the service, and I would like to hear him on that subject but, if not, I am really worried that we are cutting this so thin that we may lose the core benefit of universal credit. I agree with the noble Baroness, Lady Sherlock: everybody in this House, or certainly anyone who served in the Welfare Reform Bill Committee in 2012, is committed to the principle of a single working-age benefit that is blind to work. But if the Treasury is not careful, the house of cards will collapse. So if I had succeeded in a fatal Motion and the Minister had been sent back to the Treasury with his tail between his legs, it may have said, “It’s all too much—we’re just going to let you swing in the wind”.
I know that it is not the Minister’s fault at all, but the idea that this is a save-to-spend initiative is a complete nonsense, as far as I am concerned, and I just do not believe it. It is a departmental expenditure limit that will carry these savings and, as the noble Baroness, Lady Lister, said, the claimants will carry the can, on top of everything else. We are talking about £200 million or £150 million—we do not know—but we really are in danger of putting people at risk.
Another thing that irks me is the fact that we are now beginning to confuse means-tested safety nets with income replacement benefits. Means-tested safety nets should apply in any circumstances; they are the point of last resort. I do not believe that the local government establishment, although it tries hard with reduced budgets, can pick up all of the downstream damage that will be done to low-income households that will struggle to stay alive. Therefore, we have to get behind the department to get the Treasury to recognise a bit more what is at stake here. That is one of the purposes that I hope the debate this evening will serve.
Lord Farmer (Con)
My Lords, while the noble Lord, Lord German, and the noble Baroness, Lady Sherlock, raise important points for consideration, I have to disagree with them both and speak against these Motions. In fact, I would go further and say that in the light of the £12 billion taken out of welfare in last week’s Budget, I am surprised that they are asking the Government to find yet more savings in other places. This is the implication of these Motions.
The waiting days measure, which is consistent with the wider landscape of welfare in this country, is projected to save around £150 million per annum, although there may be some debate on that. Indeed it is a save-to-spend measure, and so removing the housing element and delaying implementation will sharply decrease the amount of funding available for a number of programmes to get people off benefits and into work. I think noble Lords would all agree that we need to make the best possible use of taxpayers’ money and focus spend here. So I am concerned that, in particular, the proposed Motions will curtail the amount of help the Government can continue to give the long-term unemployed, such as quarterly work search interviews for all claimants and voluntary programmes available to lone parents with children aged three to four years old to help them become work ready.
I have been reading the Government’s response to the Social Security Advisory Committee and note that the SSAC’s recommendation to take housing benefit out of the waiting days regime would cut savings by around a half to two-thirds, costing £70 million to £100 million, as well as increasing the complexity of the universal credit payment from the point of view both of IT and the user. The onus is therefore on those tabling these Motions to say where they would cut the £70 million to £100 million to enable these important initiatives that started last year to continue.
Looking first at the concept of waiting days before entitlement to employment-related support, noble Lords will be aware that waiting days have been a long-standing feature of the benefit system and already exist in other working-age benefits, such as jobseeker’s allowance and employment and support allowance. In addition, it must be recognised that many people who make a new claim for universal credit will have come from a previous job and will therefore have final earnings or other income to support themselves until their first benefit payment.
Again, taking this approach to universal credit is consistent with the wider benefit system, which is not designed to cover very short periods of unemployment or sickness. Waiting days are also more consistent with the world of work, where very short breaks between jobs are unpaid as no employer is receiving the benefit of any work. This Government’s determination to ensure as far as possible that welfare mimics the world of work is the right approach.
It is my understanding that the safety net for vulnerable people is not being dismantled and that a number of groups are exempt from this change, including people who are terminally ill, victims of domestic abuse, care leavers, 16 to 17 year-olds without parental support, and prison leavers. Also, those who are in work and receiving universal credit who lose their job will not be subject to waiting days as they are already in the system.
I was pleased to read about a range of other targeted exemptions, which seem to be a better use of scarce public funds than treating all people as equally in need. I am, however, concerned about those who are long-term unemployed and have no savings or incoming final payment, and this is where it is vital that claimants receive timely and effective personal budgeting support as well as, if necessary, cash support in the form of a universal credit advance. Again, I would say that this Government are right to take a more finely grained approach and help those who particularly need support in the very short term, instead of assuming that everyone is in the same position.
I turn to the other elements of universal credit not tied to employment support, especially the housing benefit element that is the concern of the Motion of the noble Lord, Lord German. My understanding is that as universal credit is simplifying the welfare system, not least to make work pay, it would run counter to that goal to treat the housing element separately. I think that this was said earlier, but paying universal credit as a single monthly sum to households aims to help to prepare claimants for the world of work or to keep them in that mindset when they drop out of the labour market.
Quite rightly there is an expectation placed on households to manage their own budgets. Obviously housing costs do not cease when someone finds themselves having to move on to universal credit, but neither do they cease when someone is between jobs. However, I was relieved to find out that protections are in place for tenants who fall into arrears and alternative payment arrangements are available. In other words, it is not a sink-or-swim situation but we are encouraging the norm that very many of those who are in work try to live by, which is saving something for a rainy day.
In summary I support the Government’s position on waiting days, on the grounds that when there is such a tight financial settlement it is imperative that the welfare system is simple but concentrated on those who need it most. However, I echo the Social Security Advisory Committee’s plea, which we have just heard, that this change be subjected to the test-and-learn approach that was a hallmark of welfare reform under the coalition Government. It is essential that we can irrefutably say that the exemptions and other fine print of the waiting days measure are delivered as promised.
The Minister of State, Department for Work and Pensions (Lord Freud) (Con)
Before considering the individual arguments, I think it would be useful to understand to whom exactly waiting days actually apply. It is not the most vulnerable: care leavers, the terminally ill, victims of domestic violence, youngsters without parental support and prison leavers have all been exempted. It is not those coming from other benefits such as jobseeker’s allowance or employment and support allowance. We have to remember that because universal credit is a benefit for low-income people in work as well as a safety net, many people in low-income and unstable employment will remain on universal credit as they move in and out of work. Hence, the very people for whom much of the concern has been expressed today will not be affected.
Noble Lords, and indeed the Social Security Advisory Committee’s consultation, highlighted a series of examples of cases that might be affected. These included the effect on a single mother reducing her hours to care for her sick child; the effect on those who have not been able to build up a cushion for a rainy day because they have been in low-paid work, on zero-hour contracts or in in-work poverty; the reluctance of claimants to take short-term employment as they fear they may have to serve waiting days again when the job finishes; the concern of landlords that their tenants might not be able to pay their rent because they lose a week’s housing and the disproportionate effect that that will have in London; and the fear that low-income people may borrow from payday lenders and loan sharks to keep afloat, a point made by the noble Lord—I find it hard not to call him my noble friend—Lord German.
I understand why these examples cause concern. They would cause me concern, too, if I was not confident that in such cases waiting days would not affect the most vulnerable. The single mother, the low paid, and zero-hours contract workers will most likely already be on universal credit while in work if their income is low. If on universal credit, they will not serve waiting days. Even if a person on a zero-hours or a short-term contract comes off universal credit, they will be exempted if they reclaim within six months. People moving from other legacy benefits are also exempted.
Lord Purvis of Tweed (LD)
I have been listening to the debate very closely and I wonder whether the Minister can clarify something for the House. He will be aware that Clause 25 of the Scotland Bill concerns,
“persons to whom, and time when”,
universal credit will be paid. It will be a concurrent power lying with the Secretary of State and Scottish Ministers. How can the noble Lord make with so firm a view the statements about the operational aspects all being in place, when they are not necessarily in place in Scotland? Agreement will still have to be reached with Scottish Ministers about how this will operate. The figures that the noble Lord is giving and the assumptions he is making cannot necessarily be correct when the passporting of one system to another within Scotland is not resolved. Therefore, would it not be better to delay these regulations until these aspects, which could affect many people in Scotland, are clarified between two potential Ministers?
Lord Freud
Universal credit is a fully reserved matter. There are some areas that we will discuss with the Scottish Government by agreement but they do not include a mainstream policy such as waiting days.
Lord Purvis of Tweed
I know that the noble Lord is aware that the Scotland Bill is going through another place, but is he aware that Clause 25, which is headed “Universal credit: persons to whom, and time when, paid”, says:
“A function of making regulations to which this section applies so far as it is exercisable by the Secretary of State in or as regards Scotland, is exercisable by the Scottish Ministers concurrently with the Secretary of State”?
That is still the Government’s position in the Government’s Bill, is it not?
Lord Freud
I have expressed the exact agreement under the Smith commission and, as I understand it, as it appears in the Bill to which the noble Lord has referred.
I turn to the question about the savings raised by the noble Baronesses, Lady Sherlock and Lady Lister. In steady state the savings are currently estimated at £130 million to £140 million. In the current year— 2015-16—the figure is £30 million. I think that we can congratulate the noble Baroness, Lady Sherlock, on finding the formula relating to the £5 million difference. The figure goes up pretty rapidly to the steady-state figure over the next three years, so it reaches it by 2017-18.
The expenditure with the savings is committed for 2015-16, and I cannot pre-empt the spending review in the autumn. We discussed the things that that would be spent on.
I am trying not to bore the House by telling it things that it might find unnecessary. I can assure the noble Baroness, Lady Lister, that telephone calls are available to arrange meetings. For the most vulnerable, we will explain the availability of universal credit advances either on the phone or face to face if not digitally.
The noble Lord, Lord Kirkwood, and the right reverend Prelate the Bishop of Portsmouth asked: how will we ensure that people are supported in their work search? We have more than 26,000 staff now trained to provide job coaching, so we are rolling that out in scale.
Let me just wind up. I appreciate that noble Lords genuinely support universal credit. That sentiment has been expressed widely, particularly by the noble Lord, Lord Kirkwood, and the noble Baroness, Lady Sherlock. I understand that. It is a slightly odd debate in that way, because noble Lords are trying to reinforce universal credit. I absolutely understand and appreciate that.
It is a savings measure. It releases £130 million to £140 million in steady state. The blunt reality is that, in the present environment, if we did not find money here, we would have to find it somewhere else. The noble Lord, Lord Kirkwood, has an instinct about how these things happen to which I am very sensitive.
Last week, the Chancellor of the Exchequer set out a vision of a higher-wage, lower-tax, lower-welfare society. As a first step towards this, he pledged to raise the personal allowance to £12,500 by the end of this Parliament, with an £11,000 down payment in the next tax year. Coupled with the living wage, which he announced, it gives people the chance to make decisions about their own money. It is still absolutely right, as noble Lords have said, that universal credit continues to operate as a real safety net for the most vulnerable and offers real support to those wanting to work and support themselves.
I commit to keeping a very close eye on this. I have been alerted to it tonight by noble Lords as something to watch. We are committed to a test and learn strategy. We will be rolling this out from August. I will come back to your Lordships as soon as I have a reasonable level of data to let you know whether that is happening and whether I am right in what I am telling you today: that this will not affect the people about whom noble Lords are so rightly concerned; but that I am right that it affects the people who are flowing through the system and we are just not paying them as much during that short period. I hope I am right on that, and I think that I am, but I will look at this very closely and come back to the House on its concerns about the vulnerable and tell noble Lords what is happening and what my level of confidence is on that when we have real evidence.
Lord German
My Lords, first of all, I thank all Members who have spoken in the debate. I particularly thank the noble Lord, Lord Freud, for his contribution. Many people in your Lordships’ House will recognise that one thing he is very passionate about is the success of universal credit. We on these Benches also support universal credit and wish to see it happen.
The issue raised today is about the very short-term responses that government makes to people who have the worst problems and are in the worst condition. The key question that I wanted to see answered in this debate was how people will manage in that period when they are at their weakest and most vulnerable through illness and unemployment. I know that some people are exempt, but not all are, and considerably fewer people will be exempted than the Government expected. It is about those very short-term measures. This is not about the response to people who are unemployed over a longer term. This is about the period when they have either lost their job or become ill and require support in order to do two things: support their family and pay their rent. The fundamental issue behind the Motion is that, in that period, when choices are being made, people will choose to feed their family first and pay the electricity bill to keep the lights switched on. They will then not be able to pay their rent. That is the period for which the very harshest part of the regime has to be dealt with. It is the very simplest and smallest of measures that we are asking to be changed today in order to allow people to be able to manage at that most difficult time.
A number of noble Lords talked about universal credit in the longer term. Of course we are impatient on these Benches for its rollout to occur more quickly, but it has to be right. That is why it is the smallest of measures that we are asking to be changed today.
I say to my colleagues on the Labour Benches that there is nothing incompatible with removing the housing element from the waiting days and then having a review on postponing the measures for the introduction—both go hand in hand. This is the most difficult part of the whole waiting-days regime and housing benefit is the crucial part that people will avoid when they have to feed their families.
To those who have said that there is an alternative in the form of emergency payments—universal credit allowance payments—I must say that, last year, in answer to Parliamentary Questions, we were told that two-thirds of claimants who asked for emergency payments to help bridge that gap, in this very short period, were refused by Jobcentre Plus. Nearly 150,000 out of 221,824 applications were turned down. We know from the Trussell Trust and others that food banks are about short-term financial crisis. It is that short-term financial crisis which we should seek to avoid.
Lord Freud
It is worth clarifying that on universal credit advances, which are an advance for people who feel they need this financial support, I am aware of hardly any turndowns. It is a very different process. It is important not to conflate the two types of financial support.
Lord German
I say with the deepest respect to the Minister, who I know is an honourable man, that only a very small number of people—and they are not with families and children—have received universal credit. We have to take as an example the past year, where the same rules have applied about being able to afford to repay that advance on payment.
I come back to the fundamental point: how will those who are the most vulnerable manage? I am afraid that I have not yet been satisfied that we will do all we can, and I therefore believe it important to test the opinion of the House on this matter.
Universal Credit (Waiting Days) (Amendment) Regulations 2015
(9 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
21:03 - Division on Baroness Sherlock’s Motion - Ayes: 135 / Noes: 124 - Baroness Sherlock’s Motion agreed.
Baroness Sherlock
That this House calls on Her Majesty’s Government, in the light of the Social Security Advisory Committee’s Report of June 2015, to delay the enactment of the Universal Credit (Waiting Days) (Amendment) Regulations 2015 until Universal Credit is fully rolled out (SI 2015/1362).
Relevant document: 3rd Report from the Secondary Legislation Scrutiny Committee
Baroness Sherlock
My Lords, in the absence of suitable reassurances from the Minister, I wish to test the opinion of the House.
Baroness Sherlock
Before we move on to the next business, and in the light of that result, will the Minister make a statement on how the Government propose to handle this issue?
Lord Freud
My Lords, I will not make a statement but I repeat what I said—namely that I will come back to the House at the appropriate time. I think that I set a precedent last week in finding a way to keep noble Lords informed about what is happening. I will keep noble Lords informed about how this policy is going down.
Cities and Local Government Devolution Bill [HL]
“( ) An order under subsection (1) may include further provision about the exercise of the function including—
(a) provision for the function to be exercisable by the public authority or combined authority subject to conditions or limitations specified in the order;(b) provision as to joint working arrangements between the combined authority and public authority in connection with the function (for example, provision for the function to be exercised by a joint committee).”
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, in moving Amendment 28, I wish to speak also to Amendments 29, 30, 71, 72, 80, 82 and 83. It may also assist the House if I comment on opposition Amendments 31, 32, 34 and 67.
These amendments are all about devolving functions. Underpinning the government amendments in this group is consideration we have given to issues raised in Committee about devolving health functions and devolution not only in cities but in counties where there may not be combined authorities, such as Cornwall.
Government Amendments 28, 29, 30, 80 and 82 relate to discussions we have had on devolving health matters and would provide greater flexibility over how functions can be exercised jointly by a public authority and combined authority. They are intended to provide assurance that any future devolution arrangements will continue to uphold existing accountabilities and national standards for the NHS. This was a core principle set out in the memorandum of understanding concerning health and social care functions agreed with Greater Manchester in February.
I have listened carefully to the points made by noble Lords, particularly the noble Lords, Lord Warner and Lord Hunt, both during Committee and Second Reading, and during the very useful meeting we had last week. I am bringing forward these amendments and providing further assurances today, which I hope will go at least some way to meeting the concerns that noble Lords have.
Clause 6 enables the Secretary of State by order to confer on a combined authority functions held by a public authority. Such functions could be exercisable by the combined authority instead of the public authority, or the functions could be exercisable concurrently by each authority.
Amendment 28 enables the Secretary of State to provide for the functions concerned to be exercisable by the combined authority or public authority, subject to specified conditions or limitations. This would enable conditions to be attached to any conferral of powers from a public authority to a combined authority. This could, for example, enable a conferral of health powers on a combined authority to be accompanied by a condition that the combined authority must also meet the current statutory duties held variously by the Secretary of State for Health, NHS England and clinical commissioning groups, thereby ensuring continuation of current NHS accountabilities and standards. So, for example, the Secretary of State could transfer powers attaching the duty to seek continuous improvement in the quality of services, reduce health inequalities, promote the NHS constitution, seek to achieve the objectives in the NHS mandate or act consistently with those objectives. Other conditions might be attached that were specific to the two authorities’ arrangements for working together.
Amendments 29 and 30 provide greater flexibility to ensure that combined authorities and public authorities can work effectively together. They enable Ministers to specify that functions are to be exercised by the public authority and combined authority working jointly, in addition to the powers to require that functions are exercised concurrently or are fully transferred to the combined authority. Amendments 80 and 82 are minor changes which support these amendments by enabling the Secretary of State to amend or modify legislation; for example, the National Health Service Act 2006 might need some amendments or modifications in relation to the particular combined authority to which functions were being transferred. These amendments allow greater flexibility for devolved arrangements to be specified according to local context and the function concerned, and would give greater assurance that the combined authority or council would have to work co-operatively in the exercise of functions.
I understand that Amendment 31 is also prompted by health considerations. It seeks to limit Clause 6 to exclude public authority functions,
“of a regulatory or supervisory nature”,
from being conferred on a combined authority. I understand the intent behind this amendment, having discussed it with noble Lords last week and again now, and I agree that a combined authority should not be able to act as the regulator or supervisor of functions that it is responsible for exercising. Indeed, I can see a case for excluding from the scope of Clause 6 the functions of any national regulatory or supervisory body overseeing the exercise of functions by public authorities. Such an exclusion would put it beyond any doubt that the regulator responsibilities of, say, Monitor and the Care Quality Commission could not be devolved to combined authorities. Moreover, if a combined authority is provided, by order, health functions, perhaps to be exercised jointly with the local clinical commissioning groups, the combined authority should not also be conferred with the functions of the clinical commissioning groups’ regulators.
As I have already indicated, I can assure noble Lords that we are absolutely committed to upholding existing accountabilities and national standards; for example, for the NHS. This core principle was set out in the health and social care memorandum of understanding with Greater Manchester. As I have said in earlier debates, the Government are committed to the view that health and social care services in any area, whatever devolution arrangements are entered into, must remain firmly part of the NHS and social care system; that all existing accountabilities and national standards for health, social care and public health services will still apply; and that the position of NHS services in the area in relation to the NHS constitution and mandate cannot change. The exclusions sought by Amendment 31 could be made by excluding them from the set of functions which are transferred and, if it were necessary, the Secretary of State’s power to attach conditions or impose limitations could be used, as provided for in Amendment 28. However, I am prepared to consider further and reflect on today’s discussion and, if we consider it appropriate, for the Government to return to these issues at Third Reading.
Government Amendments 71, 72 and 83 will enable the Secretary of State to confer functions of a public authority on local authorities as well as combined authorities. These amendments are ensuring that we have the powers we may need to devolve powers in county areas where there may not be a combined authority. In previous stages of the Bill, concerns have been raised that the Bill focuses on devolution to those large cities with combined authorities, and questions have been asked about how the Bill’s provisions apply in non-metropolitan areas, where perhaps there may not be combined authorities.
As I have explained on more than one occasion, we are very clear that devolution applies equally across all parts of England—cities, counties and towns—and that we are looking to do bespoke deals with all areas that want them. We are also ready to have conversations with any area about the powers and budgets it wants devolved to it and the governance arrangements it proposes to support those powers. This amendment is to put it beyond doubt that there is a level playing field for all areas, including areas where there is no combined authority. That we are serious about this is unequivocally demonstrated by the Chancellor’s announcement in the Budget:
“The government intends to support towns and counties to play their part in growing the economy, offering them the opportunity to agree devolution deals, and providing local people with the levers they need to boost growth. The government is working with towns and counties to make these deals happen and is making good progress towards a deal with Cornwall”.
Clause 6 enables the Secretary of State to confer functions of a public authority on to a combined authority, subject to appropriate consent and process. Amendments 71 and 72 replicate these powers for application to local authorities to enable the Secretary of State to confer functions of a public authority on to a county or district council. Amendment 83 makes some minor amendments to tidy up Section 15 of the Localism Act accordingly. These amendments will enable, for example, devolution deals to be made with individual local authorities such as Cornwall, as I have mentioned, in the same way as for a combined authority.
Functions of a public authority could be conferred on a local authority to be exercised individually by the local authority, concurrently with the public authority or jointly with the public authority. All these powers can be transferred with limitations and conditions, as for the transfer of powers from a public authority to a combined authority. As with combined authorities, such a conferral of power can be made only with consent from the local authority and if the Secretary of State considers that doing so would be likely to improve the exercise of statutory functions in the local authority area. Such a conferral of power would also need approval from each House of Parliament and to support Parliament’s consideration, the Secretary of State would lay a report before it setting out the reasoning for the proposed conferral of powers. I hope that noble Lords will agree that these amendments respond to their earlier questions about what the Government are offering to non-metropolitan areas.
Baroness Hollis of Heigham (Lab)
We are getting major amendments, which are very welcome, at Report rather than in the Bill. It is very hard to find out what is going on because being on Report confines the sort of discussion which we would normally have in Committee. I am grateful for the Minister’s tolerance. She made the point about county functions. Is she saying that under Amendment 71, in conjunction with Amendment 83, the functions of a public authority may be conferred on any single district authority, not just on combined authorities and counties? I was not sure.
Baroness Williams of Trafford
I was saying that it applies to any local authority.
Amendment 32 would require the Secretary of State to consult for 60 days before he could lay a draft order before Parliament which would confer powers of a public authority on a combined authority. I am clear that this amendment is unnecessary and risks adding significant delay to the implementation of devolution deals agreed between the Government and the areas concerned. That we cannot countenance delay is not primarily because we are seeking some bureaucratic neatness or even public administration—desirable as those aims are—but because implementing those deals is critical to enabling areas to address the serious economic challenges that the country faces, including the great challenge on productivity.
As the Chancellor made clear in his Budget, addressing this challenge is key to delivering the financial security that families seek when living standards rise. We cannot delay this. Noble Lords have heard me say a number of times that the Government are open to discussing devolution proposals from all places, and that our approach is for areas to come forward with proposals that address their specific issues and opportunities. These are deals between the Government and civic leaders who have been elected by, and are democratically accountable to, those living in the area.
Amendment 33, which is in my name and which we will be discussing shortly, requires the Secretary of State to lay before Parliament a report whenever he lays an order which supports such a transfer of power, to provide further detailed information about the deal and conferral of powers as proposed in the draft order. This report is designed to enhance the transparency of such deals and support parliamentary scrutiny.
Lord Tyler (LD)
My Lords, before I speak to government Amendments 71 and 72, I just want to congratulate the Minister on managing to get Cornwall into so many of her speeches. I have campaigned for some devolution for Cornwall since 1968, and it lifts my heart, even at this time of night, to hear the Government recognising that we have a special case with the integrity of Cornwall. Indeed, it is fair to comment that the boundary between England and Cornwall is a great deal more resilient than the one between England and Scotland or the one between England and Wales. Our identity is therefore that much clearer.
I think the Minister will be aware that the comments I made earlier about the Delegated Powers and Regulatory Reform Committee apply particularly to Amendments 71 and 72 too. These amendments are important. Although I understand her anxiety to short-cut and streamline matters, it should be put on record that their effect on the Bill would be to deal with very similar concerns to those we had in the committee about Clause 6. Members of your Lordships’ House may recall that the committee expressed the view that delegation was “inappropriate” in the light of an absence of any requirement on the Secretary of State to consult affected persons. That was in the committee’s first report to the House, but here we are again: in a similar way, it is being argued that the transfer of public authority functions to a local authority could be so urgent that the Secretary of State could permit a complete absence of any effective consultation of those most affected.
The two new clauses proposed in these amendments are very important. I recognise that the Minister and the Government have tried to move as fast as they can to meet some of the concerns of the committee and of your Lordships’ House, but I hope that she will be prepared to accept that once the committee’s report is published tomorrow—I think it will refer to the proposed new clauses—the House should have an opportunity on Wednesday to look again at the Minister’s proposals in the light of that report.
Lord Hunt of Kings Heath (Lab)
My Lords, I refer to my Amendments 31 and 32, and thank the Minister very much for her response. Amendment 31 relates to the exclusion of the transfer of regulatory functions. I was very grateful for what the noble Baroness had to say, particularly that we will return to the issue at Third Reading. She referred to our debates about the NHS and naturally referred to NHS bodies, but the general principle arises with other functions as well. For example, I have been pondering Cumbria and the potential under this Bill for the regulators of civil nuclear plants and the Nuclear Decommissioning Authority to be transferred, under an order through Clause 6, to Cumbria County Council, which clearly would not be possible. Again, that would apply to the Environment Agency. I think the discussions the Minister is having with her officials between now and Third Reading need to go wider than just the National Health Service.
My Amendment 32 suggests that, because of the Henry VIII nature of Clause 6 orders, the super-affirmative procedure ought to be adopted. I know that in some circumstances, that procedure would not always be appropriate because of the length of time it takes. I am therefore very grateful for the noble Baroness’s Amendment 33, which was originally grouped with these amendments, because it meets the substance of my concerns without making use of the super-affirmative procedure. I am very content with her amendment and look forward to further debate on my Amendment 31, on the exclusion of regulatory and supervisory functions from Clause 6 orders.
Baroness Williams of Trafford
May I just clarify a comment that I made to the noble Baroness, Lady Hollis? I talked about local authorities, but it does actually exclude London boroughs.
Lord Low of Dalston (CB)
My Lords, I should like to speak to Amendment 67, which is not an opposition amendment but an amendment in my name. I apologise to noble Lords for entering the fray at such a late stage, but the fact is that I completely failed to appreciate the significance of this legislation for the provision of advice services in which I have a strong interest. That is entirely my failure, but I crave your Lordships’ indulgence and hope that noble Lords will not mind too much if I take a few moments to draw their attention to the matter on Report.
My interest, which I have declared, stems from the fact that the amendment emanates from one of the key recommendations from the commission that I chaired on the future of advice and legal support on social welfare law—namely, that:
“Local authorities or groups of local authorities should co-produce or commission local advice and legal support plans with local not for profit (NFP) and commercial advice agencies. These plans should review the services available, including helplines and websites, while targeting face-to-face provision so that it reaches the most vulnerable”.
The fact that my amendment emanates from a commission of which I was myself the chair does not necessarily make it a bad amendment—indeed, one might think rather the reverse. In fact, there are a number of considerations which come together to suggest that this amendment makes a lot of sense in a Bill which is dealing with the devolution of power to larger, more strategic authorities. Advice services such as citizens advice bureaux, law centres and other charities provide crucial support to individuals in dealing with financial, legal and welfare problems concerning such things as housing, debt, disability benefits and claiming unpaid wages from employers, and they help communities to adjust to economic shocks and the effects of changes in government policies on things such as welfare reform. As non-statutory, or non-protected, services, they have suffered as a result of funding cuts, most social welfare issues having been removed from the scope of legal aid at the same time as cuts to a range of social support budgets.
The first report of my commission in January 2014 was entitled Tackling the Advice Deficit. Just over a year after that, in March this year, we published a second report which concluded that the advice deficit had increased significantly. In the first year since the implementation of LASPO, nine law centres had closed, comprising six of the Law Centres Network’s membership, and the Law Centres Network estimated that local government support for law centres had reduced by almost a quarter since 2010-11.
Our commission’s principal recommendation was that a strategic approach should be adopted towards the provision of advice. On 10 June this year, the noble Lord, Lord Faulks, for the Ministry of Justice in answer to Questions endorsed this approach when he said:
“The Liberal Democrat manifesto contains a number of wise things, including the suggestion that we should, ‘develop a strategy that will deliver advice and legal support to help people with everyday problems like personal debt and social welfare issues’. I entirely agree with that”.—[Official Report, 10/6/15; col. 792.]
If we take Manchester, which is highly relevant in the present context, as an illustration of these points in microcosm, CAB funding of £1.3 million will be cut by more than one-third between 2015 and 2017, involving major restructuring, including the closure of South Manchester Law Centre and other CAB services, as well as reductions in some face-to-face services. That after £1.2 million had already been stripped out as a result of the LASPO cuts, despite increasing numbers of families and individuals running into debt and legal problems.
As for the strategic response, a combined authority could collaborate with the local advice sector to plan services within a wider range of resources, including the welfare support grant, the universal credit local services framework, the homelessness prevention fund, the troubled families programme, lottery projects to support those with complex and multiple needs, the better care fund and other resources, such as support services for victims provided at local level by police and crime commissioners. This offers a viable model for the rehabilitation and stabilisation of our system of advice and legal support on social welfare law. Such collaboration has been facilitated since 2013 through partnership programmes supported by the lottery’s advice services transition fund. This funding has now run out, although we hope that the Cabinet Office might still work with the Big Lottery Fund to extend this into a rolling programme that could be match-funded from a number of sources and built into a national advice and legal support fund to support the local plans which the recommendation in our report, which I referred to, calls for.
Co-ordination across funding streams and services would not only prevent duplication but help to sustain partnerships across the advice sector. The whole would be greater than the sum of the parts. This is aptly demonstrated by the example of Sheffield, which we studied in our report. The council brought together some 19 separate organisations under CAB leadership, which made for not only economies of scale but gains in efficiency—for example, through three in-house lawyers becoming available to the whole organisation.
Section 4(1) of the Care Act 2014 states that:
“A local authority must establish and maintain a service for providing people in its area with information and advice relating to care and support for adults and support for carers”.
Combined authorities operating the sort of collaborative model that I have outlined offer a perfect vehicle for discharging this obligation. It seems a no-brainer. This is just the sort of thing that combined authorities are being set up to do—if not this, then what?
Lord McKenzie of Luton (Lab)
My Lords, as explained, Amendments 28 to 30 were basically driven by the health agenda. The facility for joint working arrangements, the transfer of functions subject to conditions or limitations, and providing for functions to be undertaken by the public authority on a continuing basis together with joint working seemed to us to be entirely reasonable. On the fundamental debate about the NHS we do not believe that this goes far enough, but that issue will be returned to on Wednesday.
Amendment 34, in my name and that of my noble friend Lord Beecham, is another attempt at clarity on the list of functions that the Government are prepared to consider as available for devolving under the provisions of the Act. We anticipated the answer that we got, and I will not prolong that at this time of night. I just ask: what is so wrong with some form of prospectus that would help local authorities to understand the criteria applied and the capacity that they may build? An annual report would help. I do not fully understand the Government’s reticence on this matter. My noble friend Lord Hunt has dealt with Amendments 31 and 32, and we look forward to the further consideration on Amendment 31.
I say to the noble Lord, Lord Low, that we appreciate the amendment that has just been moved. There is a great need in this area; we know that the social welfare advice system has been all but decimated—advice around benefits, debts, employment and housing—and it is a very difficult time. The noble Lord should be congratulated on the work that he did and the commission that he chaired. He is right on the fundamental point that combined authorities should be a forum within which a strategic framework could be put together to deal with these very issues. I take the Minister’s point that it is not the process of this Bill to prescribe that for each individual authority or the way that they should do it, but I hope that she will accept that it would be enabled by this process—indeed, it is quite an appropriate matter for a combined authority to address.
Amendments 71 and 72, as we have heard, would enable the transfer of public authority functions to certain individual local authorities. To reiterate a question asked by my noble friend, this would apply to any sort of authority—a district, county, unitary or single authority—and potentially the same type of powers that would be available more generally. It is an important change, which is welcomed, although we look forward to the DPRRC’s report when it comes out tomorrow. The change is achieved by the Secretary of State making regulations if it is considered that the exercise of statutory functions will be improved. As we have heard, they have to have the consent of the relevant local authority.
We acknowledge that the affirmative procedure will operate, and the order will be accompanied by a more detailed report, which we will debate in a moment. However, the underlying process is unclear—perhaps we will get some clarity from the report tomorrow. It does not seem to require any starting assessment by the local authority and the proposal then being made to the Secretary of State; that seems to have disappeared from the process. In practice that may end up as an iterative process, but if there is no right for the individual local authorities to make proposals to the Secretary of State for consideration which merits some response, what assurance do we have that this is an inclusive process? It starts from the other end of the process to the existing Section 109, so what creates an effective right for individual authorities with a case to be able to make that case and to be heard? I was anticipating an amendment from my noble friend Lady Hollis in this group but perhaps it will come in a subsequent one.
Baroness Hollis of Heigham
I apologise to my noble friend, but as my amendment was on the very different issue of council tax bands and I thought it was worth trying to explore that in greater detail, fairly late today I asked for it to be disaggregated. Therefore noble Lords will find that on the latest list of amendments Amendment 75A is at the very end, and it will be the last amendment to be debated on Wednesday. The noble Lord may have had an earlier set of groupings in which it was included; I pulled it out after the draft groupings had come out.
Lord McKenzie of Luton
I am grateful to my noble friend for that clarification. I will just say to the Government that where my noble friend leads, Governments eventually catch up.
Lord Shipley (LD)
My Lords, I do not wish to repeat anything that has been said on Amendments 31 and 32, because I am very happy with the debate we have had so far. I will draw the Minister’s attention to the very helpful words of the noble Lord, Lord Low, on Amendment 67, and will then take that and compare it to Amendment 34 and the list of public functions, which the Labour Party has identified as needed, and which I support. It starts to matter. We had a brief discussion in Committee around careers services and their role as regards the devolution of skills budgeting—what the exact responsibility of combined authorities would be as regards careers services. All that matters because it is not clear to all the organisations outside your Lordships’ House exactly what is in scope. Therefore the production of that list called for by Amendment 34 seems very important, because the points made by the noble Lord, Lord Low, were extremely important and appropriate.
Baroness Hollis of Heigham
My Lords, I support my noble friend and the noble Lord, Lord Shipley, and agree with their comments. Although I am delighted by the flexibility and the responsiveness of the Minister, I am now unclear as to why an individual local authority should necessarily join other authorities to form a combined area if it could equally well receive powers. Obviously that would be a matter for negotiation. For example, it would be absurd to confine transport to one area, but for another power associated with economic development you might not necessarily need a combined authority to do so; you just need additional powers to be able to do X, Y or Z.
Therefore, given that at the lowest level we now have single local authorities, then combined authorities and, floating somewhere above them, metro authorities with metro mayors, which will be required, it would be very helpful if the Minister could give us some indication—not necessarily tonight, but as soon as possible—of what the Secretary of State might have in mind to be appropriately delegated to different tiers of authority, particularly for those of us who are in two-tier shire authorities. In that way, a lot of wasted effort will not be put into submissions that will go nowhere. We understand unitary authorities in metropolitan areas very clearly, but where there are district councils and county councils, and the district councils are often rural and urban and have different political views and attitudes towards economic growth, it will be quite complicated to find a way through to maximise our common agenda of economic growth for the prosperity of us all. Therefore anything the Minister can do to help clarify the routes we travel on this will be very welcome.
Lord Heseltine (Con)
My Lords, the more I have listened to the debate on Amendment 34, the more worried I have become about many of the interventions from the Benches opposite. Devolution is not something that government departments are longing to do. They are not sitting there asking, “How can we give up power? How can we transfer this back from where we have taken it?”. There is controversy between departments within government. It is a personal controversy and a power structure controversy. If we were to agree to this line of thinking, we would force the Government to find minimalist compromises within the existing structure. Why should the Government go further within the controversy? Why not simply give the least? That would broadly satisfy the consensus within the power structure of Whitehall.
The argument that I have used in my personal capacity with local authorities is: be adventurous. I have asked: do you have the capacity to see how to do something bigger, better and more imaginative than you will ever get if it is imposed on you from central government? Some authorities have that capacity. Manchester has been quoted many times but there are other examples—the noble Lord, Lord Low, in an interesting intervention talked about what has happened in Sheffield. However, in order to galvanise the momentum of local talent based on local strengths, you need men and women who can envisage how to do things better than will ever be achieved by what is imposed on them by the central machine. That is why Amendment 34 is at the heart of the worst way of dealing with things.
We want local people to rise up in indignation with their ideas, to argue for them and to put forward proposals which in many parts of government will not be acceptable so that a debate is forced on government. Then, those who believe in the devolution argument will, in the normal processes of government, have the chance to win the concessions that can meet the aspirations that are put forward. However, clamping down with prescriptive lists divided into tiers of local government and into functions, mirroring the Whitehall structure, is the way to stop devolution in its tracks.
Baroness Williams of Trafford
My Lords, I thank my noble friend Lord Heseltine for setting the context for some of my answers tonight. We do not intend to make lists to prescribe anything. We want to hear proposals from local authorities—single local authorities or whatever they might be. As my noble friend said, we want to hear about their vision for the future of their areas. I hope that that answers some of the questions that were raised.
The noble Lord, Lord Tyler, referred to Amendments 71 and 72. As with the other amendments which the Delegated Powers Committee considered today, these can be discussed further on Wednesday, when the committee’s report will be available.
I was asked whether single local authorities could make proposals to the Secretary of State. The answer is yes.
The noble Lord, Lord Low, asked about social welfare reports. Whatever the merits of these issues—and I can see their importance—again, these are matters for local areas, and indeed perhaps for combined authorities, to respond to if that is considered right locally. They are not matters for a generally enabling Bill providing the framework for devolving powers as part of a bespoke deal.
The noble Lord, Lord McKenzie, asked why there should not be a prospectus for local authorities to respond to. Again, a prospectus tempts us to shift from our bottom-up approach to devolution to an approach driven by the Government’s ideas about what may or may not be devolved. That goes back to the comments of my noble friend Lord Heseltine. We are totally wedded to the bottom-up approach of having conversations with those in any area for whatever they propose for devolution.
“(c) for the function to be exercisable by the combined authority and the public authority jointly, or “(d) for the function to be exercisable by the combined authority jointly with the public authority but also continue to be exercisable by the public authority alone.”
“( ) At the same time as laying a draft of a statutory instrument containing an order under this section before Parliament, the Secretary of State must lay before Parliament a report explaining the effect of the order and why the Secretary of State considers it appropriate to make the order.
“( ) The report must include—
(a) a description of any consultation taken into account by the Secretary of State,(b) information about any representations considered by the Secretary of State in connection with the order, and (c) any other evidence or contextual information that the Secretary of State considers it appropriate to include.”
Baroness Williams of Trafford
I will speak also to Amendment 70. During Committee, noble Lords expressed concern that Parliament should be fully informed on the nature of devolution deals and proposals. We have considered carefully the points raised, and we agree that we could strengthen and extend the information available to Parliament. Amendments 33 and 70 are intended to do this. They provide that when a Secretary of State lays a draft order in Parliament, in addition to the order’s Explanatory Memorandum, he will also lay a report explaining what the order does and why he proposes to make it. The report would need to include details of any consultation.
In Committee, we considered several amendments from noble Lords about consultation. Among those were requirements for the Secretary of State to undertake consultation before putting orders before Parliament. We consider that where consultation is undertaken, it is most appropriate that this is at local level by the areas developing the proposals, but it may be appropriate for the Secretary of State to consider such consultation as has been undertaken, and it is right that Parliament should know about such consideration, so my amendments require that the reports to be laid in Parliament contain a description of any consultation and any representations considered by the Secretary of State—and any other relevant evidence or information considered appropriate to include.
For example, in respect of consideration of policing within any deal, the Government would fully expect police and crime commissioners to be part of discussions early on in the development of those proposals at local level. Where the transferring of PCC functions to a mayor is proposed, the report would therefore include descriptions of the discussions that have taken place on this matter between local PCCs, the combined authority and the Government.
I believe that these reports, together with the Explanatory Memoranda, will ensure that Parliament will have all that it needs to consider the orders implementing devolution deals and the governance changes put before it. I beg to move.
Lord Woolmer of Leeds (Lab)
My Lords, I am grateful to the Minister for her explanation but want to say a couple of things. First, I assume that these amendments will relate to each and every agreement that will be brought forward in due course in the House. Secondly, I was reassured that the document setting out the various details would be additional to the Explanatory Memorandum, which is notoriously modest in its explanations. It would be extremely helpful to me and to the Secondary Legislation Scrutiny Committee to have the reassurance that those reports will be thorough.
I hope that the Government are able to have all success in their ventures. As the debate has gone on over the weeks, I have become more convinced than I was early on that this could well lead to some genuine devolution initiatives. Noble Lords may think that I was rather cynical at the start, but the drive and intention behind it, not least from the noble Lord, Lord Heseltine, and the Minister, is greatly reassuring.
I hope that these reports will be full and genuinely helpful to the House, because those will be the reports that will persuade both Houses that the devolution proposals are substantial and well founded. Of course only experience will show that as the reality, but nevertheless the parliamentary process is important because that is what will carry opinion with the Government and in the local communities.
Lord McKenzie of Luton
My Lords, Amendment 33 is to be welcomed as it requires a report, as we have heard, to be laid before Parliament at the same time as the statutory instrument containing an order under Clause 6. The report will cover descriptions of any consultations and representations received and evidential and background information. Amendment 70 requires a similar report in respect of regulations arising under Clause 10. We consider these to be important amendments, which we support.
However, the amendment raises one question, which I touched upon earlier in relation to Amendment 1. The devolution process under way is happening not just necessarily under an order in Clause 6 or 10. It has been an evolving process, particularly in the case of Greater Manchester. The build-up of that devolution arrangement happened under different provisions, and that could be replicated in other deals.
We are trying to understand whether this will culminate always in one order under Clause 6 or Clause 10, or whether there are bits along the way. If the latter, that would obviously have an impact on the type of information and the type of report, and on whether there are any gaps in it. How will it work in practice?
As I said earlier, the reports could be an important component of an annual report, but I would be interested in how it all works and how it culminates always in one order which then triggers the report that we are discussing.
Baroness Williams of Trafford
I thank the noble Lord, Lord Woolmer, for the two points that he raised and for his increasing confidence as the Bill goes along—it is reassuring to me if not to anyone else. He asked whether each and every deal would be brought forward in this way. The answer is yes. He also asked whether the reports would be in addition to the Explanatory Memorandum. Not only will they be in addition, but they will be full and detailed.
The noble Lord, Lord McKenzie, asked whether the report plus the Explanatory Memorandum would be part of the full deal explanation, or whether it would be done piecemeal. My view at this moment—and I will correct it if it is wrong—is that once an area is ready to go forward with a devolution deal and therefore the orders that come with it, there will be a substantial report plus Explanatory Memoranda. It may be that that is added to through a future order, but that order on its own would then come through both Houses of Parliament. That is how I see it working, and I will correct it if it is not the case.