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Oral Answers to Questions
(9 years ago)
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John Mann (Bassetlaw) (Lab)
1. What estimate he has made of the number of pensioners accessing up-to-date pension advice from his Department.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
The Department itself does not give advice. Regulated financial advice can be given only by a Financial Conduct Authority-authorised adviser. Pension Wise, set up by the Government, offers free, impartial guidance to people aged over 50 with defined contribution pensions. So far, over 20,000 people have received a guidance appointment since April 2015.
John Mann
Twenty thousand is a drop in the ocean, considering the enormity of the changes. How will the Government ensure that pensioners are getting good, sound advice—and quantify that they are—in order that pensioners are not ripped off by people advising them badly and therefore lose out in future years?
Mr Vara
May I bring the hon. Gentleman into the 21st century? There have been over 1.5 million visits to the Pension Wise website. We are confident we will make sure that the public are aware of what Pension Wise has to say, and that people can access the website or have face-to-face, telephone or online interviews.
Mr Philip Hollobone (Kettering) (Con)
I am getting a growing number of inquiries from women in their early 60s who seem to be unaware of the changes to the retirement age. I am worried that these ladies have not been contacted by the relevant Department and seem to be unaware that their retirement date will be rather later than they had imagined. What can be done to help them?
Mr Vara
My hon. Friend makes a very good point. May I put on the record the facts and circumstances? Between April 2009 and March 2011, the Department proactively mailed all women born between 6 April 1950 and 5 April 1953, informing them of their state pension age under the Pensions Act 1995. Following the 2011 changes, the Department wrote to all individuals directly affected to inform them of the change to their state pension age. Sending mail to those individuals, who are due to reach state pension age between 2016 and 2026, was completed between January 2012 and November 2013.
Nick Thomas-Symonds (Torfaen) (Lab)
Ministers will be aware of the recent Work and Pensions Committee report, which contained stark warnings about pension scams since the advent of pensions freedoms and about the risk of people being conned out of their life savings. I am sure that Ministers are also aware of the recent survey showing that one in seven over-55s—about 1 million people—have been targeted by pension scams since April, when the pensions freedoms were introduced. Will the Minister reassure the House that he takes the Work and Pensions Committee report and the findings of the survey very seriously, and will he outline what the Government intend to do to protect people from fraudsters?
Mr Vara
I assure the hon. Gentleman that we do take this issue very seriously. That is why we set up Pension Wise. Let me make it absolutely clear: the Government are not complacent about scams. We are making sure that the public are aware of how to detect a scam, how to deal with it and how to report it. The two regulators are also working with us. Indeed, the hon. Gentleman will find that the Pension Wise website and those giving guidance do advise people on how to deal with scams.
Mr James Gray (North Wiltshire) (Con)
I was about to ask the same question as the Minister just answered. May I take this opportunity to say to him that a large number of my constituents are being badly affected by scams, particularly over the internet? This is a matter of great concern. I am delighted that the Government have taken such strides to deal with it.
Mr Speaker
As I have often had cause to observe, repetition in the House of Commons Chamber is not a novel phenomenon.
Kevin Foster (Torbay) (Con)
As it is one of the best places in the UK to retire, many people in Torbay welcome the freedoms that are being created, but they do need to be protected from scams, as has been mentioned. What steps is the Minister taking to ensure that pensioners can access the advice they need before making a crucial decision about their future?
Mr Vara
Pension Wise is there to give impartial and free advice. When necessary, it will direct people towards professional advisers. The Money Advice Service has on its books a directory of some 2,300 firms throughout the country. In Scotland, there are 162 firms. The total number of advisers is more than 6,000. We are trying to make sure that the public have proper access whenever advice is required.
Callum McCaig (Aberdeen South) (SNP)
2. If he will make an assessment of the potential effect of benefit sanctions on claimants’ mental health.
Joanna Cherry (Edinburgh South West) (SNP)
7. If he will make an assessment of the potential effect of benefit sanctions on claimants’ mental health.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
15. If he will make an assessment of the potential effect of benefit sanctions on claimants’ mental health.
The Minister for Employment (Priti Patel)
Many factors affect an individual’s mental health. To assess the effect of sanctions in isolation of all other factors would be misleading. A number of checks are built into the system to support all claimants, including those with mental health concerns.
Callum McCaig
That answer is disappointing. Opposition Members are concerned about the terrible damage that the ideological cuts being made by the Government are doing to the most vulnerable in our society. For the last two weeks at Prime Minister’s questions, my right hon. Friend the Member for Moray (Angus Robertson) has asked the Prime Minister about suicides following benefit reductions. Will the Minister publish the details of the investigations forthwith?
Priti Patel
The Department carries out reviews to identify whether any lessons can be learned. I should emphasise that the Information Commissioner has considered this issue and upheld the Department’s decision not to publish the details because of the level of personal information they contain. For that reason, it would be unlawful to release this information.
Joanna Cherry
In 2014, the Scottish Association for Mental Health, Scotland’s leading mental health charity, published research that found that 98% of its service users said that their mental health had deteriorated as a direct result of welfare reform. Further research this year by the same charity at the facility it runs in my constituency at Redhall walled garden confirmed that benefit sanctions had been detrimental to the mental health of service users there. What steps will the Government take to address the adverse effects of benefit sanctions on those with mental health problems?
Priti Patel
Sanctions play an important part in the labour market by encouraging and supporting people to go back to work. Jobcentre Plus staff are trained to support claimants with mental health conditions during their job search and such individuals have access to more expert advice, should it be needed.
Gavin Newlands
Is the Minister aware that her disastrous and failing sanctions regime is not only causing untold misery to the people who are sanctioned, impacting on their wellbeing and mental health, but having a devastating impact on their families? A recent Citizens Advice Scotland report highlighted the fact that children are indirectly punished by sanctions. In the light of those alarming findings, will she reassess the impact of sanctions on the wellbeing of the family? Do they pass the Prime Minister’s family test?
Priti Patel
Our sanctions system is robust and there is clear evidence that it works. The hon. Gentleman mentions support for the family. It is this Government who are supporting the family through our new life chances measure and, importantly, ensuring that work pays, which is how families get out of poverty and how the life chances of children and families improve.
Maggie Throup (Erewash) (Con)
Will the Minister confirm that the number of cases that result in sanctions is falling? Does that not show that jobcentre staff are working with claimants to help them engage with their search for employment, and that most people who are unemployed want to work?
Priti Patel
My hon. Friend is right. Jobseeker’s allowance sanctions have decreased by more than 40% over the last year. Importantly, the principle behind the sanctions system is that it helps individual jobseekers to comply with the reasonable requirements that they develop and agree in discussion with their work coaches to help them prepare for and move into work.
James Morris (Halesowen and Rowley Regis) (Con)
People with mental health problems face particular barriers in getting them back into the labour market and productive work. Does the Minister agree that the Government should take all steps necessary to make sure that people with mental health problems are not sanctioned unnecessarily and that we show flexibility in making sure that they get back into the labour market?
Priti Patel
My hon. Friend raises some fundamental points. Our staff are trained not only to support claimants with mental health conditions during their job search but, importantly, to provide more expert advice and support should they need it. To return to my earlier point, claimants are asked to meet only reasonable requirements, taking into account their circumstances and capabilities and, of course, their mental health conditions.
Richard Graham (Gloucester) (Con)
I welcome the Department’s recent decision to trial a yellow card system for 14 days for those being sanctioned in various places. I also welcome the Department’s decision to place advisers at several food banks, to trial whether that would also help with some of the benefits transition problems. When does my right hon. Friend expect the Department to have enough evidence to share with us the outcomes of the trials?
Priti Patel
My hon. Friend is right: the trials are important and are bringing together more support and advice for individual claimants. I would expect to see more information and details of the trials early in the new year.
Frank Field (Birkenhead) (Lab)
May I also thank the Government for accepting the “Feeding Britain” report’s call for a yellow card system? Before they report to the House on a good warning system for people about the impact of sanctions coming down the road, they will need to begin the trials. Is there any chance of the Minister being able to tell us when the trials will begin and when they will be completed?
Priti Patel
I thank the Chair of the Work and Pensions Committee for his question. We are working out the details and I would be very happy to discuss with him the details of when we will roll out the trials quite shortly.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
The so-called yellow card pilot scheme is an admission by the Government that the sanctions regime is not working and that, in particular, it is badly failing people with serious mental illnesses. Why are the Government waiting until next year to introduce the pilot scheme? In the meantime, will they please just stop sanctioning people who are seriously ill?
Priti Patel
I respectfully disagree with the hon. Lady. Claimants are asked to meet only reasonable requirements, taking into account their circumstances. As the pilots get under way, I think she will find that this is about how we can integrate support for claimants and, importantly, provide them with the support and guidance to help them get back to work.
Dr Whiteford
I listened carefully to the Minister’s response, but the reality is that people with mental health problems are being disproportionately sanctioned, and that has been evident for some time. Why will the Government not listen to voices across the House, including those on the Work and Pensions Committee, and subject the sanctions regime to a full independent review?
Priti Patel
I would make a few points to the hon. Lady. For a start, the Government have been listening and we have responded to the Work and Pensions Committee, which is why we will be trialling and piloting the new scheme. I reiterate my earlier comment: our staff are trained to support claimants with mental health conditions and there is no evidence to suggest that such claimants are being sanctioned more than anybody else. We provide the support through our jobcentres and our claimants are asked to meet only reasonable requirements.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
The Minister may have inadvertently slipped up there. There is clear evidence from last year that 58%—more than half—of people with mental health conditions on the employment and support allowance work-related activity group were sanctioned. That is equivalent to 105,000 people. According to a Mind survey, 83% say that their health condition was made worse as a result. The Government’s own evaluation of their Work programme has shown not only how ineffective it is, with 8% of people with mental health conditions getting into sustained work, but that their punitive sanctions regime just does not work, so why will the Government not commit to undertaking an independent review of sanctions?
Priti Patel
Labour has clearly now changed its policy on sanctions, which of course it used to support. The sanctions system is kept under constant review, and we are trialling an early-warning system, as recommended by the Work and Pensions Committee. I would have thought she welcomed that. Sanctions play an important part in the labour market by supporting people, particularly those with health conditions, into work. [Interruption.] Labour Members have conveniently forgotten that ESA sanctions and ESA were put in place by a Labour Government. The sanctions system is clear, fair and effective in promoting positive behaviours to help claimants back into work.
Henry Smith (Crawley) (Con)
3. What assessment he has made of the effect of auto-enrolment on private sector pension saving.
Pauline Latham (Mid Derbyshire) (Con)
18. What assessment he has made of the effect of auto-enrolment on private sector pension saving.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
Since the gradual introduction of automatic enrolment began in 2012, participation in workplace pension saving in the private sector has increased by 21 percentage points, from 42%, or 5.9 million workers, in 2012, to 63%, or 9.2 million workers, in 2014.
Henry Smith
Will my hon. Friend join me in congratulating B&CE, based in my constituency, on so expertly rolling out its people’s pension, an important provision for workers across the country?
Mr Vara
I am happy to congratulate B&CE on its people’s pension product and the work it does. It is important that the roll-out of automatic enrolment receives as much support as possible so that people can make choices that are right for them. I also commend my hon. Friend for his excellent work, which was evident when I visited his constituency.
Pauline Latham
On 4 December, I will hold my second workplace pensions event in my constituency. Does my hon. Friend agree that small businesses need to advise their employees about the pension changes, and what efforts are his Department making to ensure they do?
Mr Vara
I congratulate my hon. Friend on her efforts in helping to spread the important message about this groundbreaking reform. I agree that small businesses need to advise their employees of the changes, which is why the Government have launched a new national communications campaign for small and micro-employers, as well as for individuals.
Kelvin Hopkins (Luton North) (Lab)
Would it not be much more sensible, financially secure and efficient and beneficial to pensioners to establish a compulsory state earnings-related pensions scheme for all, with defined benefits, in place of the Government’s auto-enrolment scheme?
Mr Vara
It is important that we get people to recognise they need to think about the future. Some 10 million eligible people will qualify for auto-enrolment, of whom 9 million will be saving more or saving for the first time. I am also happy to say that 3 million to 4 million of them are women.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
We on the SNP Benches are happy to support the Government’s policy of auto-enrolment, as we think it important that people save for the longer-term. Last week, however, Australia announced it would be stepping back from its policy of pensions freedom after many over-70s ran out of cash. Will the Government reconsider giving guidance to pensioners advising them to secure an income in retirement?
Matthew Pennycook (Greenwich and Woolwich) (Lab)
4. What assessment he has made of the effect of poverty on increases in the number of people living in temporary accommodation since 2010.
Ms Karen Buck (Westminster North) (Lab)
6. What assessment he has made of the effect of poverty on increases in the number of people living in temporary accommodation since 2010.
Simon Danczuk (Rochdale) (Lab)
14. What estimate he has made of the change in the number of people requiring temporary accommodation since 2010.
The Parliamentary Under-Secretary of State for Disabled People (Justin Tomlinson)
As hon. Members will be aware, the administration of temporary accommodation is a matter for local authorities, but I hope they will agree that the best route out of poverty is to support people into employment, and I am proud that we have achieved an employment rate of 73.6%, the highest since records began in 1971.
Matthew Pennycook
Official figures show that in England the total number of homeless households in temporary accommodation has risen by an alarming 26% over the last five years. In my local area, it has risen by 55% in the last 18 months. The Minister will know that being placed in temporary accommodation is not only traumatic for the families but incredibly costly. Given that his Department’s policies have been a key driver in this increase, what is he doing, in conjunction with his colleagues in the Department for Communities and Local Government, to come up with an urgent solution to the problem?
Justin Tomlinson
Today, the number of households in temporary accommodation is 66,890, and the all-time high in September 2004 was 50% higher than that. The average time that households spend in temporary accommodation is now seven months less than when we came into office in 2010. Working with DCLG, we are introducing measures to build more houses. Over this Parliament, we expect a further 275,000 affordable houses to be built, which is the fastest rate in 20 years.
Ms Buck
Discretionary housing payments were intended to mitigate some of the effects of welfare cuts—housing benefit and the benefit cap—and to prevent homelessness. In my local authority, however, half of expenditure is going to support house- holds that are already homeless and in temporary accommodation. Will the Minister tell us what proportion of expenditure nationally is going on paying for existing temporary accommodation? Does he think that is the point of discretionary housing payments?
Justin Tomlinson
We are making available £800 million for discretionary housing payments over this Parliament, which is an increase of 40%. The key is that it is discretionary for each local authority. In addition, to recognise the additional costs within London, £60 per household is provided per week to the local authority.
Simon Danczuk
Petrus Community, a homeless charity in Rochdale has told me that there has been a significant increase in the number of people requiring temporary accommodation. The figures show that it has nearly doubled over the last five years of this Government. The charity blames these results on the bedroom tax, benefit sanctions, and employment and support allowance claimants being wrongly declared fit for work. What will the Government do about the situation in Rochdale?
Justin Tomlinson
The key is providing more houses. A further 800,000 new homes have been built since 2009, housing starts are at their highest level since 2007, and a further 275,000 affordable houses will be built during this Parliament. Through the new homes bonus, we are offering additional incentives to build further affordable houses.
Mr David Burrowes (Enfield, Southgate) (Con)
Enfield is significantly affected by increases in temporary accommodation and by child poverty. Does the Minister agree that family breakdown is the key factor that needs to be taken into account when assessing and tackling the root causes of child poverty?
Justin Tomlinson
I thank my hon. Friend for making that very powerful point. To recognise the difference it can make, that factor is one of the key measures within the life chances strategy.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
Further to the question about those living in temporary accommodation, does the Minister agree that, in order to get to the root causes of poverty, it is important to tackle not just family breakdown but workless households?
Justin Tomlinson
That is why we rightly celebrate the 2 million new private sector jobs that have been created since we came into office. We will continue to deliver a strong economy that will create jobs, which are the best route out of poverty.
Emily Thornberry (Islington South and Finsbury) (Lab)
The Tory-Liberal Democrat Government tried to cut housing benefit some nine times. Since May, the Government have been trying again. All this has achieved is a massive increase in the number of homeless families in temporary accommodation, the largest housing benefit bill we have ever seen, and huge amounts of discretionary housing payments being given to local authorities. I am sure that it has occurred to the Minister—he is an intelligent man—that the answer is to build more real affordable housing. Would he like to have a quiet word with the Department responsible and ask it to pull the Housing and Planning Bill, because it will simply result in the sell-off of more and more affordable social housing?
Justin Tomlinson
The right-to-buy policy is a deal that we have secured with housing associations to give tenants the right to buy. The homes will be sold on a one-for-one basis, which creates new, modern stock and additional jobs. People who work hard should not be blocked from a chance to own their home, which I very much support.
Stuart Andrew (Pudsey) (Con)
5. What support his Department is providing to young people seeking work.
The Minister for Employment (Priti Patel)
Tackling youth unemployment is a priority for this Government. We are determined that young people should not slip into a life on benefits. That is why our Department provides a broad range of support for young people, in addition to the standard Jobcentre Plus offer.
Stuart Andrew
Having experienced periods of unemployment in my youth, I am acutely aware of how tough it can be on individuals. Does my hon. Friend welcome the fact that youth unemployment in my Pudsey constituency has fallen by 49% in the last month? Is that not proof that the economic plan is delivering the jobs and apprenticeships needed to give job security for our young people?
Priti Patel
My hon. Friend is absolutely right. That fall in unemployment is due to the fact that the economic plan is working and the economy is growing. However, we also recognise that young people need tailored support so that they can secure employment opportunities, and we have therefore introduced adviser time in jobcentres, work experience placements, the Work programme, Help to Work and the innovation fund.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
The tax credit system has undoubtedly played a major role in encouraging people to take up employment by making work pay, and has made a massive contribution to the employment figures that Ministers frequently cite. Are the Government aware that if they proceed with their tax credit cuts, some people will pay a huge effective tax rate—perhaps as high as 93%—and that that will be a massive disincentive for those who actually do go out to work?
Priti Patel
The hon. Gentleman is entirely wrong. By making changes in both the welfare system and the tax system, we are ensuring that work pays. The hon. Gentleman will be fully aware that next April we will introduce a new national living wage, which will boost the incomes of people receiving low pay, and will be supplemented by childcare measures. Those will serve as pure incentives that will support them and help them into work. [Interruption.] The hon. Member for Islington South and Finsbury (Emily Thornberry) says, “Give us the evidence.” Where is the evidence and where are the facts that she and her team are providing? [Interruption.] If the hon. Lady has data to prove her case, she is welcome to share them with me, but the Government know for a fact that more people will be better off as a result of the new national living wage and free childcare, and because it will pay to be in work rather than depending on welfare, which is the policy that the Opposition are offering.
Amanda Milling (Cannock Chase) (Con)
Will my right hon. Friend join me in thanking the National Apprenticeship Service, South Staffordshire College, Staffordshire University and those running advanced people management courses, all of whom will join me this month at an apprenticeship seminar that I am holding to help create new career opportunities for young people seeking work in Cannock Chase?
Priti Patel
My hon. Friend is absolutely right. Apprenticeship fairs and engagement with employers are the right way to encourage young people not just to train and acquire new skills, but to secure new career opportunities through apprenticeships. I commend her for the work that she is doing in her constituency, and wish her well with her apprenticeship fair.
Bill Esterson (Sefton Central) (Lab)
The Minister seems to have forgotten that not only are people under the age of 25 losing their tax credits, but they will not receive the higher minimum wage when it is introduced next year. Does not the tax credit cut mean that the Tories really are not the party for workers, and does that not apply doubly to young people?
Priti Patel
I remind the hon. Gentleman that the last Labour Government introduced a minimum wage at a differential rate for young people, so we will take no lectures or lessons from his party. Let me also emphasise that when it comes to supporting young people, this Government are focusing on developing the skills and work experience of our young people through the youth obligation. That, too, is something that his party completely neglected when it was in government.
Mr Peter Bone (Wellingborough) (Con)
8. What assessment he has made of the potential effect on his Department of restricting benefits for EU nationals.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
Since the start of last year we have been taking action through a range of measures to restrict access to benefits for EU migrants looking for work in the UK, because the last Labour Government left us an open door. That will ensure that advantage is not taken of our welfare system, and that the system is also fair to those who pay into it. It is estimated that changes made by my Department and Her Majesty’s Revenue and Customs will save more than half a billion pounds over the next few years.
Mr Duncan Smith
My hon. Friend started so well. However, I will avoid his blandishment to take myself even further than I might have.
I remind my hon. Friend—who is doing much to promote himself to a job in the Government—that no one who is unemployed and not a British citizen will be able to receive universal credit at all, which is a huge step towards the arrangement that he is after.
Philip Davies (Shipley) (Con)
I commend the Secretary of State for all the efforts that he is making to restrict benefits for European citizens within the framework of the law, but does he agree that the only way in which the country will ever gain complete control over benefits policy for EU citizens is by leaving the European Union?
Mr Duncan Smith
The Prime Minister has given the country a referendum on that matter, which is a huge step forward for the hon. Member for Bolsover (Mr Skinner) and everyone else—they will all have a vote. My hon. Friend the Member for Shipley (Philip Davies) will, at that moment, be able to make that powerful argument. I am sure, with his rhetoric, he may yet carry the day.
Alan Brown (Kilmarnock and Loudoun) (SNP)
9. What recent assessment he has made of trends in the level of in-work poverty; and if he will make a statement.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
Work is, as my hon. Friends have said, the best route out of poverty, and that is why we are focused on getting people into employment. We have made significant progress and have the highest employment rate on record with over 2 million more people in work since 2010. The number of people in in-work poverty is 200,000 lower than at its peak under Labour in 2008-09.
Alan Brown
As always, the Secretary of State refers back to statistics relating to the previous Labour Government, but the way to solve in-work poverty is not to cut tax credits. Is he aware of analysis by the Institute for Fiscal Studies suggesting that for the 8.4 million working households currently eligible for benefits or tax credits, the new proposed increase in the minimum wage will, on average, offset the cuts by only 26%? That will lead to an increase in in-work poverty. What will he do about that?
Mr Duncan Smith
Let me pick the hon. Gentleman up on a couple of points. First, since the Government came to power, the number of people living in working families and not in poverty is up by about 1.7 million, compared with 2009-10. The number of people in in-work poverty peaked in 2008-09 and the latest figures are 200,000 lower than that peak. On the IFS, it is worth reminding him that in a recent interview on tax credits its director said that the Chancellor had taken the decisions to protect some of the poorest people on tax credits. That is where we are. The Chancellor is clearly looking at the last vote and he will come forward with further measures.
Owen Smith (Pontypridd) (Lab)
In trying to deal with in-work poverty, the Living Wage Foundation today unveiled its new, very carefully calculated rates of £9.40 for London and £8.25 outside the capital. They are designed to reflect the realistic costs of living and average wages. Will the Secretary of State tell us why, therefore, he and his Government continue to describe their new rate, the minimum rate for the over-25s of £7.20, as a national living wage?
Mr Duncan Smith
I made the decision for my Department to pay the London living wage to all the cleaners and everybody else who works on contract. My right hon. Friend the Chancellor came forward with a very generous position in the Budget to raise the national wage to £9 by 2020. That is a huge increase. Perhaps the hon. Gentleman would like to tell me why, throughout the 13 years of the previous Labour Government, they never engaged with raising it to the national living wage either.
Owen Smith
The Labour Government introduced the minimum wage in the teeth of opposition from the Conservative party. I welcome the fact that the Secretary of State pays, in his Department, the London living wage, but continuing to describe the national living wage as just that undermines both the campaign and the concept of a real living wage that people can genuinely afford to live on. The under-25s, as we have heard, will not benefit from this. Is the reason for that, as the Minister for the Cabinet Office and Paymaster General, the right hon. Member for West Suffolk (Matthew Hancock) has told us, that young people are viewed by this Government as unproductive and therefore worth less money?
Mr Duncan Smith
For a moment, I forgot myself. I have been rather churlish. I did not welcome the hon. Gentleman to his post. I welcome him now to his post without reservation. [Interruption.] Well, that is not what he said on Second Reading of the welfare Bill, when he abstained, having decided since that he is really opposed to it. But never mind, the road to Damascus has a new route—I think it is called a career.
Moving on, it is this Government who increased the minimum wage to £6.70 and the living wage to £9 by 2020. Universal credit improves work incentives and supports childcare, with up to 85% of childcare costs covered. The lowest paid and the poorest will be best protected by what we are proposing, and not by leaving the minimum wage where it was under the previous Labour Government.
Andrew Bridgen (North West Leicestershire) (Con)
11. What estimate he has made of the number of households to which the benefit cap no longer applies.
Heather Wheeler (South Derbyshire) (Con)
19. What estimate he has made of the number of households to which the benefit cap no longer applies.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
The benefit cap is having a long-term and positive effect on those who are trying to find work, and on people’s lives generally. More than 60,000 households have been capped since April 2013, and as of May 2015, more than 40,000 households were no longer subject to the benefit cap. Of those, 16,300 households have moved into work.
Andrew Bridgen
I have good news from North West Leicestershire, where two thirds of the households to which a benefit cap applied are no longer subject to that cap. Does that show that the Government are successfully targeting taxpayers’ money in a way that encourages benefit recipients to seek work and reorder their finances, in exactly the same way as those in work do?
Mr Duncan Smith
Yes. The benefit cap is introducing fairness, and the claimant count in my hon. Friend’s constituency is down by 54% since 2010, and the youth claimant count by 64%. We want even more people to benefit from the financial and wider rewards of employment, and that is why we are reforming welfare and getting on with the job.
Heather Wheeler
Since the introduction of the benefit cap, some three quarters of households affected by it in South Derbyshire have taken steps so that they are no longer affected, and that is testimony to those who work tirelessly to help families improve their lot. Will my right hon. Friend join me in welcoming that, and assure me that efforts will continue to help people turn their lives around, and away from dependency and into work?
Mr Duncan Smith
I absolutely agree, and as I have said, the benefit cap is working. We are changing the levels at which that cap is set to improve it and to make it work further around the country. In my hon. Friend’s area, the east midlands, the number of workless households has fallen by 68,000 under this Government—households that are now benefiting from that return to work.
Jeremy Lefroy (Stafford) (Con)
12. What steps he has taken to ensure that his Department's policies promote family stability.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
Family stability is at the heart of this Government because it creates better outcomes for children and society. We have taken a number of steps to promote family stability, including the family test, investing more than £8 million in relationship support, introducing the marriage tax allowance, and increasing childcare support to promote work as the best foundation for family stability.
Jeremy Lefroy
I welcome the Secretary of State’s answer. The cost of relationship and family breakdown has been estimated at some £47 billion a year. I welcome the support for relationship advice, but I ask the Secretary of State to do more on that and to help turn around the lives of troubled families.
Mr Duncan Smith
I pay tribute to my hon. Friend. He has made support for families an important issue, and I have talked to him on a number of occasions. I believe that the troubled families programme is critical in supporting families with multiple and often highly complex problems to turn their lives around. Between 2013 and 2015, the DWP created 150 troubled families employment advisers to support people, and 116,000 families have been turned around with nearly 12,000 adults moved into continuous employment. I hope that helps my hon. Friend to understand that the Government are serious about this issue.
Mrs Madeleine Moon (Bridgend) (Lab)
Poverty is a destructive element for family stability. Has the Secretary of State read the Joseph Rowntree Foundation report, “Monitoring poverty and social exclusion in Wales 2015”? It points out that working families and young people in Wales are at greater risk of poverty now than they were a decade ago, that 45% of all part-time jobs are classified as low paid, and that for those who work part time or are self-employed, the number of families living in poverty has increased by 100,000 in the past decade. It states that changes in the Welfare Bill will be damaging for families in Wales. Does the Secretary of State acknowledge that?
Mr Duncan Smith
I acknowledge that the Joseph Rowntree Foundation has written its report, and it has said many things in the past about what we have been doing. As I said earlier, the number of families that have risen out of poverty directly as a result of our changes has been dramatic. As the hon. Lady well knows, Wales had a difficult time in the recession, but unemployment is now falling dramatically and employment is rising. I believe that the best way to get people out of poverty is to get them into work, and eventually into full-time work. That is happening right now.
Barbara Keeley (Worsley and Eccles South) (Lab)
16. What discussions he has had with the Chancellor of the Exchequer on the effect on family carers in receipt of carer’s allowance of reforms to benefits and other financial support.
The Parliamentary Under-Secretary of State for Disabled People (Justin Tomlinson)
This Government recognise the need to protect and support the most vulnerable in society including pensioners, those with disabilities and their carers. Stronger rights for carers have been introduced through the Care Act 2014. Since 2010, carer’s allowance has increased from £53.90 to £62.10 a week, and in April 2015 the earnings limit for carers was increased by 8% to £110 a week.
Barbara Keeley
Indeed, but now there is a real threat, because around 700,000 family carers on carer’s allowance who work 16 hours a week at the minimum wage and can therefore claim working tax credit are going to be hit by the Government’s proposed tax credit cuts. The exact number is not known, but it is probably quite a lot of that group. Most of those carers cannot increase their working hours because they have such a big caring workload. They deserve, in my view, to be exempt from the Government’s tax credit cuts, so are DWP Ministers and the care Minister arguing now for this group of carers to be protected from the cuts?
Justin Tomlinson
The Chancellor said he will set out in the autumn statement what he will do to address the concerns some have raised about the transition from a high welfare, low wage economy to a low welfare, higher wage economy. As it stands today, we spend over £2 billion—a record amount—on supporting the valuable work carers provide in society, and the inter-ministerial meeting this Thursday, in which I will actively participate, will look at further ways in which we can support carers.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
17. What progress he has made on reducing the number of people in long-term unemployment.
The Minister for Employment (Priti Patel)
Long-term unemployment has continued to fall and is down by well over 250,000 compared with 2010, falling to its lowest level in over six years.
Mrs Gillan
I applaud the Government’s current work in reducing the number of people in long-term unemployment, which is really impressive. May I particularly welcome the commitment to halve the disability employment gap? Does the Minister realise, however, that only 15% of autistic adults are in full-time paid employment? What progress will she make to address the gap in this specific disability and provide autistic people with the opportunities they deserve?
Priti Patel
My right hon. Friend is absolutely right that there is more to do in this space. We have over 200,000 more people with disabilities in work than this time last year. We will build on that and continue to secure opportunities for autistic adults to get a job and remain in employment.
Sir David Amess (Southend West) (Con)
21. Is my hon. Friend aware of the dramatic fall in long-term unemployment in Southend West of 49%? Please will she reassure me that the Government will continue to pursue the economic policies that have made this happen so that we reach the happy position where there is a job available for everyone who wishes to work?
Priti Patel
My hon. Friend is absolutely right about the record levels of employment in his wonderful constituency and across Essex, which is booming when it comes to private sector jobs. We can never be complacent. The claimant count has nearly halved since 2010, and it is encouraging that we see through our long-term economic plan, with more and more people in private sector employment than ever before.
Mark Pawsey (Rugby) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
Today the Legatum Institute is publishing is global prosperity index. I raise it because it ranks countries on a number of measures, including the economy and levels of opportunity, with the UK rising nine places in the economic index, which is the latest evidence showing the positive impact of our reforms. As today’s report shows, thanks to our welfare reforms and economic reforms more people than ever have the opportunity to benefit from the dignity and sense of purpose that comes from having a job.
Mark Pawsey
I have been contacted by a number of constituents who have been in receipt of a Motability vehicle and have appealed against a PIP assessment. They tell me that it can take months for their appeal to be heard, during which their entitlement to the vehicle, to which expensive adaptations have sometimes been made, is withdrawn. What steps can the Minister take to ensure that those rightly in receipt of a Motability vehicle retain it?
The Parliamentary Under-Secretary of State for Disabled People (Justin Tomlinson)
We are working closely with Motability to put in place a package of support for those who lose their eligibility. Claimants will be able to keep their vehicles for almost two months and most claimants receive a one-off payment of up to £2,000 to maintain their mobility. In addition, we have reformed the DWP appeals process with the introduction of the mandatory reconsideration. This enables disputes to be addressed more quickly. Finally, Her Majesty’s Courts and Tribunal Service continues to focus on reducing waiting times, and I would be happy to work with my hon. Friend further to see what progress can be made.
Emily Thornberry (Islington South and Finsbury) (Lab)
Given the considerable disquiet in the country about cuts to tax credits, not to mention the alarm on the Secretary of State’s side of the House, where 20 of his own MPs have said that the Government are in danger of cutting a lifeline to working families, does he now regret describing tax credits as a “bribe”?
Mr Duncan Smith
The hon. Lady should remember exactly how the money was spent. If she looks back, she will find that in the run-up to the 2005 general election, the then Chancellor raised the spending on tax credits, strangely, by 71%. After that the rate stayed pretty flat, but before the 2010 election it was suddenly raised again by nearly 23%. I simply say to the hon. Lady that if she does the maths, she might wonder why Labour lost the 2010 election.
Neil Carmichael (Stroud) (Con)
T4. Will the introduction of universal credit, and all the associated data that that entails, enable the Government and the Department to help young people on low incomes to find new opportunities to progress into higher-paid jobs?
Mr Duncan Smith
Yes. What happens now when someone on jobseeker’s allowance gets a job is that they disappear and nobody sees them. Under universal credit they will stay with their adviser, who will help them with any subsidiary training, help them to find extra hours if they want them, and help them to sort out any problems at work. That is a remarkable change, and it will give us the opportunity really to help people to progress in work.
Paul Blomfield (Sheffield Central) (Lab)
T2. According to the Office for National Statistics, nearly one in four jobs in my city of Sheffield pays less than the real living wage. On the day that the living wage is being increased to £8.25 an hour, will the Secretary of State congratulate the Living Wage Foundation on its work and outline what he will do to ensure that more people are paid the real living wage, which is now over £1 an hour more than the Government’s bogus national living wage?
The Minister for Employment (Priti Patel)
This Government are very clear that it is through our welfare policies that we are ensuring that work pays. As the hon. Gentleman heard me say earlier, we are introducing a national living wage next April which will ensure that work always pays and that people in the country are given a pay rise.
Andrew Rosindell (Romford) (Con)
T5. What actions is the Department taking to support the small businesses in Romford and the London borough of Havering that are seeking to provide support and training to adults so that they can develop skills for successful employment?
Priti Patel
I know that small businesses in my hon. Friend’s constituency are flourishing and expanding at an impressive rate. Jobcentre Plus works with a range of providers to make specialist courses available, covering information and communications technology as well as many construction courses. In particular, we are working with businesses to ensure that the local labour market is growing in the right way and that people are getting access to the skills they need.
Jack Dromey (Birmingham, Erdington) (Lab)
T3. With one in four workers in Erdington earning less than the living wage, 82% of children are being brought up in families that are dependent on tax credits. Does the Secretary of State not accept that this is the worst possible time to cut tax credits, and that those families will not be compensated by his phoney living wage? Will he join me in welcoming the initiative taken today by the Labour-led Birmingham City Council to declare that no Brummie in the city should earn less than the real living wage?
Mr Duncan Smith
Despite all the other arguments, the Labour Government had 13 years in power and they let the national minimum wage fall further behind than ever before. It is this Government who have increased the minimum wage and who are now proposing a real living wage of £9 at the end of this Parliament.
Nicola Blackwood (Oxford West and Abingdon) (Con)
T6. I welcome the Minister’s commitment to introducing a yellow card system for sanctions, but does he agree that we also need to ensure that claimants with mental health problems are placed in the right group in the first place? Will he reaffirm the commitment that I received from his predecessor, following a tragic constituency case, to improve mental health training for assessors and decision makers?
Justin Tomlinson
This is an important area, in which the Government have rightly invested an extra £1.25 billion in the March 2015 Budget. We have rolled out a £43 million series of pilots to provide face-to-face, group, online and telephone support. We also have mental health and wellbeing partnership managers and disability employment advisers right across the jobcentre network. We will continue to push further training, as this is an important issue.
Andy Slaughter (Hammersmith) (Lab)
T8. Over the previous Parliament, the number of working families in London claiming housing benefit increased by 84%. Over the past three years, London councils have been able to replace only one in seven of the council homes they have sold. Does the Minister see any connection between those two figures?
Mr Duncan Smith
What the hon. Gentleman failed to remind us all is that under the last Government the number of people claiming housing benefit, both out of work and in work, rose dramatically, whereas under this Government the number of those claiming housing benefit out of work has fallen dramatically.
Kevin Hollinrake (Thirsk and Malton) (Con)
T7. I welcome the reforms to welfare, which have helped 609 people in my constituency back into work since 2010. Moving from benefits into work can cause cashflow difficulties, so I additionally welcome the initiative to put Jobcentre Plus advisers into food banks to make sure those delays do not occur. What progress are we making on speeding up benefit claims to make sure those situations do not occur?
Mr Duncan Smith
We want to ensure that anybody who goes to a location such as a food bank has the ability to check whether there is a problem—if there is, let us deal with it there. We have also advertised hugely across all the jobcentres, telling everybody they can get benefit advances, hardship loans and so on. We are now beginning to find that when they go to the food banks, they are also being helped to get back into work, which is an added bonus.
Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)
T9. On the administration of the benefit sanctions regime, yesterday’s Sunday Herald reported new figures showing that in nearly 300,000 cases benefit claimants had been penalised with sanctions without being officially notified—that includes an estimated 28,000 cases in Scotland alone. Will the Minister apologise to all those who have faced destitution without proper notice? Will he finally commission an independent review of this badly intentioned and poorly administered system?
Mr Duncan Smith
I do not recognise those figures, but I will say to the hon. Lady that back in 2001 the last Labour Government decided to move—
Mr Duncan Smith
Well, she asked the question and if she does not want the answer, that is fine by me. What I am saying to her is that the last Labour Government moved to a clerical system. We have reviewed that approach over the past year and decided that, under the changes we want, going back to an automatic system is much better. The recent statistics released last week show that the rate of appeal was slightly higher among those who did not receive the initial letter appeal than among those who did; we therefore do not think there is a difference. We will be writing to people to remind them that they still have rights to appeal if they wish to do so.
Richard Fuller (Bedford) (Con)
A substantial benefit of the issues relating to tax credits is that more companies are encouraged to pay the national living wage—£9 an hour—now. What conversations has my right hon. Friend had with the Chancellor about incentives that we could provide to companies to pay £9 an hour?
Mr Duncan Smith
Yes, the No. 1 reality is that companies that believe the economy is well run will invest in their workforce and give them a better salary. The problem was that the last Labour Government set up a system that encouraged companies to pay low wages and leave them static. The change now is this: universal credit is making them move on; higher salaries; a better wage packet. Many companies are already paying the higher level—they have come and said they will.
Greg Mulholland (Leeds North West) (LD)
I was pleased to meet the Under-Secretary of State for Disabled People to discuss children with Batten disease who were having to re-apply for disability living allowance, but we were disappointed to be told that we would not get a formal response. Will the Minister ensure that the Batten Disease Family Association gets a formal response about how the Department will take the recommendations forward?
Justin Tomlinson
I thank the hon. Gentleman for raising that issue. I am very disappointed to hear what he says and I will make sure that a formal response is sent. I was very grateful to both the hon. Gentleman and the Batten Disease Family Association UK for taking the time to help proactively support the changes that we needed to make.
Michelle Donelan (Chippenham) (Con)
Does the Minister share my view that a huge part of tackling youth unemployment is ensuring that people leave the education system work-ready? What has been done to help achieve that?
Priti Patel
My hon. Friend is absolutely right in what she says. I know that she is doing a great deal in her constituency to champion apprenticeships, which of course support young people not just in getting into work, but in developing long-term careers.
Peter Kyle (Hove) (Lab)
According to the Department’s own figures, pension contributions by the self-employed have fallen year on year for the past five years. What is the Secretary of State going to do to reverse that trend?
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)
We are liaising with companies and individuals and also ensuring that people take some individual responsibility, by looking at their statements and contributions and thinking ahead. We are also encouraging companies to be proactive and to ensure that their workers take part in the auto-enrolment process and that those workers are protected.
Tom Pursglove (Corby) (Con)
Building a broad skills set is crucial for entering the world of work, so is the Department actively promoting schemes such as the National Citizen Service, which provides a really unique opportunity to do exactly that?
Justin Tomlinson
We have already had cross-departmental meetings to look at how we can further promote the National Citizen Service. As an MP, I can say that it is one of the schemes that was introduced in the previous Parliament of which I am proudest. It absolutely transforms children into young very employable adults; it is a brilliant scheme.
Diana Johnson (Kingston upon Hull North) (Lab)
What discussions has the Secretary of State had with the Department of Health about passporting on to the new disability benefits, without the need for further assessment, those people who received contaminated blood from the NHS and contracted HIV and hepatitis C? That is causing such concern to those who are affected.
Justin Tomlinson
I thank the hon. Lady for her question. I will have to provide her with a written update.
Jake Berry (Rossendale and Darwen) (Con)
Given the Government’s ambition to have all benefit claims online by the end of this Parliament, will the Minister update the House on what discussions he has had with internet service providers to ensure that those on low incomes can get online?
Mr Duncan Smith
The ambition is to get as many claims online as we can, but there will be some people who cannot get online. Under universal credit, we are keen to ensure that people can, if necessary, continue to make paper submissions, and that they will be treated inside jobcentres, but we will get as many online as we can. We have been talking constantly to the providers about how best to do this, and also about matters of security.
Mr David Winnick (Walsall North) (Lab)
For clarification, is the Secretary of State pleased that, as a result of sustained parliamentary and public pressure, the Chancellor has been forced to reconsider the proposals on tax credits? Is that a matter that meets with his approval?
Mr Duncan Smith
Everything the Chancellor proposes meets with my approval, as I am a member of the Government.
Barbara Keeley (Worsley and Eccles South) (Lab)
The Under-Secretary of State for Justice, the hon. Member for North West Cambridgeshire (Mr Vara), said earlier that letters were sent to all women born in the 1950s to inform them of changes to the state pension age. I have to say to him that the campaigning group, Women Against State Pension Inequality, disagrees with him. I have constituents who were not informed of the changes, and they suddenly discovered that they were not going to retire soon and that they had many years to retirement. Will the Minister look again at that issue and reconsider whether that group of women affected—there are many hundreds of thousands of them—can now have transitional protection?
Points of Order
Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)
On a point of order, Mr Speaker. I note that, on the Order Paper today, we have the first instance of English votes for English laws certification from you. I also note that on the notes to the Bill, it states specifically on page 60 that clauses 108 to 110 relate to Scotland, while in the certification they are said to relate to England only. May I request clarification of that apparent anomaly?
Mr Speaker
I commend the hon. Lady for the predictable application of her beady eye to these important matters, but she should rest content in my own certification decisions. In other words, if there appears to be any conflict between my certificate and what happens to appear in the explanatory notes, she should be content with the former as the definitive guide. Perhaps we can leave it there for now.
Mr Speaker
We cannot have a debate about it, but I will indulge the hon. Lady further, very briefly.
Ms Ahmed-Sheikh
Further to that point of order, Mr Speaker. Given that Bills are to be certified at this stage in proceedings, what thought has been given to intimate to Members who may be affected by such certification when there is a difference between what is in the notes and what is in the Bill and the certification, as Members might wish to make representations to you on those matters?
Mr Speaker
Decisions on certification are what matters. I do not want to anticipate what might be seen to be, or indeed be, contrary elements. The hon. Lady is now well familiar with the geography of the Palace of Westminster. She knows exactly where the Table Office is and, to judge by her general high level of activity in this Chamber, I rather suspect that she makes frequent visits to it. She knows how to go to the Table Office, how to consult the Clerks, and how to consult me. At any rate she can be untroubled on this matter for today and, I hope, in the future. She might not always like the certification decisions, but she need not be in any doubt what they are.
Mr Speaker
Before the hon. Gentleman, in a state of uncontrollable excitement, rises to his feet to raise a further point of order, may I politely suggest to colleagues— I think the hon. Lady had in some sense anticipated this—that I say what I was going to say in any case on certification now, appertaining to today? If after that the appetite of hon. Members to raise further points of order remains, doubtless I will be the first to hear it.
I remind the House that I have certified some provisions of the Housing and Planning Bill under Standing Order No. 83J in relation to England, and some in relation to England and Wales. I further remind the House that this does not affect proceedings in the debate on Second Reading, or indeed in Committee or on Report. After Report stage, I will consider the Bill again for certification and, if required, the Legislative Grand Committee will be asked to consent to certified provisions. I hope that is clear.
Mr Speaker
I hoped that that would have satisfied you, Mr Mullin, but apparently not.
Roger Mullin
Your clarification was helpful, Mr Speaker, but not pertinent to my point. Will you clarify the extent to which possible Barnett consequential effects are taken into account in the certification process, such as those in the Bill we are about to consider, which proposes the extension of national infrastructure projects to encompass housing?
Mr Speaker
The short answer to that question is no, because it is incumbent on me to make decisions on certification without explanation. That might seem not readily obvious to new entrants to the House, and I do not mean that discourteously, but it is very much in conformity with the usual practice of what is expected of the Speaker. If I may try to be helpful to the hon. Gentleman, the analogy is with the decision on an urgent question. The Speaker makes a decision on urgent questions that is not then subject to debate or a requirement to explain it in the Chamber. The decision is made, it is communicated and that, for the Chamber, is the end of it. I hope that is helpful—but, whether it is or not, that is what I have to say.
Housing and Planning Bill
21:59 - The House divided: - Ayes: 228 / Noes: 305 - Question accordingly negatived.
22:13 - The House divided: - Ayes: 306 / Noes: 215 - Question accordingly agreed to.
22:26 - The House divided: - Ayes: 300 / Noes: 159 - Question accordingly agreed to.
22:38 - The House divided: - Ayes: 298 / Noes: 138 - Question accordingly agreed to.
Mr Speaker
I must inform the House that I have selected the amendment in the name of the Leader of the Opposition.
The Secretary of State for Communities and Local Government (Greg Clark)
I beg to move, That the Bill be now read a Second time.
Every Parliament that is elected has a responsibility to the future and to do all that it can to ensure that the lives of the next generation are better than those of past generations. Nowhere is that more important than in ensuring that the next generation have the homes they need. Indeed, it is not just about the next generation. The impact of much of the public policy that we debate is on the here and now or the next few years ahead. If we look around any city, town or village in Britain, it is obvious that housing endures for many decades and, in some cases, for hundreds of years. Every home that is built is much more than a pile of bricks and mortar or concrete and glass. The homes that we build shape the lives, for better or for worse, of generation after generation of people who live in them.
As Churchill said:
“We shape our buildings and afterwards our buildings shape us.”—[Official Report, 28 October 1943; Vol. 393, c. 403.]
Providing the homes that we need is a responsibility that unites us all in this House. For many years now, we have not built enough homes in this country. That is true of successive Governments and has been true for many decades. New households have been forming in Britain at a rate of about 200,000 a year, yet the last year in which we built 200,000 homes was 1988.
Joan Ryan (Enfield North) (Lab)
Is the right hon. Gentleman aware that over 4,800, or 7%, of children in Enfield live in temporary accommodation? I fear that his Bill, which damages the number of affordable homes available, will make this problem immeasurably worse.
Greg Clark
As I hope the right hon. Lady will recognise from my remarks, our purpose and intent in this Bill is to increase the number of homes—that is our absolute objective—so that those children have the prospect of a roof over their heads in the years to come.
I was reflecting on how it has been many years—more than a generation—since this country built the number of homes that we need. During the financial crash, house building in Britain suffered what might be called a cardiac arrest, because in the third quarter of 2008 we were fewer than 20,000 homes away from stopping building altogether—the lowest rate of peacetime house building since the 1920s. It was not just that the banks would not lend, though they would not; it was a reckoning for a decade in which we had a top-down planning system, which the right hon. Member for Wentworth and Dearne (John Healey), when he was Planning Minister, was magnanimous enough to concede had few friends. When that was imposed, it built bureaucracy and resentment but not many homes. It followed a decade in which the number of affordable homes fell by nearly half a million, and in which fewer than 200 council houses a year were built in the whole of England. It was a lost decade in which the rising level of home ownership fell into reverse in 2003 for the first time since the 1960s.
Andy Slaughter (Hammersmith) (Lab)
Will the Secretary of State explain how selling housing association properties, subsidising that sale by selling council properties—half the stock, in the case of my local authority—reducing local authority incomes to build properties by reducing rent, and allowing developers to get away without building any social homes helps the thousands of people in housing need in my constituency?
Greg Clark
I will come on to address those points, but I say now that the reason it helps is that we are requiring a new home to be built for every home that is sold to council tenants, and that will improve the housing stock in London.
We had a decade when the housing market almost ground to a complete halt and home ownership fell for the first time since the 1960s. It was a period in which the Chairman of the Select Committee, the hon. Member for Sheffield South East (Mr Betts), who is in his place, said, reflecting the shared view, that the Government whom he had supported for 13 years did not build enough homes. Other Labour Members, including Front Benchers such as the shadow Home Secretary, the right hon. Member for Leigh (Andy Burnham), agreed, concluding that Labour did not do enough when in government. We agree. As is obvious from what I have said, Governments of different parties did not do enough over the years.
During the previous Parliament, home building revived and we got Britain building again. We scrapped the regional spatial strategies and we reformed planning policy. That was fiercely resisted at the time. Some of us, including the hon. Member for City of Durham (Dr Blackman-Woods), who I believe is to wind up for the Opposition, will remember those debates, in which Members were very critical of our proposals. Now, three years on, nearly 250,000 homes a year are receiving planning permission—up by nearly 60% since 2010.
John Redwood (Wokingham) (Con)
Will the Secretary of State send a very clear message to councils that there is a huge demand from people who want to be homeowners for affordable homes that they can purchase, and that councils can hit their affordable home targets by bringing those forward?
Greg Clark
My right hon. Friend is absolutely right. If we reflect on years past, we see that when 86% of people aspire to become homeowners it is not just homes for rent that are needed, but affordable homes for purchase. We are correcting what has been a historical anomaly.
Mr Clive Betts (Sheffield South East) (Lab)
The Secretary of State quoted what I said in a debate during the previous Parliament, when I did accept that the Government whom I supported for 13 years did not build enough homes, but if he looked at the remainder of the quotation, he would see that I said that the problem was that the coalition Government built even fewer.
Greg Clark
The hon. Gentleman knows very well that since the previous Government the number of homes being built has increased substantially. In fact, it has increased by over 50% since we came to office. Planning permissions, as I mentioned, are now running at almost 250,000 a year, for the first time in many years getting to the level we need to provide homes for the population as it rises.
Caroline Lucas (Brighton, Pavilion) (Green)
Given that the Bill fails to include any legal commitment to replace social homes that are sold under right to buy on a one-to-one basis, does the right hon. Gentleman accept that selling off valuable council homes to fund the extension of right to buy means that we are losing two social homes to rent in return for just one social home to buy? That is an overall loss.
Greg Clark
The hon. Lady will find that the rate of additional stock that is being provided in response to the reinvigorated council right to buy is running at over one for one, and the agreement that we have been able to reach with the housing associations—if she has not had a copy of it, I will make sure that she gets one—makes it very clear that these homes will be replaced on at least a one-for-one basis. I should not say “replaced”, because the homes continue to be occupied; they trigger an additional home that is being built.
Greg Clark
I shall make some progress, then I shall give way. I am coming on to talk about London, and the right hon. Gentleman will no doubt have something to say then.
We scrapped the regional spatial strategies and we saw planning permissions increase as a result of those reforms. We have allowed local communities to have more of a say through neighbourhood planning, and now over 1,600 neighbourhood plans have been adopted or are in production. We built 260,000 affordable homes, nearly a third of them in London, and in the next five years we will build 275,000 more, the most for 20 years. We have helped hundreds of thousands of people achieve their dream of home ownership, with Government schemes such as Help to Buy doubling the number of first-time buyers in the previous Parliament.
Sir Alan Duncan (Rutland and Melton) (Con)
On affordable homes, when a council insists on a certain percentage of any project having to be affordable, the consequence is that the developer has to pay for them in cross-subsidy by building an extra number of larger homes. The effect then is to squeeze out the smaller two-bedroom and three-bedroom homes, thus cutting away the middle of the housing ladder. Can my right hon. Friend assure me that he has considered this consequence and has addressed it, both in his policy and in the Bill?
Greg Clark
When we wrote the national planning policy framework, one of the things that we intended was that a local community should reflect the entirety of the planning needs in its area for all types of accommodation. That is reinforced in this Bill.
Sadiq Khan
On affordable homes in London, does the right hon. Gentleman accept his Department’s own figures, according to which, over the past three years, 9,025 homes have been sold in London under right to buy and there have been 1,310 starts on replacements? That is seven homes sold for every home started. If that is the Government’s record, why should we believe that things will be different going forward?
Greg Clark
I was going on to say that in London during the first year of the reinvigorated right to buy, 632 homes were sold and already, a year before the deadline for councils, 1,115 starts have been made. The rate of provision of additional homes in London is running at nearly two for one. I hope the right hon. Gentleman will celebrate that.
When we reinvigorated the right to buy for council tenants, we ensured that every home sold to a resident would allow another home to be built. It is as much a policy for expanding the housing stock as it is for extending home ownership, desirable though that is.
Several hon. Members rose—
Greg Clark
I shall make some progress.
Nationally, of the 3,054 additional sales made in the first year, 3,337 new properties have been started within two years, and councils have three years to be able to build—a rate of more than one for one. As I said to the right hon. Gentleman, in London the rate of provision of additional housing is running at around two to one. It is worth saying that under Labour, during the time when so few council homes were sold, the rate of new build for every house sold under the right to buy was one in 170. I would have thought that Labour Members could show more humility about that.
David Mackintosh (Northampton South) (Con)
Does my right hon. Friend agree with me, as someone with some experience in this, that the barriers to building new council houses are not about replacing right-to-buy properties, but lie in the planning processes that will be dealt with in the Bill?
Greg Clark
My hon. Friend is right. From conversations with local authorities right across the country, I have found that one thing they intend to do—to do what Members on both sides of the House want, which is to provide homes for the next generation—is make sure that the planning system is speedier and more accommodating of the need for more homes, especially on brownfield sites, for which the Bill will provide a major boost.
If our task in the last Parliament was to rescue the housing market, our task now is to renew it. Building even at the current rate is not enough. The lost years of housing deficit—building fewer homes than the rate at which new households are forming—has led to a chronic shortage of homes compared with what this country needs. That means getting back to building homes at the rates we last saw in the 1980s and previously, giving hope to the 86% of people in this country who want to become homeowners and taking steps to ensure that properties available for rent are properly managed, with no place for rogue landlords.
To provide these homes will require us to work together—Parliament, central Government and local government, house builders and housing associations—to find the land and grant planning permission, as my hon. Friend the Member for Northampton South (David Mackintosh) said, as well as to finance the development, build the homes and give people the chance to own or to rent them. The Bill helps us to do that.
Catherine West (Hornsey and Wood Green) (Lab)
Does the Secretary of State accept that the failure of the Government to deal with the housing crisis has meant that private rents have reached an all-time high of £803 per month—and more in London—and have continued to rise, with a 20% increase since 2010? Yet wages have failed to keep up with that increase.
Greg Clark
The hon. Lady makes my case for me. The consequence of such a long period of failing to provide the homes we need is of course reflected in their price. That is why the purpose of the Government—and, I hope, of the House—is to build more homes to make sure that they are available in quantity to the next generation.
Alec Shelbrooke (Elmet and Rothwell) (Con)
Does my right hon. Friend agree that, for all the howling from Labour Members, the fact that house prices went up threefold to fourfold during the Labour Government is why young people find it so hard to get on to the housing ladder, with house prices accelerating way beyond salaries? Of course, that was during Labour’s alleged economic miracle.
Greg Clark
I could not agree more. It is economics plain and simple. I do not know whether it is Corbynomics, but it is certainly the laws of economics: if we do not build enough homes, prices will go up and get beyond the reach of ordinary people.
Mr David Burrowes (Enfield, Southgate) (Con)
The Bill recognises the aspirations of those who want to own their own home, but does the Secretary of State also recognise the hopes of homeless Londoners who want a decent roof over their heads? Will he recognise that St Mungo’s has signed up and agreed to the housing association right to buy, but will he also recognise the importance of receipts remaining in London to cross-subsidise the vital work done by St Mungo’s in helping vulnerable Londoners?
Greg Clark
I have said that it is important that we provide more homes across the country, but particular in London, where we know that demand for homes by people of all types—families and single people—is very acute. The purpose of the Bill is to allow us to provide more homes in London, as I shall go on to say.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
Will my right hon. Friend give way?
Mrs Gillan
May I extend a warm welcome to this long overdue legislation? May I point out to my right hon. Friend that in my local authority area, Chiltern District Council, we have some of the highest average property prices in the country? Even with the 20% discount applied to properties known as starter homes, it will therefore be jolly difficult for some of our young people to afford those homes. In addition, will he tell us how my local council can prioritise those homes for local people?
Greg Clark
We need to provide homes of all sorts. It is important to continue to provide homes for rent and to provide homes for purchase. My right hon. Friend will have constituents who have grown up in her constituency, who have had family connections there for many years and whose friends and relations are there, and they have to leave her area not because they want to, but because they have to. It is important to provide more homes in areas such as hers, as well as across the country.
Peter Kyle (Hove) (Lab)
In areas such as Brighton and Hove, where land for development is extremely constrained, it is likely that the money that is raised from the right to buy will be spent elsewhere, outside the city. Will the Secretary of State confirm that the money raised through right to buy will be spent in the city?
Greg Clark
What the hon. Gentleman describes is not the experience across the country, including in Brighton and Hove. Councils are overwhelmingly able to build extra properties as a result of the sale of existing homes. I am not aware that Brighton and Hove proposes to return the money to the Government, which means that it is confident that it will be able to provide the extra homes.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
Will the Secretary of State give way?
Greg Clark
I am going to make some progress.
Before I took the interventions, I was saying that if we are to find the land, grant the planning permission, finance the development and build the homes, it is essential that the various players in the housing market come together to do it. It cannot be done individually. The Bill will help with that.
Let me take the example of the right to buy. Home ownership is an aspiration for 86% of people in this country. The Bill will make it possible, through the agreement that the housing association sector has made with the Government, to extend the right to buy to all 1.3 million tenants who currently do not have the right to become homeowners. That agreement is good for
“residents, for housing associations and the nation’s housing supply. Residents will get the opportunity to realise their dreams of homeownership and housing associations will be able to replace the homes sold, boosting the nation’s housing supply.”
Those were the words of the head of the housing associations’ collective body, the National Housing Federation.
It has been a 30-year injustice that council tenants have had the right to buy their homes but housing association tenants have not. I strongly believe that when they signed a tenancy agreement, housing association tenants did not sign away their aspirations to become homeowners. Housing association tenants share the same hopes and dreams as everyone else. They live on the same streets, they shop in the same stores, their children go to the same schools. It is only right that they should have the same opportunities as council tenants.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
First, will the Secretary of State confirm that the National Housing Federation does not support the sale of council housing property to fund this policy? Secondly, will he confirm that the purchase of housing association properties will be available to EU nationals after paying taxes for just three years?
Greg Clark
The previous Government reduced the residence qualification for overseas nationals. We have proposed extending it. The combination of the residence requirement for social housing and the requirement to be a resident for three years before the right to buy comes in means that it will be seven years before there is any entitlement for an overseas national.
Steve Brine (Winchester) (Con)
I thank the Secretary of State for the way in which he and his Ministers, especially the Minister for Housing and Planning, have engaged with colleagues across the House as the Bill has come together. I was pleased when we announced the extension of the right to buy in our manifesto and I will support the Bill tonight. However, some rural communities in my constituency want to know whether the current exemptions in respect of rural exception sites will continue in the extended right to buy. Can the Secretary of State reassure me and my constituents?
Greg Clark
I certainly can. This shows the benefit of having a conversation with everyone who is affected. Colleagues across the House wanted to be reassured that, in those areas where it simply is not possible to provide a new home, a solution could be found to allow their housing stock to be maintained while at the same time allowing those in rural communities, who have the same aspirations as others, to own a home of their own. What we have agreed with the housing association sector, through its proposals, is that, while an association will be able to say that it is not possible to build a new home in certain areas, people will be entitled—this is a real opportunity for our constituents across the country—to apply their discount to a new home that the housing association will build in the nearest area in which it is possible to build one. That is a real result for every rural area in the country.
Dr Sarah Wollaston (Totnes) (Con)
Will the Secretary of State confirm that, if housing associations decide to sell off higher-value properties in rural communities, there must be like-for-like replacement in those communities? Otherwise, the demographic loss of young people from small rural communities will continue.
Greg Clark
The advantage of reaching an agreement with the housing associations, which are locally based and whose mission is to provide homes in their areas, is that they are positively enthusiastic about it, as the head of the National Housing Federation made clear to the Communities and Local Government Committee the other day.
Greg Clark
The Labour party’s approach, not just in this area, but to our devolution proposals, is genuinely disappointing. I and my colleagues have found that it is entirely possible to talk to and to come to consensual agreement with people who have the same interests as us. The Labour party, however, seems to set its face both against that kind of dialogue, whether it relates to devolution or the matter under discussion, and against our approach to establishing consensus on the best way forward.
Boris Johnson
I congratulate my right hon. Friend on the arguments he is making. Does he not find it perverse and incredible that the opposition to extending the right to buy to people on low incomes in this country should be mounted not just by the Labour party, but by people who are overwhelmingly owner-occupiers of their own homes?
Greg Clark
My hon. Friend makes a very important point. For anyone who has any doubt about the policy’s personal impact, I will illustrate it by reading an email I received from a young mother on the day on which our right-to-buy agreement with housing associations was announced last month. She wrote that,
“during the middle of the economic crisis in 2009…I was…made redundant from a job that I had been in for twelve years. I was left with a six year old, a three year old and a newborn baby and life was pretty much as grim as it could get.
For the past five years I have lived in a housing association home. At the time—it was very much a lifeline and I am enormously grateful for the safety, security and peace-of-mind that it brought me.”
She went on to say that,
“up until April of this year—I had simply accepted that this was my life now and would always be. I would forevermore be ‘just about’ comfortable: ‘just about’ paying the bills, ‘just about’ paying for Christmas. ‘Just about’ living.
But in late April that completely changed for me. I heard somewhere that the Conservatives were going to allow housing association tenants the right to buy their own home…I had completely written off ever being able to achieve that goal.
I voted Conservative in May because of that hope.”
She continued:
“I watched and read intently all about the Conservative’s crazy, ridiculous policy. I read the negative fall-out from Housing Associations, from Labour, from literally everywhere…And of course—all of these associations, politicians, media have far bigger voices than people like me. By September I had resigned myself to the fact that this looked like a lost-cause.
I am absolutely eternally grateful to everyone in the Conservative government that helped push this forward. I absolutely cannot wait until the point, hopefully in 2016, where I can be holding the keys to the house that I own. A house that will be my savings for the future. A house that will allow me to pass something onto my three girls.
Please, please pass on my very heartfelt gratitude to everyone involved in ensuring this was made a reality. For me, it’s life-changing.”
As this lady made clear, this policy, agreed with the housing associations, is giving people up and down the country the chance to fulfil a dream they thought was beyond them. As my hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) said, it is disappointing, therefore, that the Opposition are turning their backs on such people’s aspirations and trying to take away the hope of home ownership that they have nurtured and which the Bill introduces.
John Healey (Wentworth and Dearne) (Lab)
The Secretary of State will know that housing associations have a long, proud history as independent bodies and that the main reason many signed up to this voluntary deal was to avoid their reclassification as public bodies by the Office for National Statistics, but it has now done just that. When did he know that this reclassification was on the cards? Was it before or after he made the agreement with the housing associations?
Greg Clark
I am astonished by the right hon. Gentleman’s intervention, because the ONS, completely independent of the Government, has made it clear that the reclassification, which we intended to be temporary, has nothing to do with any action by the Government. The reason for the reclassification is the clumsy—I might even say clunking—provisions of the Housing and Regeneration Act 2008, taken through the House when he was a Minister. He should be apologising for the predicament into which he put housing associations. As hon. Members will have noticed, one benefit of our agreement with the housing associations is the ability, as reflected in the Bill, to deregulate the housing association sector to correct the damage he did when he was Minister.
John Healey
The Secretary of State gives the House partial information. He will know also that the ONS made this decision in the light of government accounting changes introduced in 2011, not just the provisions of the 2008 Act. So I ask him again: what does he say to those housing associations that believe he has acted in bad faith, knowing this reclassification was on the cards but still willing to do the deal with them?
Greg Clark
It is quite the reverse. It shows the benefits of a voluntary agreement. If we intend, as we do, to recognise the historical voluntary nature of housing associations, we are not going use legislation to thrust them into the public sector, as the right hon. Gentleman did when he was a Minister; we are going to legislate to remove those regulations that put them temporarily in the public sector. If ever there was a vindication of the voluntary approach, rather than the clunking reaching for legislation, which Labour favours, it is in this agreement.
Several hon. Members rose—
Greg Clark
I have been speaking for more than half an hour, so I will make some progress, but I might give way later.
I pay tribute to the housing associations for having the vision and foresight to see that extending home ownership is completely consistent with their historic mission. The lazy assumption that there is a contradiction between supporting the dreams of homebuyers and ensuring new homes are built must end. I look forward to equally positive engagement with councils—indeed, I have it already—during the passage of the Bill. Their objectives are the same as mine: to ensure that as they release the equity in their high-value properties, they can make sure that more homes are built, adding to the housing supply as well as extending home ownership. At councils’ request, we have included in the Bill a flexible approach that does not require the immediate sale of particular properties, but gives us a chance—if they wish to take it—to agree with councils an approach that meets our mutual objectives.
I want to say a word about London, which has come up already in this debate. Building homes in the capital is a priority not only for my hon. Friend the Mayor but for me. Benjamin Disraeli once described London as a “roost for every bird”. Like many of his observations, it has turned out to be a prophecy—100 years later, the birds are still flocking and the roost is still growing.
Last year, new housing starts in the capital were a quarter higher than when we came to power, and nearly a third of all affordable homes achieved during the last Parliament were in London. As I have said, after we reinvigorated the right to buy for tenants in London, nearly twice as many homes were built as were sold to their tenants—but I want to do more.
The Mayor has set out the most ambitious plan for house building in the capital since the 1930s, but I want to go further so that a quarter of all the homes we build in England are built in London during the years ahead—a quarter of a million new homes over the next five years. I want the right to buy scheme to be a major part of that, and I will talk to anyone in London local government to ensure that that happens, just as it was possible to have a meeting of minds with the housing associations.
Greg Clark
I want to make some progress.
Other measures in the Bill will help. The Mayor has the power to establish development corporations and development orders to speed up the development of new housing across the city. I am absolutely determined to make sure that the Mayor has the ability to deliver the homes that London needs to maintain its position as London’s premier world city.
Greg Clark
Speaking of world cities, I shall give way to my right hon. Friend who represents two world cities, the right hon. Member for Cities of London and Westminster (Mark Field).
Mark Field
I thank my right hon. Friend; it seems I am very greedy in that regard. I greatly welcome the fact that the Secretary of State recognises the exceptionalism of our capital city. Much of the Bill makes important progress nationally, but will he also recognise that we need to tailor elements of it to the particular constraints that exist in the capital city? That is relevant to London Members of all parties.
Greg Clark
My hon. Friend makes an excellent point. I hope I have made it clear from the Dispatch Box today that the constructive approach that we found easy to accommodate with the housing associations is absolutely open to representatives of London local government—indeed, we are already having some productive conversations.
Let me deal with starter homes. During the last 20 years, the proportion of homeowners under the age of 40 has fallen by a third.
Greg Clark
I shall make some progress, if I may, as I know many Members want to speak.
What our generation has taken for granted has been slipping out of reach for many younger people. Planning policy has long recognised the need for local councils to provide for affordable housing as part of their plans. Paragraph 50 of the national planning policy framework sets out this requirement. Housing for affordable rent will always be important, but until recently public policy has had too little to say to those who would like to own their own home yet struggle to do so.
During the last three years, the Help to Buy scheme has helped 120,000 people with a deposit to buy a home, 80% of whom are first-time buyers. We need to go further locally, too, so the Bill introduces a requirement in planning law for councils to provide, through their planning functions, starter homes available to first-time buyers. During the next five years, we want to ensure that public policy recognises, as it always should have, that providing more affordable homes to buy is an important objective of policy if we are not to shut out the next generation from the opportunities that our generation has enjoyed.
Nicola Blackwood (Oxford West and Abingdon) (Con)
The Secretary of State is generous in giving way. I welcome many of the measures in the Bill, but following on from the comments about the exceptionalism of London, Oxford now has the most expensive housing compared to income in the country, yet the local area delivered zero affordable homes in 2013-14 and only 10 in 2014-15. It must be accepted that there are some significant local problems, so as the Bill progresses I ask my right hon. Friend to consider how to deal with problems in such high-cost areas.
Greg Clark
I will indeed. I have been clear about the constructive approach we intend to take, as exemplified in our dealings with housing associations. I think it is incumbent on all councils, including Labour councils, to play their part. This is an imperative for all of us in positions of political leadership to do what is needed to provide homes for the next generation.
Greg Clark
I shall give way to my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) and in a few moments to Opposition Members.
Oliver Colvile
We are talking about aspiration, but does my right hon. Friend recall that Herbert Morrison, the Housing Minister and Peter Mandelson’s grandfather, said in 1945 that his Labour Government would end up trying to
“build the Tories out of London”?
Greg Clark
He did indeed say that. Our approach is to make sure that our period of government is associated with one of the successes that every successful Conservative Government achieve, which is to house the people of our country for generations to come.
Several hon. Members rose—
Greg Clark
I think the hon. Lady will agree, on reflection, that I have already been generous in giving way to London Members.
Mr Speaker
I hope it is a genuine point of order. I say that as much in hope as in expectation, but let us hear from the hon. Lady.
Emily Thornberry
The point of order is this, Mr Speaker. The Secretary of State speaks again and again about the Bill’s importance in relation to London, but will not take any interventions from any London Members on the Opposition Benches.
Mr Speaker
The hon. Lady has, in a sense, advertised the claims of London Members, and I am sure that they will be at the forefront of the Secretary of State’s mind.
Greg Clark
The record will show, Mr Speaker, that I have been generous in giving way to London Members, including the Labour mayoral candidate. If that does not illustrate a fair approach, I do not know what does.
Greg Clark
I will not—I am going to make some progress—but the right hon. Gentleman is plucky in his endeavours.
During the last Parliament, we reformed and streamlined the planning system. We abolished more than 1,000 pages of central policy, and revoked the regional spatial strategies. Local councils have responded well to that devolution of power, as we knew they would: 82% of councils have published plans, compared with just 32% in May 2010. Since we introduced the national planning policy framework, the number of new homes planned for locally has increased by 23%, and 1,600 neighbourhood plans are in production or have been adopted.
It is right to continue in that direction of reform, which is why the Bill takes steps to simplify and speed up the process of adopting neighbourhood plans and giving them earlier force. It helps councils to galvanise development in their areas, whether through improvements in the compulsory purchase system or through the establishment of development corporations. In return, however, it tells the 18% of councils that have not yet produced a local plan that five years after the publication of the NPPF in 2012 they will have had enough time in which to do so. If plans have not been produced by then, the Government will have the power to intervene and, working with local people, help bring the process to fruition.
All Members want brownfield land to be prioritised for development. The more of it that is brought back into use, the more our countryside can be safeguarded. The Bill establishes a new strategy register for brownfield land so that councils can have an up-to-date and publicly accessible source of information about land that is suitable for housing.
Several hon. Members rose—
Greg Clark
I will give way first to my hon. Friend the Member for Ruislip, Northwood and Pinner (Mr Hurd), because he has been patient.
Mr Nick Hurd (Ruislip, Northwood and Pinner) (Con)
I thank my right hon. Friend, whose line of argument I wholly support. Starter homes, to which he referred earlier, are a very good idea, but I fear that the proposed price cap of £450,000 in London could be interpreted by developers as a price guide, thereby rendering such homes unaffordable to young people and those on low and median incomes in London. What reassurance can he give me on that point?
Greg Clark
My hon. Friend is absolutely right. It is a cap and not a guide, and we want to see starter homes with prices well below that amount, but it is right to set a maximum.
Tulip Siddiq
The Secretary of State read out a long e-mail earlier. Perhaps he would like to listen to an e-mail that I received from a single mother who is worried about the new threshold that is being applied to the “pay to stay” measure, as a result of which families such as hers, on middle incomes, will be pushed into high levels of poverty in places such as Hampstead and Kilburn.
Greg Clark
I should be happy to see that e-mail, and if the hon. Lady speaks to me after the debate, I will of course take the matter up. However, I think it only fair to expect those who are fortunate enough to be earning a decent salary not to continue to benefit from the subsidy that would otherwise be available to housing associations. The revenues raised by it will remain with housing associations so that they can build up more properties.
Kit Malthouse (North West Hampshire) (Con)
I join the Secretary of State in applauding the advent of neighbourhood plans, which have been adopted with enthusiasm by many communities in my constituency, but will he bear in mind that the one organisation that has the power to destroy his policy is the Planning Inspectorate, and will he urge it to respect the wishes of the local community and stay well away when a neighbourhood plan is being developed or is in place?
Greg Clark
I will take my hon. Friend’s injunction very seriously. Part of the Bill entrenches the rights of neighbourhoods to produce a neighbourhood plan against, as is sometimes the case, a less than enthusiastic district council. I hope we will see less and less of that, but the measures in the Bill will help.
Sir Gerald Howarth (Aldershot) (Con)
The Secretary of State may know that there is some concern among general aviation users and rural communities that they may lose small and medium-sized airfields if they are to be re-designated as brownfield sites. Under planning policy guidance 3 and planning policy statement 3, it was held that even though there was a building that had been previously been developed, the open land around it would not constitute a brownfield site. I hope he can reassure me, and those who share my interest, that airfields will not be classified as brownfield sites.
Greg Clark
I understand my hon. Friend’s concern, which he expresses very well. As I think he knows, there is a review of the status of airfields. I will ensure that his views are communicated strongly to my colleagues undertaking that review.
All Members want to see brownfield land prioritised for development. That is why the Bill establishes a new statutory register for brownfield land, so that councils can have an up-to-date and publicly accessible source of information and land for housing. We want to see planning permission given for 90% of those sites by 2020. That will be of particular benefit—this is important —to smaller firms that unfortunately, over recent years, have become fewer and fewer in the housing sector, and which, in particular, often cannot afford to endure the costs, delays and uncertainty associated with applying for planning permission.
As we build more homes and support homebuyers, we want to ensure that existing housing is managed fairly. The Bill will do something that many tenants and landlords have been calling for for many years. It will take action to crack down on the rogue landlords who can make tenants’ lives a misery and who blacken the reputation of the great majority of responsible landlords. We will establish a database of rogue landlords and letting agents to help councils to tackle problems in their area, to extend fines for serious breaches of the law and to ban prolific offenders who put the lives of their tenants in danger.
Britain has come a long way in the past five years. Halfway through what the Prime Minister has called the turnaround decade, we have gone from having the biggest budget deficit in the developed world to the prospect of a budget surplus. We have more people working than ever before in our history. We have put the housing market crash behind us and Britain is building again. We have much further to go, however. Providing the homes that our country needs is a defining challenge for all of us in this House. The Bill advances us towards that goal: it is a plan for more homes and more homeowners; a plan that the country voted for six months ago in the general election; a plan that we are now putting into effect; and a plan that offers the next generation what previous generations have been able to look forward to—a home of their own. I commend it to the House.
John Healey (Wentworth and Dearne) (Lab)
I beg to move an amendment, to leave out from “That” to the end of the Question and add:
“this House, whilst affirming its support for helping more people, particularly young people, to own their own homes and welcoming measures in the Bill that restrict the operation of rogue private landlords and letting agents, declines to give a Second Reading to the Housing and Planning Bill because the Bill will not help most people struggling to buy their own home, will mean a severe loss of affordable homes for local communities across England, will centralise significant powers in the hands of the Secretary of State and deprive councils of the capacity to meet the housing needs of their communities and local people of a proper say in the planning process, and will weaken the obligation of private developers to contribute towards affordable homes for local people.
After five years of failure on housing under Conservative Ministers, we desperately needed a Bill to give people who have been hit by the cost of housing crisis some hope that things will change. This is not that Bill.
There are some parts of the Bill that we welcome, but I have to say that they are few and far between. We welcome steps to control the worst private landlords, to help young people get their first foot in the housing market, and to speed up compulsory purchase. We aim to make those steps much stronger as the Bill goes through Parliament. However, if you are a young person or a family earning an ordinary income and trying to get on, then this is a bad Bill. If you want to buy your own home, then these so-called starter homes are a non-starter for you, and they are unaffordable to most people on average incomes. If you are a working family on modest wages in a council or housing association home, then you face your rent being hiked as a result of the Bill. If you are worried about rising rents and insecurity in your private rented home—one in four families with kids in England now brings them up in private rented accommodation—this Bill does nothing for you.
Joan Ryan
Average rents in Enfield now consume 46% of average weekly income, which is unsustainable for families. We need an increase in affordable homes. Does my right hon. Friend agree that, unless it is significantly amended, the Bill will lead to a decrease in affordable homes and do nothing to help those families?
John Healey
My right hon. Friend is right. The Bill will lead to a decrease in the number of affordable rented homes, as well as affordable homes to buy, and to a huge loss in such numbers, particularly in areas such as Enfield. She is right to point to the problem that those in private rented accommodation now face with ever-rising rents, but if she looks at the Conservative manifesto, she will not find a single word about the millions of people who face spending their whole lives in private rented accommodation. That is why the Bill does so little for them and is such a big missed opportunity.
Steve McCabe (Birmingham, Selly Oak) (Lab)
I was intrigued when I listened to the email that was read out earlier. The other night a young woman who lives in private rented accommodation came to see me. Does she not have the same aspiration to own her own home? Why can we sell off only council and housing association houses? Why is the private rented sector completely protected in the Bill?
John Healey
The real weakness in the private rented sector is that people who rent their homes from private landlords have so little protection, so few rights, and so little basic redress when their landlord does not do what they should as part of their obligations.
Chris Philp (Croydon South) (Con)
I want to respond to the right hon. Gentleman’s point about affordability. The fundamental fact is that rents and house prices will be made more affordable by an increase in supply. That is the one thing that will decrease prices, and that is at the heart of the Bill.
John Healey
The hon. Gentleman is right, but perhaps he should address his remarks to the Secretary of State. In the previous Government the Tories built the smallest number of affordable homes in this country for more than two decades—10,920 affordable homes for social rent. That compares with three times that number in the last year of the last Labour Government, which, incidentally, was when I was Housing Minister.
Mr Stewart Jackson (Peterborough) (Con)
Surely the right hon. Gentleman would concede that this time five years ago he was making the same arguments against the affordable homes regime, which has given more financial autonomy and authority to registered providers, and delivered 260,000 affordable homes.
John Healey
It is quite the contrary. I was a strong supporter of the affordable homes programme, and I negotiated with the rest of the Government an unprecedented switch of £1.5 billion from other Departments so that we could build more genuinely affordable rented homes to help bring the country through the recession. If the hon. Gentleman looks at his Government’s record, he will see that eight out of 10 of the affordable homes for social rent that they claim they have built were started and funded through decisions that I made as Labour’s last Housing Minister.
John Healey
I regret that—just as in the last five years of this Government—we did not do enough to ensure that when council homes were sold, there was enough funding to ensure that they could be replaced fully, one for one, like for like, and in the area in which they were lost. That big flaw in this Bill will become more and more exposed in every area, including in the constituencies of Conservative Members, in each of the next five years.
James Cartlidge (South Suffolk) (Con)
While the right hon. Gentleman is on the subject of regrets, let me mention Babergh, the main district in my constituency, where between 1997 and 2007 house prices increased by 200% on a sea of badly regulated mortgages, which led to an inevitable crash and a very deep recession? Does he regret the credit crunch, the excessive lending and the poor regulation that caused the affordability crisis we have today?
John Healey
There were failings in the way banks and the financial services were regulated in this country and every other developed country. What I do regret is that perhaps our Ministers listened too hard to the Conservative party, which was urging us to cut the regulation of the banking sector. What I am proud of is that when that deep economic recession hit, driven by the global banking crisis, ours was a Government prepared to step in to try to help the country through that deep recession—to help people stay in jobs, to help businesses keep going, and to help people stay in their own homes. I was proud to play a part in that with a £4 billion affordable housing programme building the affordable homes to rent and buy that people needed across the country—£4 billion in 2009-10 cut under this Government to less than two thirds of a billion pounds.
Clive Efford (Eltham) (Lab)
One of the first acts of the Conservative-Liberal coalition when it came into power was to scrap the home start scheme which had the aim of keeping us building homes, instead of seeing them stalled because of the lack of backing from the banks. Fewer homes were repossessed during the deepest recession we had had in nearly a century compared with any recession under the Tories.
John Healey
My hon. Friend and I worked very closely on this and he is right. The kick-start programme of putting public money into re-starting building on sites that were stalled because of the deep global banking crisis and recession was part of building the homes we needed and creating the jobs we needed, and because we also insisted on apprenticeships in return for that support, we got more apprenticeships across the country. In terms of the mortgage rescue scheme, my hon. Friend will remember that in the last Tory recession of 1991 they put nothing in place. They were not concerned about homeowners who were faced with the repossession of their homes, and despite a much deeper recession and much more serious economic problems, our mortgage rescue scheme meant that more than a third fewer people than in the 1991 recession had to lose their homes and lose the basis on which they were building their lives.
Andy Slaughter
Does my right hon. Friend agree that the common thread running through this Bill is an attack on social housing which will exacerbate the social cleansing the Tories are carrying out in London in particular? The so-called starter homes programme will, in the words of Shelter, help only
“those already earning high salaries who should be able to afford”
a home on the open market. A £450,000 home is not an affordable home.
John Healey
My hon. Friend anticipates one of my main criticisms of the Bill. He also anticipates one of the major criticisms of many people who have taken what Conservative Ministers said at face value, because the more they look the less they will like what they see, and the more they look the less they will see support for them and their aspirations in future.
Dawn Butler (Brent Central) (Lab)
According to the Government’s own figures, with 200 right to buys being sold in Brent and replacement starts at zero, we are already in a deficit of 200 homes. With £450,000 being 20 times the average salary in Brent, does my right hon. Friend agree that we need to start building genuinely affordable homes for less than £450,000 as soon as possible?
John Healey
My hon. Friend is right. In truth the scale and cost of the housing crisis we face in this country requires every part of the housing sector, from private house builders to housing associations to councils, to do a great deal more, and we need more homes of all types, including social rented homes. The fundamental flaw with this Bill and this Government’s plans is that they put all the chips on starter homes and on home ownership. I am going to come on to why this is such a mistake for the homes we need in the future.
Rushanara Ali (Bethnal Green and Bow) (Lab)
Is my right hon. Friend concerned, as I am, that smaller housing associations are already beginning to streamline their programmes? For example, 150 households in Tower Hamlets, mainly consisting of key workers, have been told by East Thames housing that they are on intermediate market rent schemes and must either express an interest to buy their homes within a week or face eviction within two weeks. Is not this an unforeseen consequence of the proposals? Will he ask the Government what plans they have to do something about those families?
John Healey
This is not an unforeseen consequence; it is the logical consequence of the Conservatives’ policies in the Bill. The danger of giving housing associations this gung-ho freedom and creating a dash to build is that many longstanding housing associations—although not East Thames, which is relatively new—will see this as a green light to become almost indistinguishable from private developers. The big risk is that some of them will lose sight of their social mission and that their boards, trustees and directors will simply not be strong enough to represent their tenants’ long-term interests or to ensure that we get the mix of homes we need.
Emma Reynolds (Wolverhampton North East) (Lab)
Does my right hon. Friend agree that, in contrast to the consensual approach that the Secretary of State talks about, housing associations are suffering uncertainty about their assets and have had their so-called 10-year agreement on rent disrupted? Because they rely heavily on borrowing from the markets, some of them—including the Genesis housing association—are saying that they are not going to build any more affordable homes. Others are revising down the numbers that they were going to build. This is happening as a result of this Bill.
John Healey
My hon. Friend knows as much about this as anyone in the House, and in her characteristic way she has put her finger on a fundamental problem that the Secretary of State and his Ministers are now facing. It is a problem of trust. Just three years ago, councils and housing associations were given a 10-year guarantee on the rents that would be in place for them and the properties they manage, so that they could plan their businesses’ development and maintenance. How can they now trust this Secretary of State and his Ministers to keep their word in the future? This is a serious problem for housing associations. How can they trust a voluntary deal, the terms of which are not in the Bill? They have no guarantee that the Secretary of State or his successor will not welch on the deal, or that the Chancellor of the Exchequer will not march in with his big boots to override the Secretary of State. Unless the guarantees that they are seeking as a basis for this deal are placed in the legislation, I fear the worst for them.
Emily Thornberry
Does my right hon. Friend know—has the Secretary of State perhaps told us—what will happen to the 261 National Housing Federation members that are not represented in this deal?
John Healey
This is a problem. We are not being given the details of the so-called vote taken by housing associations to enter this voluntary deal. The deal does not reflect the majority, or certainly a large number, of associations, which did not respond or were not consulted. There are serious questions for the Secretary of State about this. Despite many of the housing associations saying that they do not want to sign up to the deal—or not having said that they will do so—the Bill will nevertheless give regulators the power to enforce compliance by those housing associations on “home ownership” measures. How can we take at face value the words of Ministers about this being a voluntary deal for housing associations when behind it lies regulation that will enforce compliance? And if the right to buy is not put in place, what will happen to the tenants? The Secretary of State hardly mentioned them in his speech. How can there be a “right” to buy without the legislation to create that right? Without that legislation, and without giving tenants the ability to challenge landlords if they say no, this will not be a right to buy; it will be a right to beg to buy.
Jake Berry (Rossendale and Darwen) (Con)
The right hon. Gentleman is a former Housing Minister, so he will be aware that housing association tenants, whether secure tenants or those on affordable rent tenancies, have significant statutory protection from eviction. I hope he will take the opportunity, in response to the intervention made by the hon. Member for Bethnal Green and Bow (Rushanara Ali), to say that housing association tenants cannot be evicted with two weeks’ notice.
John Healey
I am a little surprised at that intervention, because the hon. Gentleman has had experience of serving on the Select Committee on Communities and Local Government. If he had listened harder to the point my hon. Friend made, he would know that she was talking about tenants who are on intermediate rents and who do not have the sort of protection and rights he claims they have. This is a real problem. This is a straw in the wind. This is potentially a sign of problems to come.
Ministers have spent the past Parliament blaming Labour, but they have their own track record now. The inescapable background to this Bill is that that record is one of five years of failure on every front. The Secretary of State devoted most of his speech to home ownership, but that fell each and every year in the last Parliament—each and every year since 2010. It is at its lowest level for a generation. The number of home-owning households reduced by 200,000 under that Government, whereas it increased by more than 1 million under the Labour Government before them.
Greg Clark
Does the right hon. Gentleman still take the view that the fall in home ownership is not a bad thing? That is what he said when he was Housing Minister.
John Healey
Oh dear, Madam Deputy Speaker! Is that really the best the Secretary of State can do? In 2009, when I was Labour’s Housing Minister, we were struggling with the deepest recession, following the global financial crisis. I was putting in place programmes to help lift the economy and, more importantly, to set up the mortgage rescue scheme, which helped homeowners who were struggling with their finances to stay in their homes. It will not wash to have the Secretary of State and Ministers continually coming back to what happened under Labour. They have had five years and it is their record—and on home ownership, young people have been hit the hardest. The number of young people owning their own home now has fallen by more than a fifth since 2010.
John Healey
I am not going to give way, as I have given plenty of chances and I will give way later on. I am going to make some progress now.
While family incomes have stagnated, ever-rising private rents on new lettings are up by a fifth—by £1,600 a year—since 2010. Homelessness halved under Labour, but it is up by more than a third under the Tories, and it is rising rapidly. Housing benefit costs to the taxpayer have risen by almost £4.5 billion during the past five years, despite some punishing cuts for ordinary people, such as the bedroom tax. At the same time, housing investment was slashed.
On house building, I say to the Secretary of State that the House of Commons has confirmed to me that the last Government built fewer homes than any peacetime Government since Lloyd George’s in the 1920s. [Interruption.] The Minister for Housing and Planning is chuntering away, but if he does not take this from the House of Commons, let me draw his attention to his own Department’s statistics. The Department’s live table 213 shows him that the lowest number of homes built under Labour was in 2009, when the figure was 124,980. That was at the depths, following the deepest economic crisis and recession for 100 years, but it was still higher than in 2014, the year in which the highest number of homes—117,720—were built under the Tories. They have had five years of failure on all fronts. This Bill does nothing to correct the causes of that failure, and in many areas it will make things much worse.
Let me turn now to the content of the Bill. [Interruption.] Well, I can certainly stop taking interventions from hon. Members. That is what has held me up.
John Healey
No, I will not give way, as it is clear that the hon. Gentleman’s colleagues want me to carry on.
Young people and families on ordinary incomes face a cost-of-housing crisis. The need for affordable homes has never been greater. This Bill sounds the death knell for our ability to build the affordable homes to rent and buy that are so badly needed in urban and rural areas alike. It strangles the ability and the obligation of the public and private sectors to build affordable homes.
Liz Kendall (Leicester West) (Lab)
Does my right hon. Friend agree that shared ownership is one of the most affordable options for low and middle-income families? Indeed, Shelter says that 95% of those families would be able to afford a three-bedroom home with shared ownership. Does he agree that this Bill is a huge missed opportunity for a big shake-up in this area? It is exactly the sort of thing on which we should focus if we want more people to be able to own affordable homes in future.
John Healey
My hon. Friend is absolutely right. When I talk about affordable homes to rent and to buy, I talk, in large part, about those shared ownership homes, which are often built because of obligations on developers, and often managed by housing associations, which will get choked off under this Bill. I will come to that point in a moment.
Mr Robin Walker (Worcester) (Con)
Will the right hon. Gentleman give way on that point?
John Healey
No.
Clauses 56 to 72 require the forced sell-off of affordable council homes to fund an extension of the right to buy to housing association homes. It is a power for the Chancellor to impose an annual levy on councils. Honestly, this is like some pre-Magna Carta monarch running short of cash for his exploits. There is no prospect and no plan for the proper replacement of these homes. There is no one-for-one, like-for-like replacement with new homes, and certainly not in the area where they are lost. This is unworkable and wrong, and we will oppose it.
Rachael Maskell (York Central) (Lab/Co-op)
In York, we have more than 3,000 people who have the aspiration to rent homes from the council, and yet a city such as York, which is a high-value area, will have to sell about 1,500 of those homes. Are there not perverse financial incentives in the Bill?
John Healey
My hon. Friend is absolutely right. She has just heard me describe these provisions as unworkable and wrong. She has just heard me say that we will oppose them in the Division tonight, and we will challenge them at each stage of this Bill through Parliament. I hope that she will help my colleagues and I on the Front Bench do just that. The truth is that, in many areas of the country—both rural and urban, especially in London—the council homes that are flogged off will not go to families who are struggling to buy for the first time; they will go to speculators and to buy-to-let landlords. The greater the demand for affordable housing in an area and the higher the value of the houses, the more the Chancellor will take in his annual levy.
Sadiq Khan
Does my right hon. Friend not find it remarkable that, at a time when new homes being built in inner London are being bought by investors from overseas, this Government are forcing councils to sell off family homes to those very same foreign investors? That comes at a time when Londoners’ need for affordable homes has never been greater.
John Healey
Indeed. My right hon. Friend makes a powerful point and speaks very powerfully for the capital. He speaks for the capital and for councils in areas that are led by Labour and by the Conservatives. London and places such as York, where there are high-value homes, are exactly the areas where councils will be forced to sell off houses. In Westminster, for instance, almost three quarters of council homes—nearly 9,000 of them—above the high-value threshold will have to be sold to pay for the policy not in Westminster or in London but across the country, in order to meet the Chancellor’s and the Conservative party’s manifesto pledge.
Andy Slaughter
My right hon. Friend is absolutely right. In Hammersmith, the policy applies to 50% of homes—6,500 homes. In Kensington and Chelsea, it is 97% of the stock. Those areas are the most expensive in London and areas in which the crying need for affordable houses is the greatest.
John Healey
My guess is that the Conservative leaders of Kensington and Chelsea and of Westminster have had an influence on the Conservative leadership of the Local Government Association, because it has made it clear that it opposes the plan and it has warned of the consequences
“in particular on council waiting lists, homelessness and housing benefit.”
Alongside this policy, clauses 3 to 6 overturn 25 years of planning law established by the Conservatives in 1990, with cross-party support, to require developers to help to provide affordable homes. So the very system of planning obligations that has delivered nearly 250,000 genuinely affordable homes to rent and to buy in the past decade will be set aside by Ministers imposing starter home obligations only. It is a field day for developers, and a dark day for families wanting to rent or buy an affordable home.
Mr Betts
Are not the legislative proposals on starter homes worrying for two reasons? Irrespective of the merits or otherwise of the starter homes, the provision will not add a single property to those being built over the course of this Parliament. Every property built as a starter home will replace a home that would have been built under section 106 obligations on an affordable basis. Secondly, this is an incredibly centralising measure under which central Government will dictate the details of planning permissions given on every site for which a local authority receives a planning application.
John Healey
My hon. Friend the Chair of the Select Committee is right on both counts. His Committee is conducting an inquiry into housing associations and I look forward to the report, as it will have great cross-party authority and will help this House and the other place get to grips with what the Bill means for the future.
The Chartered Institute of Housing, the independent professional experts, says that this fire sale of affordable council homes to fund the extension of the right to buy could mean the loss of 195,000 genuinely affordable social rented homes in the next five years. Although housing associations might well build more homes as they sell under right to buy, many will increasingly build for open market sale and rent. Indeed, one third already say that they will no longer build any affordable homes. For organisations with a social mission that have played a big part in providing publicly funded homes for decades, that is almost as shocking as one third of NHS hospitals saying that they are prepared only to take private patients. The Bill is a milestone moment for affordable housing in this country and it is a massive step backwards.
Let me turn to starter homes. We welcome the Government’s stated aim of making home ownership more accessible to people on ordinary incomes and to young people in particular. The drop in home ownership over the past five years to its lowest level for a generation means that this is an essential element of meeting the country’s housing needs and aspirations. But what is being done is not working, and these plans will do too little to help. We need fresh thinking, radical ideas and a much wider public debate for the future, which is why I have commissioned Peter Redfern, the chief executive of one of the country’s largest house builders, Taylor Wimpey, to undertake an independent review of the decline in home ownership, supported by an expert panel of major figures in housing and economics.
The Secretary of State must face the fact that the Government’s starter homes will simply not be affordable and will be a non-starter for families on ordinary incomes. Shelter calculates that across the country a person will need an income of £50,000 a year and a deposit of £40,000 to afford a starter home while in London they would need an income of £77,000 a year and a deposit of £98,000. That is simply out of reach for most of the middle-income working families who need help buying a home the most. Furthermore, there are no controls on the Bill to stop those who can afford to buy without help from the Government taking advantage of the scheme, so there is a big risk that the people who benefit most will be those who need the help least. As Shelter says of the starter homes programme:
“The only group it appears to help on a significant scale will be those already earning high salaries who should be able to afford on the open market without Government assistance.”
Let me say this:
“When this was first put forward prior to the election, it was clearly intended to be focused on using that land that had not already been designated for housing. The aim was for it to be a brownfield ‘exceptions’ policy...which would be a welcome addition to existing affordable and other new housing. In the policy as now proposed, starter homes are clearly to be instead of, not additional to, affordable homes to rent”.
Those are not my words but those of the previous permanent secretary of the Department for Communities and Local Government, Bob Kerslake—Lord Kerslake. The Government’s own impact assessment confirms this:
“Starter Homes will not be additional to housing supply”—
the point made by my hon. Friend the Member for Sheffield South East (Mr Betts). So before this Bill goes through the House, the Government must, as a minimum, change it to do two things. First, they must make any starter homes built through developer obligations additional to affordable homes, not a substitute. Secondly, they must put in place a guarantee and a guard against any abuse or dead-weight in the scheme.
Let me touch on planning—parts 6 and 7 of the Bill. With Ministers in a political panic about falling so far short of the new build numbers that they have pledged, this Bill gives them wide-ranging powers to impose new house building and override local community concerns and local plans. With a total of 32 new housing and planning powers for the centre, this legislation signals the end of localism. We welcome the measures to speed up the planning process where there is a clear case for doing so and where local decision making is not ignored, but there are serious concerns about some aspects of this Bill that will be shared in all parts of the House. I say that to the Housing and Planning Minister, who is chuntering again, because he might want to address them when he winds up. Those concerns are heightened, first, by the fact that there has been no consultation on the most radical of these planning proposals; and, secondly, by the fact that so much is left as open-ended powers for the Secretary of State.
Clauses 3, 4, 97, 102 and 107 introduce very far-reaching changes. [Interruption.] Instead of laughing, I suggest that the hon. Member for Croydon South (Chris Philp) look at those five clauses. These far-reaching changes must be clarified and justified by the Secretary of State, and they should be restricted as the Bill goes through Parliament if they cannot be justified. In order to do so, will the Secretary of State guarantee, as he should, that the draft regulations are available to the House when these clauses are debated in the Public Bill Committee?
The Minister for Housing and Planning (Brandon Lewis)
Will the right hon. Gentleman acknowledge that what the Bill looks to do, and what it will deliver, is to move on from the atrocious legacy that he left as Housing Minister, when he had just 88,000 home-building starts, followed by 95,000 over the last two years of the Labour Government—the lowest level since the 1920s? That is the legacy he left us with.
John Healey
No wonder the Minister’s Back Benchers look so concerned, because this bluster—this promise of big housing numbers from which the Government are falling so far short—will not wash. He has his own track record. Never mind blaming Labour, never mind the previous Parliament: five years of failure on housing under Conservative Ministers is what he has to answer for. Moreover, he did not answer the important question for this House and for the public about the proper scrutiny of this Bill—that is, whether the draft regulations for these sweeping new planning powers will be available to the Public Bill Committee. He is nodding his head, but I am not sure whether that is a yes or a no. I will give way again if he would like to give us a yes or a no on the draft regulations.
Brandon Lewis
I am wondering whether the right hon. Gentleman is going to answer the question that I intervened on him to ask, which is whether he recognises that he left a legacy of just 88,000 starts—the lowest since the 1920s.
John Healey
Eight out of 10 of the genuinely affordable rented homes that the Minister claims credit for were started under Labour—commissioned under us and paid for with a commitment of investment under us.
Mr Jackson
The shadow Minister is extremely kind to give way. May I put to him a straightforward and honest question? Without the direct intervention of the Secretary of State, how would he deal with the situation where 35% of local planning authorities have not taken their plans through the whole system, and one in five has no land supply plans for the future? That is a major supply-side issue. How would his party deal with that?
John Healey
I will send the hon. Gentleman a copy of the Lyons report, which contains exactly the answer to that problem. The problem for him now is this: even where councils and local communities have local plans in place, the Secretary of State is taking powers under this Bill to override them—even when they have been consulted upon, agreed and put in place. That should worry the hon. Gentleman.
The Bill is an extraordinary personal and political retreat for the Secretary of State. He was Mr Localism—the Minister for city deals, the Minister who signed off the radical devolution of housing finances for councils in 2012. Now he is the Minister fronting this Bill with 32 new centralising powers and a legalised cash grab from councils for the Chancellor. He was Mr Moderate Centre Ground—the Conservative Minister with political roots in the old Social Democratic party, and the Minister who managed to strike a widely welcomed balance in the national planning policy framework in 2012 between the rights of local residents and the requirement to build more homes. Now he is the Minister explaining extreme plans that will all but end new affordable housing for social rent and overturn 25 years of planning law to let house builders completely off the hook over new affordable homes and mixed developments.
The Secretary of State was Mr Decency—the well-meaning Minister whom people felt they could deal with and trust. Now he is the Minister who would have known that the Office for National Statistics reclassification of housing associations was on the cards. He ducked the questions that I put to him earlier, but he encouraged housing associations to do the “voluntary” deal anyway. He is the Minister who, as the House has seen this afternoon, has to duck and dive to evade the truth that council and housing association homes sold off under this Bill will not be replaced one for one, like for like, let alone in the local areas in which they are lost.
However, I do have some sympathy for the Secretary of State.
John Healey
At the risk of disagreeing with my hon. Friend, I do have some sympathy for the Secretary of State. The Bill is driven by the politics of the Conservative party, not the housing needs of the country, and it is not really his Bill. Like the cut to tax credits, this Bill is the Chancellor’s work, with his political fingerprints all over it. It is a Bill that makes the same mistakes as tax credits—divide-and-rule politics overriding good policy; and like tax credits, it faces a looming row on all fronts. Above all, it fails the same low and middle-income working families that the Tories claim they will represent. It will lead to a huge loss of affordable homes to rent and buy, and be a huge let-down to those who believed the Tory election pledges. The Bill will prove to be bad policy and bad politics. It will be a slow-burn problem all the way to 2020, and we will oppose it in the Lobby tonight.
Several hon. Members rose—
Madam Deputy Speaker (Natascha Engel)
Order. There are 55 Members who wish to speak in the debate. I will start with a time limit of five minutes on all Back-Bench speeches. That does not include the SNP spokesperson, of course. If Members could keep interventions to a minimum if they wish to speak, we might get through the list. The more interventions there are, the less likely we are to get through the list.
Dame Angela Watkinson (Hornchurch and Upminster) (Con)
Thank you, Madam Deputy Speaker. I shall be quick.
This Bill has many excellent provisions that will improve the availability, quality and accessibility of housing, but I shall concentrate my remarks on a narrow aspect of its provisions, as set out in clause 22. This clause, in chapter 3, relates to rogue landlords who break the law, treat their tenants badly and do not maintain their properties in a habitable condition. The clause states that the
“Secretary of State must establish and operate a database of rogue landlords”,
and that it will
“give local housing authorities in England responsibility for maintaining the content of the database.”
There is no doubt that such information is necessary for the protection of tenants and the reputation of private sector landlords in general. It would be a useful tool for local authorities in carrying out their housing and other functions. However, as local authorities do not know which properties in their areas are rented privately, or who or where the landlords are, it would be difficult to compile such a register, except after the event when a rogue landlord has been brought to their attention.
A simple, low-cost method of acquiring the necessary information would be to add a question to council tax registration forms seeking information about the owner of the property. That is proposed in my private Member’s Bill, the Local Government Finance (Tenure Information) Bill. The proposal would facilitate the implementation of clause 22 by providing a database of privately rented properties and landlords from which to root out the unscrupulous ones. The information would be readily available for the effective enforcement of existing regulations affecting the private rented sector and the taxation of landlords. It would help with housing-related issues, such as investigating illegal sub-letting, unregulated houses in multiple occupation and benefit fraud, as well as planning enforcement and public health issues. It would help the police when criminal offences are committed, and Her Majesty’s Revenue and Customs when rental income is not being declared for taxation purposes.
Councils may add such a question already, but they are not required to do so. In the past, a voluntary national register of landlords has been considered. I suggest that that would not work, because only the good landlords would comply, even if there are sanctions for non-registration. A register of good landlords would leave us no further forward in finding the minority of landlords who are operating under the radar and causing misery to their tenants. Registration costs would inevitably be passed on to tenants. In 2009, an impact assessment of a full licensing scheme for landlords found that it would be onerous, difficult and costly. Where licences were used, the results were patchy.
With the private rented sector increasing in size, it is important to seek a workable solution to offer tenants greater protection against rogue landlords. Over 4 million households were renting privately in 2013-14. While the majority of private sector tenants are satisfied with their homes, driving up standards can progress only if privately rented homes and their landlords are identified. An estimated one third of privately rented homes do not meet decent homes criteria, and one in six present a threat to health or safety. Conditions such as damp, unsafe electrical and gas appliances, lack of insulation, leaky plumbing, faulty fire alarms and vermin are all examples of how some properties do not meet decent homes criteria.
Local authorities lack the capacity or resources to inspect and enforce effectively and widely on issues relating to the private rented sector. Readily available information on the owners of privately rented properties in their areas would enable local authorities to target their finite resources on troublesome tenanted addresses via the Land Registry. The register required by clause 22 has been welcomed by Citizens Advice and the Residential Landlords Association, which is rightly jealous of its good reputation. The simplest method of collecting such information about the tenure of properties and the identity of rogue landlords would be by putting an additional question on council tax registration forms. I shall table an amendment to the Bill to that effect, and I hope it will find favour as the Bill progresses.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Thank you, Madam Deputy Speaker, for allowing me to participate in this debate, which is the first to be classified under English votes for English laws. Further to the points of order raised by my hon. Friends earlier, I want to draw hon. Members’ attention to a quote in a Library briefing paper. The quote is from a debt management expert, who said that having a lower asset base could see some housing associations “pushed towards insolvency”. Given that some housing associations work on a cross-border basis, it is clear that the Bill may have some indirect consequences for Scotland. I am not challenging the certification, but I wanted to draw to hon. Members’ attention to the fact that classification under EVEL has complications.
My contribution will look at the different approaches of the Scottish Government and the UK Government, which I hope will benefit Members on both sides of the House. A key omission from the Bill is that it does nothing proactively to tackle homelessness. Scotland has brought in what has been accepted as world-leading legislation on homelessness. Since 2012, anybody in Scotland who has been classed as “unintentionally homeless” has had a legal right to be housed. As a former councillor, I have seen the benefits of that legislation and the number of people who have been rehoused under it over the years. That shows that that legislation is working.
A key aspect of the Bill is the right to buy for social housing. That subject will clearly form a lot of today’s debate. Hon. Members in this House need to have a long think about what is in front of them. Last week when I contributed to the tax credits debate, I commented that right to buy is a taxpayer subsidy. Later, a Government Member suggested that the SNP was against home ownership. That could not be further from the truth. In Scotland, the SNP Government have had a help to buy scheme that has helped up to 14,000 buyers enter the private housing market. At the same time, we have been funding social housing and new council housing. Home ownership and social housing are therefore not mutually exclusive. Sometimes, the debate in this place is too polarised and makes out that people are either for home ownership or against it. That is not the way it should be.
John Healey
The hon. Gentleman has given a list of the SNP Government’s record, but how does he explain the fact that after eight years of that Government, more than 150,000 people are still on council waiting lists and half of all homes in Scotland still fall short of the official quality standards?
Alan Brown
The right hon. Gentleman is wrong about the quality standard. In my local authority, all houses bar a few that have exemptions meet the quality standard in Scotland.
In Scotland, we have built nearly 6,000 council houses in the same period that Labour built six. The records of the SNP and Labour are incomparable. There might still be people on council house waiting lists, but by building many more houses than Labour did, we are clearly moving in the right direction to tackle that.
In this Parliament, 30,000 affordable homes will have been built in Scotland under the SNP Government. We are aiming to increase that to 50,000 in the next term. We are certainly doing our best to tackle housing waiting lists.
In my opinion, right to buy has had its time. In Scotland, the SNP Government have legislated to take it away for council houses. That has clearly had an impact on waiting lists in Scotland, which the shadow Minister talked about, because it allows greater stock retention.
Government Members have been shouting about home ownership. As a point of interest, my parents bought their council house under right to buy, so I know that people have benefited from it and I have seen what happens. People who buy their homes take pride in them. I know that that has happened over the years. The policy was right at the time, but we now see the problems that have arisen. Initially, all the money went to central Government and was not used for stock replacement. That is why we have the problems that we have today.
In many areas, large family houses have all but disappeared from the stock because of the right to buy. As we have heard, it has led to an increase in private renting to compensate for the lack of social housing. That drives up housing benefit costs. It is therefore counterproductive to extend the right to buy to social landlords, because it will keep that vicious circle going.
A study by Glasgow University estimated that the right to buy cost £3 million a year in Renfrewshire in extra housing benefit. The same is true in England, where up to 40% of the flats that were sold under right to buy are now in the buy-to-let market. This is a UK-wide issue and it will only get worse with the proposed extension of the right to buy to social housing.
Another unintended consequence of the previous right-to-buy policy is that couples who bought their houses many years ago, including my parents, might end up living in a house that is unsuitable for their needs when they are elderly. There is a risk that people will be trapped in their houses because not enough social housing is available for them to move to, or because priority for those new council houses that are being built is given to people who already live in council houses so that there is a through flow. Houses are not always suitable for the needs of the people who stay in them.
As a councillor, I have also seen unintended consequences relating to the common repairs to, and upgrades of, tenement properties. When people buy such properties, the title deeds say that they are responsible for shared repairs and other upgrades. That all seems fine when they sign on the dotted line, but people often object when councils want to do work to the property. That is a particularly big problem with buy-to-let landlords who take over properties, because all they want is a return on their money. They do not want to shell out any more money than they need to, so they obstruct upgrades to properties. Some housing schemes whose properties require external rendering are left with a patchwork-quilt effect because private owners and buy-to-let landlords will not pay the money for the upgrades.
I have highlighted some of the problems that I have seen as a result of the right to buy council stock. Why would we want to repeat the exercise with social landlords? The Secretary of State keeps mentioning one-for-one replacement, but that proposal is as flawed as the maths accompanying the policy.
It is estimated that the right-to-buy discount payable to housing associations will be £10 billion to £12 billion. This is another area where the debate can be too polarised. The Government propose to cut £12 billion from the welfare budget—we have had a debate about tax credits—yet at the same time they want to make available a £10 billion to £12 billion taxpayer subsidy for people to buy the homes in which they already live. I ask Members to think of the difference that money would make if it were put directly into house building. It would create more homes, help drive down the cost of private renting and create more jobs. Those homes would also be more energy efficient, which would help hard-pressed families make their budgets go further.
On the maths accompanying the policy, the property agent Savills reckons that the Government have overestimated the average house price value and, therefore, the income it will generate. Councils therefore face the risk of having to pay more money than they will recover.
It is also a flaw that there is no guideline on how the one-for-one replacement will be managed in terms of house type, and there is no absolute requirement to provide a replacement in the same area. The housing policies of councils and local housing associations should be based on need and demand, but under the Bill they will be target driven and replacements might not be built on a like-for-like basis. Family homes could be sold off and there is a risk that decisions will be fudged and that they will be replaced by smaller units. That does not do anything for long-term housing need.
Dawn Butler
Westminster City Council, which is next door to the Prime Minister’s favourite borough, has a very wise leader who states that right to buy could wipe out swathes of social housing and that because of this Bill
“we will not be able to house the people that we need to house.”
Alan Brown
That is the risk I am highlighting, so I completely agree with that intervention.
Despite the Government’s bluster, if we look at the number of new build starts compared with the number of right-to-buy sales, we will see that their track record shows that one-for-one replacement has not worked. The SNP’s record in Scotland shows that completion rates for both private and social housing are much higher than those for the UK as a whole.
As a councillor, I have seen the benefits of targeted council house building in a locally led strategy. I have seen brownfield regeneration, town centre living to encourage vibrancy on their peripheries and—this is important to me—special needs housing and housing designed for the elderly ambulant. Such house building can be life changing for the new tenants, and it is heart-warming to hear the stories. We can talk about statistics and targets, but behind them there are real people and families who need houses. That is the most important thing. Another indirect consequence of a better housing strategy would be the health benefits—less bed-blocking ultimately means NHS savings—while more energy-efficient homes lead to healthier, wealthier families.
As I said, social housing will reduce housing benefit costs, so we would greatly appreciate it if the Minister considered devolving housing benefit in the Scotland Bill, as it would give the Scottish Government the risk and the reward in terms of house building. If we built more houses, we could reduce housing benefit and get more money back to recirculate. I would appreciate it, therefore, if he had a word with the Secretary of State for Scotland.
It is ironic that housing associations were originally seen as an ideal mechanism for keeping debt off the national balance sheet. We have already mentioned the ONS reclassification and the fact that this could become public debt. The Conservatives have argued that we need to reduce the debt in order to save future generations—it is the argument for cutting welfare—so it seems strange that a central plank of their strategy is to use taxpayers’ money to help people to buy their properties while forcing additional lending on to councils so that they can build replacement homes. Some of the economics do not add up, so I ask the Government to think again.
Zac Goldsmith (Richmond Park) (Con)
As Mayor, my hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) has overseen the building of 100,000 affordable homes in London, which is 25,000 more than his predecessor.
Zac Goldsmith
I will not give way, because we all have very little time. I will perhaps give way later.
As my hon. Friend will no doubt acknowledge when he speaks later, the gap between supply and demand remains very wide, and without radical action it will grow wider still, further pricing Londoners out of their own city. Few people doubt that London is the greatest city on earth—it is why so many people want to come here—but that success, much of it down to his great work, is compounding—
Zac Goldsmith
I feel obliged to take an intervention from the right hon. Gentleman.
Sadiq Khan
Does the hon. Gentleman think the Mayor has made any errors on housing over the last seven years?
Zac Goldsmith
He has overseen the building of 100,000 affordable homes, which is 25,000 more than his predecessor. That is his record. What is more, he has laid the groundwork for a much more ambitious project, as I shall briefly explain later.
As a result of London’s success, our population is expected to grow by 1.5 million over the next 15 years—that is 1.5 million people who will need homes in this city. Already, the average first-time home costs £412,000, which is 12 times the average inner-London wage. Closing the gap between supply and demand, therefore, is the absolute priority, but we know we can do it. We have the tools: the planning system, the finance and the land. There are vast swathes of public sector brownfield land that we can unlock. Transport for London alone owns the equivalent of 16 Hyde parks. We will have to unlock that land to build the homes Londoners need. We also have an opportunity to redevelop existing sites—for example, 1950s estates that are at the end of their lives but for which the opportunities are vast, as long as we get the consent of the residents.
The Bill is just part of the story, and no one here pretends that it is the solution to London’s housing crisis, but it will give many people a chance to own their own home. It will give 440,000 housing association tenants in London the right to buy. One in 10 London families will have the right to purchase their home at a discount funded through the sale of high-value council homes.
So, in principle, I strongly support the Bill. I stood, as did all my hon. Friends, on a manifesto that committed us to help introduce it. There is no doubt, however—I believe that the Government Front-Bench team accept this—that the Bill needs amending. Council homes in London are far more valuable than they are elsewhere, and without a change we will see a disproportionate flow of resources out of London. I want to amend the Bill to guarantee that it works for Londoners.
We should extend the right to buy, but at the same time we must gain a significant number of low-cost homes, which we know is possible. The amendment that I intend to table after today’s debate will ask for a binding guarantee that London will see a net gain in affordable housing as a consequence of this policy—a guarantee that London will see, in addition to the replaced housing association homes, at least two low-cost homes built for every single high-value home sold. That is the intent behind the amendment, and I believe it will gain the support of every single Back-Bench Conservative colleague representing a London constituency. I strongly urge the Government to work with us to help us deliver the commitments we need.
As well as pressing for this binding commitment, I want to pay tribute to my right hon. Friend the Secretary of State for securing a voluntary deal with the housing associations. Right to buy will channel a significant amount of cash into London’s housing associations. Indeed, Standard & Poor’s has said that its credit ratings are likely to improve.
Last week, I wrote to David Montague, chief executive of g15, which represents London’s largest associations. I asked him how we can work together to turn that cash into new low-cost homes. It is very clear from his response that g15 is well up for that challenge. In a note to me last Friday, it has committed to more than doubling its investment programme, as long as the next Mayor works with the current Government and ensures that the brownfield land I mentioned earlier is freed up. If I am successful in the election for Mayor in May, I absolutely make that commitment to do so, working on the legacy of my hon. Friend the Member for Uxbridge and South Ruislip.
If we get this right, London will see a significant net gain in affordable homes from this policy, with two low-cost homes built for every one high-value council house sold, plus a commitment from London’s housing associations to more than replace every home sold under right to buy. That is a deal that even the Opposition could support, if they could just briefly resist the temptation to wave flags during this debate.
I am conscious of the time limits, so I shall be brief on the further measures contained in the Bill. I strongly welcome the Government’s commitment to starter homes, which will no doubt help a lot of people. It needs to work for Londoners, however, and a 20% discount on a £450,000 home in London is still out of reach for many people. The bottom line is that we are going to have to use every single available lever to deliver affordable homes at all incomes.
Finally, the aspiration of homeownership must not blind us to the difficulties of the millions of people who are renting, so I warmly welcome plans to crack down on rogue landlords. This will complement the current Mayor’s London rental standards, and is yet another example of a Conservative Government working with a Conservative Mayor and delivering for Londoners.
Mr Clive Betts (Sheffield South East) (Lab)
I shall begin with the aspects of the Bill with which I agree. There are some measures on the private rented sector that I can support, not least because the proposals on fixed penalty notices are an easier way to deal with landlords who are misbehaving in certain circumstances, and the rent repayment orders were recommendations of the Select Committee, as set out in its report during the last Parliament.
I am sorry that the Government have not gone further in dealing with the continuing problem of the very short tenures that most people in the private rented sector have or with the problem of the lack of resources of local authorities. The Government ought to consider allowing local authorities to keep fines that are levied on landlords, so as to help pay the cost of prosecuting those landlords who behave badly and bring the whole sector into disrepute. I hope that the Government will consider placing in the Bill a measure to ensure five-yearly checks on electrical safety in homes. The Government could achieve that very easily and it would help greatly.
On affordable housing, my great worry about the Bill is that if we are to achieve the 200,000 homes a year that the Government aspire to building—or the 250,000-plus homes that we really need—it can be done only through a serious long-term plan to build social housing for rent in this country. There has been a long-term decline in house building because that whole sector has diminished. What concerns me is that measures in the Bill will lead to the building of fewer houses at rents that people can afford, and that by the end of the current Parliament in 2020 there will be fewer homes to rent than there were in 2015.
Let us consider some of those measures. First, let us consider the right to buy. It is possible that some housing associations, if they chose—and it will be a choice—could replace properties on a like-for-like basis in their localities, although that would depend very much on their circumstances, but no information that I have seen, from Ministers or from anyone else, has persuaded me that local authorities have any chance of replacing the properties that they will have to sell off on a like-for-like basis in their localities. I am sure that the Select Committee will explore that issue further. It will be very interesting if Ministers are able to provide the Committee with evidence.
The starter home measures also present problems and challenges, because they do not propose the building of a single new home. Every starter home will be built in place of the affordable home that would otherwise be built under the current section 106 arrangements. In the last 10 years, nearly a quarter of a million homes have been built for housing associations as a result of section 106 agreements, but no more will be built during this Parliament. There will be starter homes costing up to £450,000, but a whole range of homes for affordable rents will not now be built.
Kevin Hollinrake (Thirsk and Malton) (Con)
Will the hon. Gentleman give way?
Kevin Hollinrake
What does the hon. Gentleman make of the comments of the chief executive of the National Housing Federation, who has said that
“our offer to the government will see an increase in the number of new homes built”
and will
“ease pressure in all parts of the market”?
Mr Betts
David Orr, who gave evidence to the Select Committee the other day, said that he believed that more homes would be built as a result of the right-to-buy proposals, but also said that the federation did not support the proposals to force a sell-off of council homes to pay for them. He made that very clear. The federation also came out very strongly against the changes in rent levels which the Chancellor introduced in his Budget, and which will cause significant reductions in the number of homes that can be built by both local authorities and housing associations. As a result of these measures, Sheffield county council will lose £27 million of revenue from its housing account and South Yorkshire housing association will lose £7 million over the current Parliament.
The other day, in the Chamber, I congratulated the Secretary of State on his decentralisation proposals, but another key problem with the Bill is that it is very centralist. The starter homes programme involves micromanaged section 106 agreements. Local authorities currently do a deal on each individual site, but decisions on what homes should be built on each site will now be imposed from the centre. Moreover, planning permissions for building on brownfield sites will be given automatically, and local authorities will not have the right to negotiate infrastructure deals as part of those permissions. In the case of major infrastructure projects, it will be possible for housing to be approved with no local consent whatsoever. The Royal Town Planning Institute has said that
“the increase in the powers of Whitehall through these measures is extraordinary.”
Control of total rents, control of the rents paid by so-called high-income families, and controls forcing local authorities to sell off properties will mean that the housing revenue account—a stand-alone account that was introduced by the Secretary of State when he was a junior Minister a few years ago—is now very firmly in the Chancellor’s pocket.
Let me make two final points. Can anyone seriously believe that homes costing £450,000 are affordable, or that the income of a family in which two members are working hard and earning the living wage can be described as high, as it is in the Bill? Those two points alone show how out of touch the Government are, and how irrelevant these measures are to the real problems that face most people in this country.
Mr Nick Hurd (Ruislip, Northwood and Pinner) (Con)
It is a huge pleasure to follow my hon. Friend the Member for Richmond Park (Zac Goldsmith), who I dearly hope will be the next Mayor of London and will have the chance to build on the legacy of my parliamentary neighbour, my hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson).
I rise to seek reassurance on one central point. I support the principle of the Bill. It is designed to make it easier for people to own their home, to build their home and to have better protection from rogue landlords. It will have my support on Second Reading. However, I have a concern, which I would like those on the Government Front Bench to respond to, in relation to whether the Bill will lead to an increase in the supply of affordable homes in London across all tenures. As my hon. Friend the Member for Richmond Park said, that is the No. 1 political challenge we face in London.
I am a London MP. I represent an area where it is now almost impossible for someone to rent a one-bedroom flat for less than £1,000 a month, or to buy it for less than £250,000. Despite the best efforts of Hillingdon Council, which is as determined and as creative as any, most of what we see built in the area is what the market can pay rather than what the community needs, which is homes that young people and key workers can afford. The clear priority, therefore, is to increase the stock of affordable housing across all tenures. This goes to the heart of the kind of London that we should want to see and hand on to future generations. It must be a city in which people of all ages and incomes can live together in neighbourhoods that are not segregated by wealth, class or nationality.
Mr Hurd
I do not have time to give way, as much as I love the hon. Lady.
As the Secretary of State was very clear in saying, successive Governments of all colours have failed the capital, but none more so than the 13 years under new Labour. The shadow Minister was good enough to express regret—no more—that in those 13 years we lost 400,000 units of affordable housing stock. That is the hole we are having to climb out off, and the Mayor of London deserves enormous credit for starting that process. This is the central prism through which I look at the Bill: will it contribute to the biggest political challenge of increasing the supply of affordable homes? I have to say that I have not yet received a clear enough answer to that question.
There are considerable grounds for optimism. The Secretary of State himself has made it clear today that he is passionate about putting London at the front of the surge in new build that we will see over the next five years. I believe him when he talks about one-for-one replacement. I see huge potential in the voluntary deal he has so cleverly struck with housing associations, but let us push those housing associations to be more ambitious. It is called right to buy, but for them it should also be sell to build. They have the capacity to do much better than one for one.
Mr Hurd
I do not have any time to give way to my hon. Friend.
We should be pushing them to do better than one to one; we should be pushing and encouraging them to look at two for one.
I need reassurance on how money will be recycled from the sale of high-value council assets. I take great encouragement that the Government have overseen an escalation in the replacement ratios that had fallen and lagged so shamefully under Labour. There is still a question, however, about whether there is enough money to go around, given that most properties will be in London, to fund what we want to do: the discounts on right to buy, brownfield regeneration, and the replacement of the housing stock on an ambitious level. My original position was the same as that of the current Mayor of London, which is to argue for a ring-fencing of proceeds. I recognise, however, that that will raise substantial question marks about the integrity and validity of the policy. I support wholeheartedly the change, put forward by my hon. Friend the Member for Richmond Park, to make it clearer that the Bill will do what is needed to meet the big political challenge in London: to increase the supply of affordable homes and make this city the place that we continue to love to live in and work in.
Sadiq Khan (Tooting) (Lab)
It is a pleasure to follow the hon. Member for Ruislip, Northwood and Pinner (Mr Hurd), who, for the most part, made a very compelling speech. I rise to speak in an absolutely crucial debate for many Londoners. I commend the speeches from my right hon. Friend the Member for Wentworth and Dearne (John Healey) on the Opposition Front Bench, and from my hon. Friend the Member for Sheffield South East (Mr Betts), the Chair of the Communities and Local Government Committee.
There is a housing crisis in London, with a growing shortage of affordable homes to buy and rent. Precious public services are struggling to attract and retain workers, and the city’s businesses cite housing as their single biggest concern. Many Londoners are in distress over housing due to their inability to make any progress on a council housing waiting list or because of poor quality accommodation.
One of the biggest issues is the rising cost of housing to rent and buy, and, for many Londoners, buying their own home is simply a pipe dream. The average deposit to buy a place—not the purchase price—is now £100,000. That is three times the median salary of someone in inner London, and four times the salary of someone in outer London. As a result, more and more Londoners have no choice but to rent, yet rents in London have now reached an all-time high of £1,300. Rents are rising year on year, and have risen by 38% since 2010. Housing benefit spend—essentially, the taxpayer making up the shortfall between what Londoners can afford to pay and what the market is charging—increased in London from £5.3 billion in 2010 to £6.1 billion now. Add to that the Government’s welfare changes, the bedroom tax, cuts to tax credits and the lowering of the welfare cap, and that pretty toxic combination is hollowing out many inner-London boroughs. That is putting enormous strain on the social fabric of London, and increasing pressure on housing, transport and public services in many of London’s outer suburbs.
Dawn Butler
Does my right hon. Friend agree with the senior Tory who says that the right to buy will wipe out swathes of social housing?
Sadiq Khan
The Conservative leader of Westminster Council was speaking on behalf of Londoners who care about London’s social fabric and are worried about the hollowing out of our city—I wish that more Conservative Members would take up that debate. With the Bill, the Government have a real opportunity to start the process of solving this crisis, but they have flunked it. Instead of solutions, their proposals will make the problems even worse.
Let me turn to the extension of the right to buy to housing association tenants. Over recent years there has been no like-for-like replacement of affordable homes sold under the existing right-to-buy scheme. The Secretary of State could not dispute figures from his own Department that I put to him, which show that in London since 2012, only one in seven council homes sold have been replaced. How can anyone believe that it will be different this time? There is nothing in the Bill to guarantee that money must be reinvested in the local area, replacing like-for-like sold-off homes.
Some housing associations are relaxed about selling off homes in inner London and replacing them with units in cheaper parts of outer London or even further afield. That damages London’s social mix, accelerating the exodus of poorer people out of our great city, and making the affordability crisis even worse. To make matters worse, the only way the Government could fund this policy is by forcing councils to sell off the most expensive homes. In London, that means losing substantial amounts of affordable family homes, and the city’s low and middle-income families will be squeezed out to fund the sell-off of housing association homes nationwide.
Together with colleagues from across the House who want to join me, I will be fighting to retain the money from housing association and council property sales in London for Londoners. There must also be provision for like-for-like replacements in the same areas as where the properties are sold
It is not as if the Government are planning a big boost in truly affordable homes. They have put all their eggs in the starter home basket, but in London starter homes simply will not help struggling first-time buyers. With starter homes capped at a cost of £450,000, someone with a 25% deposit—that, by the way, is £98,000—would need an income of £77,000 to afford one. The Secretary of State talks about aspiration, but who exactly is he talking about?
This Bill is a missed opportunity. It will not fix London’s housing crisis; in fact it will make it worse. It will not deliver the genuinely affordable homes Londoners need to buy or rent. It will not help the councils and the Mayor to start to build the homes Londoners desperately need. It will not rein in spiralling rent rises for those in the private sector. It will not end the scandal of the homelessness problem.
Next May’s mayoral election is a referendum on the capital’s housing crisis. This Bill reinforces why that referendum cannot come soon enough.
Mr Richard Bacon (South Norfolk) (Con)
It is a pleasure to follow the right hon. Member for Tooting (Sadiq Khan), although I disagree with one of the last things he said: that this Government are putting all their eggs in the starter home basket. With respect, no they are not. The most exciting part of this Bill—one alluded to by my hon. Friend the Member for Ruislip, Northwood and Pinner (Mr Hurd), but otherwise not mentioned at all by any of the six speakers in this debate, or the eight including the two Front Benchers—is chapter 2 on self-build and custom house building. The Bill amends the Self-build and Custom Housebuilding Act 2015, which was my private Member’s Bill that I steered through Parliament and became law on 26 March. I have listened for several years now in this House to debates in which people from different sides have taken their part and shouted statistics at each other. I find it very frustrating, because the system has failed our constituents for at least 30 to 40 years, if not longer.
No one talks about a national chair crisis or a national shoe service to solve the problem we have with our shoes. No one says we need a help-to-sit campaign funded by Government so that we have enough chairs. That is because the supply of chairs and shoes rises to meet demand. The problem for 30 or 40 years—if not longer—is that the supply of houses has not risen to meet demand, and that is the problem we have to solve.
Some 1.2% of the land area of this country is taken up with houses. If we add in gardens, it is probably slightly over 2%. We could double the number of houses in this country, which no one is suggesting doing, and still 97.6% of the land area of the country would not be taken up houses.
Of the first six speakers from the Back Benches, four represent London constituencies. One might be forgiven for thinking that this is a debate about London, and no one denies that there are acute and special problems in London, but of the 65 million people who live in the United Kingdom, 57 million do not live in London and they also need to have their voice heard in this debate.
Richard Graham
Since my hon. Friend encouraged us who do not represent London to offer up our voices, may I point out to him that, just as he has his problems in his part of the country, we in Gloucester have ours, with not a single new unit of social housing built by Gloucester City Homes or the city council during the entire 13 years of the previous Labour Government?
Mr Bacon
That is a very disappointing statistic, but it reflects the central problem. We either have an assumption, as apparently many Opposition Members do, that housing has to be provided in a top-down way by large housing associations, often with chief executives on bloated salaries in excess of £300,000, or we assume that somehow the volume house builders will make up the difference. There is a wide-eyed astonishment among many people that volume house builders construct housing when, and only when, it is profitable for them to do so. What we actually need is to break open the choice for people—break open the supply if someone wants to get a piece of land and build their own house.
As anyone who is a subscriber to Homebuilding & Renovating magazine will know—and frankly everyone should be—the fact is that people can construct a very decent house, to very high thermal performance standards, which will cost nothing to heat, for £140,000 to £160,000.
Oliver Colvile
Does my hon. Friend agree that there are too few volume house builders and we need to have significantly more competition in the market?
Mr Bacon
Yes, there are far too few volume house builders. What we actually need is proper choice. I do not blame volume house builders for building when it is profitable to do so and not otherwise, but they can artificially restrict the supply of land and acquisition possibilities for others by not even buying the land, but by buying an option on the land. If they pay a farmer in my constituency £4,000 a year for 10 years for an option to buy the land, they can keep it off the market. The farmer can get 3.5 tonnes of winter barley or wheat off it so he is happy, and he gets the option money as well.
There is one thing that does not happen, however. A lady emailed me last year when my Bill was going through to say that she had spent five years looking for a piece of land, and that she was no further forward than she had been on the day she started. It seems as though, in this country, it will never be a middle-aged rite of passage to get a piece of land and build one’s own house, as it is in Germany.
Mr Bacon
I cannot give way. I am so sorry; I would love to, but there is no more time.
Germany has 20 million more people than us and one third of its land area is covered by forest, yet anyone who wants to buy a piece of land there can go along to their local council and say, “I would like a piece of land, please.” The reply will be, “Would you like a big one or a small one?” The smaller ones are disproportionately slightly subsidised by the big ones, which are disproportionately slightly more expensive. There is an equilibrium between the supply of land and those who want to buy it, so anyone can get a piece of land.
I have mentioned the fact that it is possible to construct a house for between £140,000 and £160,000. Through the community land trusts scheme, it is possible to remove from the equation the actual value of the land. There are many landowners who would happily come forward to help in rural areas such as mine in Norfolk if they thought that the land was not going to be used by a volume house builder to build on spec and then sell. The very fact that people use the word “spec”—as in “speculative”—is quite extraordinary. I was sitting next to a representative of a major house builder at a dinner recently, and I said, “We don’t talk about spec shoes or spec chairs. The very word ‘spec’ is pejorative. Why do you use it? Why aren’t you loved? You provide the dwelling places where people live their lives, rear their children, conceive their children and bring about the next generation. Given what you do, why are you not loved? Why do you call it ‘spec’?” He looked at me as though I was mad and said, “Well, I suppose we always have.”
We need a revolution in how we do this, and my simple plan is to put the customer at the centre of the equation. I know that that is old-fashioned and traditional. It might even sound simple, but it works for shoes, it works for chairs and it works for most things. There are many good measures in the Bill that will help to promote supply, including the registration of brownfield land, the reduction of uncertainty in the planning process, the simplification of compulsory purchases and the speeding up of neighbourhood planning.
Many of those measures are welcome, but the most welcome aspect of the Bill is the opportunity provided in chapter 2 to make it easier for a person to get a piece of land and build a house on it. That could affect everyone. It could have huge benefits for social cohesion, for skills and even for the prevention of reoffending. Stella Clarke in the Community Self-Build Agency in Bristol is getting young black men who were rioting 20 years ago to literally build their own stake in the community. We need a revolution in this country, and it is this Government who are going to bring it about.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
I am delighted to follow the hon. Member for South Norfolk (Mr Bacon). Housing is the biggest issue in my constituency, as it is in many others. I want to focus on two points. First, I shall deal with the elements that I believe to be missing from the Bill; then I shall cover the elements of concern.
There is nothing in the Bill on leasehold reform. The hon. Member for Worthing West (Sir Peter Bottomley) has been leading a campaign on this issue for some time. The Leasehold Knowledge Partnership has supplied a briefing outlining the key elements missing from the Bill. It states:
“The law commission report proposing the replacement of forfeiture with a forced sale through the termination of a tenancy has been with government since 2006.”
It goes on:
“The government is aware that many leasehold landlords are delaying or stopping the ‘right to manage’ on very minor technical grounds”.
It also states:
“The basic right for leaseholders to form a Recognised Tenants Association is set at a needlessly high level”.
Furthermore, the so-called informal disputes tribunal procedures are far from informal or inexpensive.
The Chairman of the Select Committee, my hon. Friend the Member for Sheffield South East (Mr Betts) mentioned electrical safety checks. A briefing from Electrical Safety First states:
“The Housing Bill…does not include anything on protecting tenants in the private rented sector from electrical accidents caused by unchecked and faulty electrical installations. Electrical safety in the private rented sector has been left behind other important safety areas, such as gas, carbon monoxide and smoke alarms.”
As my hon. Friend said, the Government have missed the opportunity to introduce regulations as part of this legislation to ensure mandatory five-year electrical safety checks.
I have already raised with the Minister the question of registered social landlord ballot transfers from councils to housing associations, and the fact that there is no reversal provision. A housing association might make an offer to tenants and they might vote yes to stop the transfer, but if the offer falls through, the tenants are stuck with that housing association ad infinitum. There should be an opportunity at some point, perhaps after five or 10 years, for tenants to be re-balloted if they so wish, to give them a chance to change their housing provider or to go back to the council.
I shall speak briefly about elements of concern. Like many others who have spoken today, I find the deficiencies in the proposals on the right to buy a matter of huge concern. I support the principle of the right to buy. However, the House of Commons Library briefing paper states:
“The ultimate aim is that replacement will be achieved within two years of sale, but the default position is that associations will achieve replacement within three years. Replacement will be at national level”.
Replacement will not be at local level, as many colleagues have pointed out. The Library briefing goes on to say that local authorities would be required
“to manage their housing assets more efficiently, with the most expensive properties sold off and replaced as they fall vacant.”
In Tower Hamlets, there is not much property that is not at the higher value end. Those are large family homes, and when they go, families in east London will not be able to afford them. According to the briefing, the Local Government Association
“has argued that the extension of Right to Buy should not be funded by forcing councils to sell off their homes.”
Another aspect that has been highlighted locally is that housing associations are having to change the way in which they work. There have been reports of employment training programmes, youth services initiatives and antisocial behaviour efforts being subjected to review, reduced or cancelled as a result of cuts in funding. Some associations are even changing the housing that they offer. For example, East Thames housing has said:
“We have had to review our housing offer in line with government changes, particularly the year on year rent cut, which will result in a £14m reduction to our annual income. We have therefore taken the decision to concentrate our resources on social housing for those in greatest need, as well as shared ownership which is supported by the government. Unfortunately we can’t continue to support and subsidise other tenures and believe those with the greatest need should be our priority.”
That language seems not only innocuous but quite positive, if we want to interpret it in that way, but translated into English it means that key workers and carers are going to be evicted from their homes. They will no longer be able to use intermediate tenures. I am sure that that is not the Government’s intention. It is totally wrong for people who have been living in those homes for 10 years to be evicted, and I would like the Minister to tell us that that is not the Government’s intention and that affordable social housing for key workers is part of the plan.
Nick Herbert (Arundel and South Downs) (Con)
Half of my exceptionally beautiful constituency consists of the South Downs national park. Much of the development is therefore forced outside the park, which rightly has high levels of landscape protection. This creates a great deal of pressure on the communities outside the park, and it is therefore unsurprising that planning matters are the single biggest issue in my constituency. That reflects the tension with which we as policy makers have to deal. On the one hand, we must acknowledge that it is in the national interest to build more houses. The Secretary of State has rightly identified the fall in home ownership and the lack of affordable housing as a serious national problem—perhaps our most pressing one. On the other hand, we must also acknowledge that it is in the national interest to protect the countryside and our communities.
I agreed with a great deal of what my hon. Friend the Member for South Norfolk (Mr Bacon) said, but the difference between the countryside and shoes is that the supply of land in the countryside has been deliberately constrained by planning legislation for a very good reason—namely, to prevent random development. The challenge for us is to find a way of increasing supply while protecting the countryside as far as possible.
Mr Bacon
I represent a rural constituency and I have yet to meet anyone who does not want to live in a house, even in a rural area. Is not the problem that people do not have enough of a voice in what gets built, where it is built, what it looks like and who gets the chance to live in it? If we can change all that, we can change the conversation about development and environmental protection.
Nick Herbert
I agree with my hon. Friend about that. People often have legitimate reasons for being concerned about development, but a silent group of voters, perhaps a majority, cannot get their foot on the property ladder—those who face high rents, for whom the dream of home ownership is a long way away— and we need to ensure that their interest is represented, too.
There is perhaps something of an ambivalence at the heart of government policy making now. We started off, rightly, with the Localism Bill, the theory being that we should devolve power to local communities and that would be a better way of incentivising house building. There is some evidence, particularly through neighbourhood planning, that that policy approach works, but more recent Bills have sought to take more powers to the centre as a means of driving through house building. That approach will not work, any more than it worked under the previous Government.
That policy ambivalence is perhaps reflected in a split personality on the part of the Government. Kindly Dr Jekyll rightly comes to the House to say that regional spatial strategies are to be scrapped, but at night the Treasury doors are unlocked and Mr Hyde emerges. He uses the Planning Inspectorate to drive up housing numbers, but that interference by the Planning Inspectorate can cause delays in the system, preventing plans from being completed. Kindly Dr Jekyll believes in neighbourhood planning and wants to speed it up, but evil Mr Hyde is allowing a system where speculative planning applications can be allowed against the wishes of local communities. Kindly Dr Jekyll remains committed to a plan-led system, but Mr Hyde, in this Bill, is allowing the Secretary of State to take powers to grant planning permission directly for major infrastructure projects and give permission in principle, perhaps not just on brownfield land, but for other sites too. We need clarity about that.
I suggest to Ministers that we need to address four issues if we want to encourage public support for house building rather than see continuing resistance. First, we need to keep faith in localism. Neighbourhood plans give people power and responsibility to determine what they want rather than what they do not want, and they have resulted in people electing to have more houses than expected. Secondly, people have legitimate concerns about the provision of infrastructure to support housing—not just major infrastructure, which is dealt with under this Bill, but local infrastructure. People need to be assured that there will be adequate school places, that GP waiting lists will not increase and that there will not be excessive traffic on their roads.
Thirdly, good design is at the heart of building public support for housing, and in that respect I strongly agree with my hon. Friend the Member for South Norfolk about the value of “self-build”. That perhaps wrongly suggests that people are going to be encouraged literally to build houses themselves; we are talking about opening up the market to a broader range of suppliers. My right hon. Friend the Secretary of State presided over the national planning policy framework, and we must recall that he explicitly said in his foreword that there were three dimensions to that framework: the social, the economic and the environmental. We must not lose sight of that environmental dimension as an important factor that the planning system must address.
Finally, we need to look at more fundamental barriers in our planning system, and again I find myself in agreement with my hon. Friend the Member for South Norfolk about that. There is a real question as to whether we will ever be able to build in the south-east at the rate that will be required to lower house prices and make housing more affordable. We face serious regional imbalances in this country, as much of the demand for housing is focused on areas in the south. We need to look more radically, not just at the rebalancing of the economy that is needed, but at the whole operation of the planning system, to ensure that it meets the needs of people and that housing can be made affordable for everyone.
Helen Hayes (Dulwich and West Norwood) (Lab)
It is a pleasure to follow the right hon. Member for Arundel and South Downs (Nick Herbert), who made some good points about the flaws in this Bill. The two boroughs that I represent parts of have 20,000 people each on the waiting list for a council home. My surgery is full every week of people seeking help with their housing needs. They come with harrowing accounts of homelessness and private sector evictions, overcrowding and damp. My local councils, Lambeth and Southwark, are each playing their part in delivering new homes at social rent. I would love to be able to say to my constituents, “I know things are really bad, but the Government are bringing in a new law that will help to deliver more genuinely affordable homes and although it will take some time, things will get better.” I cannot tell them that, because the consequence of this Bill is that the new definition of an affordable home in London will be a home to buy at £450,000.
There is nothing in this Bill for people who are on a council waiting list, for those who are sleeping on their friend’s sofa or for those who are bringing up their children in a one-bedroom flat when they desperately need three bedrooms. I agree that we should be building new homes to buy, but we cannot be meeting the housing aspirations of one part of our community while deliberately ignoring the needs of another part entirely—that is what this Bill does. Instead of providing for a mixed housing economy—more homes at social rent, intermediate rent and market rent, and more homes for shared ownership and homes to buy—this Bill will result in much-needed council homes being sold off to pay for housing association tenants to exercise the right to buy. Life for those in the most serious housing need and for many others, including junior doctors, teachers and many other vital public sector workers, will just get harder.
I find it astonishing that this Bill defines a household comprising two adults earning £20,000 each a year as “high earners”. Bus drivers, bricklayers, carpenters, nurses and midwives will all be required to pay market rent under the “pay to stay” clause, but that is as much as double what they will be paying as social tenants and it is certainly not affordable in London. The solution to meeting our housing needs is to build more homes across a wide range of different tenures, not to price some of our most committed and hard-working tenants out of their homes by penalising them for getting a pay rise.
On the private rented sector, I welcome the measures to tackle irresponsible landlords, but they will not help my constituents Jason and Helen, who live with their two teenage daughters in a privately rented flat in Dorchester Court in Herne Hill. Jason is employed by his landlord as the gardener of the estate, and Helen is a teacher. They are facing eviction from their home because the landlord has put up the rent, without warning, to a level they cannot afford. Despite the fact that they have no rent arrears and they have been good tenants for 21 years, they have been served with a section 21 notice, under which the landlord does not have to give any reason for requiring them to move out. Until we have more secure forms of tenancy and checks on unreasonable rent increases, many residents will continue to live with the day-to-day insecurity of unpredictable rents and the threat of a no-fault eviction.
Finally, I am very concerned indeed about the planning aspects of this Bill. I am proud to have spent 18 years working as a town planner. What I loved most about the profession was the vital role that planning plays in brokering the space between individual interests and collective community need. The planning system allows communities to be involved in plan-making, in scrutinising and commenting on the detail of individual applications, and in ensuring good design quality and that good open spaces, school places and health centres are provided to support an expanding population. Good planning ensures that we meet our need for new homes and jobs in the short to medium term, while delivering really successful, sustainable places for the long term.
This Bill lacks any vision for planning, regarding it as simply a constraint to development. Through a multitude of different measures, including “in-principle” planning consent, the removal of the need for section 106 contributions from starter home developments and the provision for Secretary of State call-in of planning decisions, this Bill will take power away from our local communities, while also removing vital checks on the quality and sustainability of development. Local authorities will be denied the opportunity to ensure that new development meets local need and to negotiate for community facilities and affordable housing. Most importantly, communities will be denied the opportunity to shape their neighbourhoods. I am a supporter of neighbourhood planning, but what will be the point of a neighbourhood plan if the council has to grant in-principle consent and the Secretary of State will take many decisions personally in any event? I am clear that this centralisation of planning will prove to be profoundly difficult for many communities across the country and will ultimately lead to more not less delay in the planning system, as local residents protest, petition and judicially review.
In meeting our housing needs, we should regard planning as the essential toolkit to deliver high-quality, successful, diverse and attractive communities. The planning system should be where we hold, collectively, our aspirations for our communities in the future, and how we make sure that those aspirations are delivered. This Bill, as drafted, will do the opposite.
Mr Mark Prisk (Hertford and Stortford) (Con)
It is a pleasure to follow the hon. Member for Dulwich and West Norwood (Helen Hayes). She is a planner and I am a chartered surveyor, and I draw the House’s attention to my entry in the Register of Members’ Financial Interests.
This is a broad and substantial Bill and it is difficult to do it justice in just five minutes. I preface my remarks by strongly commending the excellent speech of my hon. Friend the Member for South Norfolk (Mr Bacon), who showed real passion and knowledge. He knows what he is talking about on the subject of custom and self-build homes, which is a very important part of this Bill.
Planning reform, help for tenants and a more professional rented sector are the topics on which I wish to focus. At the beginning of this debate, the Secretary of State rightly said that, for a quarter of a century, our housing markets have been dysfunctional. Year after year, we have been producing, roughly speaking, half the homes that we need. That persistent gap between demand and supply is at the root of almost every housing issue that we debate, including affordability, standards, homelessness, and the rising housing benefit bill. The acid test for this Bill, and for housing policy as a whole, rests on whether the Government will deliver a sustained increase in the supply of homes regardless of tenure.
I welcome the proposals on starter homes and on custom house building, but let me briefly turn to planning reform and offer one suggestion to Ministers. If the planning system is to work, we need to reverse the loss of experienced planning officers in our local authorities. In some authorities, the system is grinding to a halt because of the lack of planning officers able either to produce a local plan or to drive forward negotiations with experienced developers. I urge the Minister, in his reply to this debate, to bring together the planning profession and the industry—and say how he will do that—to secure a joint agreement on how we can strengthen planning departments and get the system moving.
My second issue is tenants, particularly those of houses in multiple occupation. I welcome this focus on HMOs. Many Members here will know that, sadly, these are often the properties run by the worst landlords. It is the sub-sector where, all too often, criminality and human trafficking lurk. That is why I strongly encourage Ministers to apply the provisions of the Proceeds of Crime Act 2002, so that the worst of the illegal HMOs are seized and handed over to the local housing authorities for legitimate homes for families. That is the best signal that we can send to deter crooks from entering that market.
That leads me on to the wider issue of the private rented sector. As the Housing Minister, I launched the build-to-rent fund. I did so because we needed a more professional, long-term rented sector. We need to be building homes that add to the housing stock. I am talking about homes that are specifically designed to provide for tenants’ needs. Attracting long-term institutional funding will mean longer tenancies, because such investors want fully occupied homes and satisfied customers.
It is a model of renting that is common in most advanced countries, particularly in most American cities. Here in London, as my hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) knows, the Greater London Authority has backed the build-for-rent scheme, with supplementary planning guidance, which promotes discounted market rent to deliver appropriate affordable homes.
We are seeing authorities in London, including Labour authorities such as Greenwich, intelligently use this discounted market rent model, and I strongly encourage Ministers to adopt that process and to try to ensure that it is adopted nationally. Let me be clear, I am not against buy to let. I just think that it cannibalises the existing housing stock and it has reached a scale where it is crowding out home ownership, which cannot be right. Instead, we should be promoting a long-term, professional rented sector in which more homes are built to rent, and I hope Ministers will continue to promote the sector. Out of respect to those who have yet to speak, I shall draw my remarks to a close.
Mr David Lammy (Tottenham) (Lab)
In a spirit of generosity, may I welcome the moves in the Bill towards self-build? When we see the markets in Scandinavia, Australia and the States, it is clear that we need to inject some energy into this idea of buying land to build a home. As the hon. Member for Hertford and Stortford (Mr Prisk) said, in areas like London with lots of houses in multiple occupation, the banning orders and the regulation of some of our rogue landlords are very necessary.
Very sadly, I must say that this Bill is of deep, deep concern. At this critical juncture for housing in our country, it is extraordinary that the Government should propose a Bill that will, in effect, see the decimation of social housing. I believe in mixed communities and I genuinely believe that some Government Members do too. I love the idea of the London in which my father arrived in the 1950s. By the late 1960s, he was able to buy his own home for £6,000 in Tottenham, and his sister, who arrived with him, was able to get a council house on the Croydon block of Broadwater Farm. Also at that time, we had a private rented sector. The sector was split into thirds.
The vast majority of Londoners moving into a home this year are in the private rented sector. There is nothing in this Bill to address the huge soaring rents—40% over two years in Richmond, 30% in Kingston and 20% in the London borough of Haringey. There is nothing for all those people who are struggling with their bills. They are paying, on average, 46% of their salaries on rent. If the Government believe in mixed communities, then please come to this House and say something about social rents, social housing and affordable housing. What we have is a Bill that will see the reduction in the number of those homes because of the money that will be taken from already cash-strapped councils. Of course this Bill is coming before the spending review in which yet more money will be taken from local authorities.
Let us think about the London that we will see. A starter home scheme will be exempt from section 106, so all the infrastructure that comes with housing—the schools, clinics, hospitals and children’s centres—will not be there. With no community infrastructure levy in place, all the infrastructure will be gone. What kind of communities are we attempting to build here in London?
It feels as though the Secretary of State has his mind set on building Paris. Great! That will be an inner London of the very wealthy. All of us in this Chamber have assets and homes. Anyone who owns a home in London—certainly if it was bought 10 or 15 years ago—will find that it is worth well over £1 million. Then there will be those without assets, who will be condemned to the private rented sector. Why is that? It is because these new starter homes will not help them.
If someone is on a living wage in London, they cannot afford a starter home on this scheme. What is the point of talking about it? It is a waste of time. Effectively, it is a scheme for the middle class children, with a 20% discount. I came to this view when I ran for the nomination for London Mayor. I supported right to buy—it is right to be able to exercise that right—but there is a crisis here in London. We can forget the idea of one for one. We have arrived at a place where we need a moratorium on right to buy; we do not need to extend it any further. We need to address the fundamental problem of taking out of the system property that is paid for by taxpayers—we are talking about subsidised properties with discounts of up to £100,000. There is no other area of Government policy where Conservatives would support the idea of giving taxpayers’ money to those who have and taking it from those who have not. This is a shame. If the hon. Member for Richmond Park (Zac Goldsmith) becomes the next Mayor of London on the back of this Bill, very, very tragically, housing will be permanently ruined in this country for the poor.
Boris Johnson (Uxbridge and South Ruislip) (Con)
Labour is making many mistakes in opposing this excellent Bill. It is wrong to say that this is a national problem. I could take Members to some parts of our country, to some great cities, where there is not a housing crisis in the way that it is expressed in London. According to local papers—I have no reason to doubt them—there are homes for sale for less than £10,000. There are huge expanses of brownfield sites available in some urban areas in this city. In spite of all the excitement about the northern powerhouse, the population of Manchester is still a third lower than it was in 1931. I make that point to show that the crisis, which does affect us all, is overwhelmingly expressed in the south-east and, above all, in London, where it is at its most acute, as we have heard from Members from across the Chamber. The shortage is excruciating for those trying both to rent and to buy. That suffering was well articulated in the previous speech as well as by my hon. Friend the Member for Richmond Park (Zac Goldsmith), in particular. It is vital, as everybody has said, to continue with our exertions to build record numbers of new homes and affordable homes in London.
I remind the House, despite the frenzy that we have just heard from Labour, that this mayoralty has worked flat out over the past eight years to make up for the passivity and inertia of the previous Labour Government and the locust years in which they failed to build enough affordable housing. If we were to have another Labour Mayor, which I devoutly hope we will not, I remind Labour that the previous Labour Mayor, at the height of the boom and at a time when the public sector was flush with cash, came absolutely nowhere near our record of building affordable homes. We have beaten him by 25% of our total, as my hon. Friend the Member for Richmond Park said, and this year more new affordable homes have been completed than in any year since records began.
We are compensating for the instinctive hostility to home ownership exhibited by Labour, with 52,000 people helped into part-buy, part-rent schemes. That is why I so warmly welcome the provisions in the Bill. I am glad to hear the support for right to buy expressed by some hon. Members and it is right that we should give housing association tenants that right. We are righting an historical injustice and we deserve to hear whether those on the Labour Front Bench support the Labour Back Benchers who support our policy of extending the right to buy. We have heard some passionate defences of it. Symmetrically, it must also be right where possible to sell off high-value council homes and use the proceeds to fund not just the subsidy but the construction of new homes.
Members might not be aware that London already has a huge stock of social housing, with 33% of homes in the centre of the city social homes of one type or another, compared with only 7% in Manhattan and 17% in Paris. Across the whole of Greater London, the figure is 24%. High-value council homes could be sold, with the proceeds used to build more low-cost homes in London. Given what I have said about the geographical location of the housing crisis and given that it is in the capital where we have the demand, I am grateful for what we are hearing from the Government and from Members who spoke supporting this argument. It would be the height of insanity to take the funds yielded by those council home sales and spend them outside London on the right-to-buy subsidy without ensuring that we get at the very least a legally binding and funded commitment to a two-for-one replacement for those homes in London. I know that that is what we are working on and that it is widely supported by Members across the Government Benches. That would help us to build the 50,000 homes a year that we can build. We have the brownfield sites to do it.
I welcome the changes to the planning rules in the Bill and the continued support for the London Land Commission. We are working flat out to build more homes in this city than at any time since the 1930s, keeping pace with demand. The Bill will streamline planning, help us to assemble the public land we need and give tens of thousands of people the joy and pride of home ownership, a right that they are at present unfairly denied, and the opportunity that is at present most bitterly contested by bourgeois lefties, almost all of whom already own their own homes.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Meanwhile, back on planet Earth, the smart move for the Government would be to split the proposals in two. There are some welcome measures in the planning section that could even be strengthened, and the Government could then go back to the drawing board with their housing proposals. That would allow the Secretary of State perhaps to recover some of the nice guy image to which my right hon. Friend the Member for Wentworth and Dearne (John Healey) referred. That might be the way forward.
According to the Government’s own statistics, rough sleeping is up 55% since 2010, but looking around our towns and cities that seems like an underestimate to me. Many of us will have come across parents with young children at our advice centres who are living either in hostels or in entirely inappropriate accommodation. We have a crisis, and not just in London. I know the Chancellor is not very good at recognising the impact of his policies on real people, but I urge Ministers to look at the Shelter analysis of their starter home plans. It shows that a family on the Chancellor’s national non-living wage will be able to afford a starter home in only about 2% of local authorities across the country. That will not work. Lord Kerslake has pointed out that the Government’s definition of starter homes stretches the definition of affordable housing beyond breaking point.
I do not understand the obsession with selling off council and housing association properties when there is such a housing crisis. I understand the aspiration of tenants to be homeowners, but I wonder why Ministers think that that aspiration does not extend to tenants in the private rented sector. Why are there no rights for those who rent in that sector?
As I have said, I welcome part 2 of the Bill, especially the action on rogue landlords and letting agents. I particularly commend the banning orders in clause 13, the database of rogue landlords and the rent payment orders. I also welcome part 5 and the more stringent “fit and proper” test for landlords, and, of course, clause 86, which offers a way forward at the time when the deterrent costs of court action often result in rogue landlords getting off scot-free. It could go further, however. This is about identifying and finding not just unfit landlords but rogue developers and people who exploit permitted development rules daily in my constituency and elsewhere, destroying the family homes we need and creating ugly, often unsafe, HMOs in communities that do not want them and do not need them. This is all done in pursuit of the vast profits they can extract through exorbitant rents and non-existent maintenance and repairs.
If the Bill was strengthened to protect family homes and to tackle unsafe extensions and breaches of permitted development rules, the Secretary of State would have some prospect of regaining his good guy reputation. As it is, the first part of the Bill is a mess and mistake and the second part simply does not go far enough.
Alec Shelbrooke (Elmet and Rothwell) (Con)
I am keen to move the debate further north. The hon. Member for Birmingham, Selly Oak (Steve McCabe) represents the Birmingham metropolitan area, but I want to move us up to Leeds, as we have not been there so far. I take exception to the amendment tabled by the Opposition, which states that
“the Bill will not help most people struggling to buy their own home”.
The problem we face in Leeds is the ineptitude of the Labour-run council in getting on with putting a planning policy in place and allowing homes to be built. There is no doubt that there is demand for housing in our area, but the council is not properly consulting the neighbourhood plans or the people. A six-week consultation is taking place, but most of my constituents have no idea that it is going on. They have no idea how to contribute and, when they do, they find that Labour councillors, in particular, are not interested in taking any notice of what they have to say. That is leading to a failure of the policy that put the power in the hands of local people.
To turn around and say from a politically motivated point of view that this is all the fault of the Government, who want to build on green fields, is, quite frankly, a lie. It is nothing more than that. Yes, the Government want more houses to be built and the Bill empowers that. As my right hon. Friend the Secretary of State said, we have managed to get rid of more than 1,000 pages of planning law to simplify these matters. However, we are not telling the councils where to build that property. In fact, we are trying to be more helpful by introducing the brownfield land register.
Leeds City Council has said that it wants to build 66,000 homes. The debate has focused on London, where there is huge demand, but that is not the demand in Leeds. According to the latest data, there is demand for 44,000 properties, of which 39,600 could be built on brownfield land, but that is not the approach that the council has taken. My hon. Friend the Member for Pudsey (Stuart Andrew) and I have spent hours, days, weeks and months arguing with the council and with inspectors about the actual demands and needs of the city, but because the council is pushing forward and saying that it needs the higher number, it has allowed the developers to say, “We can’t possibly build that on the brownfield land so we’ve got to go out to the greenfield.” That is especially so because the land is distributed equally between eight constituencies, leaving huge swathes of brownfield land in the middle of the city underdeveloped—it will not be touched, so the development moves outwards.
My hon. Friend and I face the ridiculous situation of having to take 12,500 houses in our constituencies. We do not have brownfield land; we are lucky if we have some windfall land. My hon. Friend has worked very hard on that because his constituency is much more affected than mine in this regard. If the council is building patches of 5,000 homes across a third of each part of the constituency, my hon. Friend and I believe that they should be built in one place. Do not give us death by 1,000 cuts by doubling the size of each village in the area with absolutely no infrastructure improvement. Adding 5,000 homes in just one third of my constituency would mean, on average, about 5,000 to 6,000 extra children. Where are they going to go to school? Where is the sewage going to go? Where is the water supply going to go? How is flooding going to be dealt with? None of those issues is being addressed. It is giving the developers the opportunity to get round all the loopholes and all the planning rules and say, “You’re quite right—we are going to build on that field.”
Unfortunately, until Leeds council comes up with a policy that is right, stops trying to blame the Government for building on greenfield land, and says, “We are a Labour party in Leeds who have been given immense powers by this Government, and we will use them responsibly and do something properly”, we will not see the volume of house building that needs to take place to ensure the provision of affordable houses.
Stuart Andrew (Pudsey) (Con)
Does my hon. Friend agree that the brownfield register will enable us to see precisely how many sites are not going to be regenerated? Is not that an absolute failure for the people who live in those communities and have to look out over these derelict sites while seeing the destruction of our valued countryside?
Alec Shelbrooke
My hon. Friend makes a powerful point. The council is playing with people’s lives. These are people who have moved into communities and are working damn hard to pay the mortgage and develop the life that they want, but they do not know what is going to happen. Saying that they want to be looking out on to fields and that they have paid for that is an important argument, but we also need to make the other arguments. Where are the children going to go to school? Where is the road capacity to cope with 400 houses here and 400 houses there, with no infrastructure improvements whatsoever? How do people get access to the doctor’s surgery? People have genuine concerns about how they can function in their daily lives.
I urge my right hon. Friend the Secretary of State to look at these areas and say, “We’re giving you the power through a register of brownfield land. If you’re not going to develop that land, we want to know why. We want to know why you’ve decided that all this land in the centre of Leeds is going to be left derelict and you’re going to build on virgin land outside, whether it be green belt or greenfield.”
Julian Sturdy (York Outer) (Con)
My hon. Friend is making some powerful points. Is it not the case that developers will always go for the easy option, which is greenfield and green-belt land over brownfield land, and that we have to do everything we can to make sure that local councils are putting brownfield sites first?
Alec Shelbrooke
My hon. Friend is absolutely right. I know that he suffers from many of these issues in his constituency. The Labour party in Leeds is allowing developers to get away with this by going on to the most profitable land masses and building properties that are not going to help the situation. Houses worth £250,000 or £300,000 are not affordable starter homes in anybody’s view.
The fundamental point is why councils are allowing developers to get away with this. Why are they being allowed to say, “We’re going to leave that area derelict and build on this greenfield?” Most constituents in a rural area, if challenged to look at a meadow and say whether it is green belt or greenfield, would not be able to do so—most people do not know the difference. They are planning terms. People will then see swathes of land in the city centre that are not being developed because the council is not considering that. It is time for the council to get on with it, to engage with local people, to look at things strategically, to say “There’s a brownfield register and we’re going to use that land.” They need to get on with building the number of houses we need rather than an over-inflated number that means that the developer will always be able to have the choice cuts and build the most expensive and profitable houses.
Tim Farron (Westmorland and Lonsdale) (LD)
It is a pleasure to follow the hon. Member for Elmet and Rothwell (Alec Shelbrooke). I politely differ from his colleague, the hon. Member for Uxbridge and South Ruislip (Boris Johnson). As a Member of Parliament for a constituency in the north of England, where the average house price is 12 times the average income, I would say that this is clearly a national problem. Of course it varies in different areas, but we have a national emergency, even, in housing. Millions of people suffer daily from poor housing, or from the uncertainty of not knowing where they will be living from one month to the next and whether they can send their children to the same school one term after the next. Across the country, we have soaring house prices several times higher than a median earner can afford, and a rental sector in which many people spend over half their income on rent.
There is a need for Government, first, to show that they understand this emergency, and then to show the ambition to make real change that improves people’s lives. However, this Bill is disappointing and unambitious at best, and brutal and counter-productive at worst. It does not make a significant attempt to tackle the housing crisis or show any signs of being written by anyone who even understands that crisis. Instead, it is an all-out assault on social and affordable housing at the very time when those homes are most needed. It seems to be driven by a narrow, dogmatic belief that home ownership is the only thing that matters in housing, and it demonstrates a total absence of any grasp of the real issues facing families in housing need in in Britain. It will have long-term consequences in breaking up communities through selling off homes, and those consequences will be damaging and irreversible.
The Bill barely even addresses those crucial issues and certainly does not tackle them. It forces councils to sell off higher-value homes and makes no commitment to replace homes sold off under the extension of right to buy to housing association tenants. It allows developers off the hook from providing affordable homes and instead prioritises so-called starter homes that were not affordable in the first place and certainly will not be after their first owner. While it has positive aspects on rogue landlords and speeding up planning processes, it is mostly an eclectic jumble of initiatives that miss the point of the housing emergency before us.
Access to housing is fundamental to our liberties, our opportunities, and our hopes for the future; that applies to every person here. We therefore need a positive vision for housing that meets existing needs and gives security to the most vulnerable. We need more homes of all tenures—affordable homes that must live up to their name and be genuinely affordable. We need an ambitious plan that increases home-building to 300,000 properties a year, that is forward-thinking, and that sets us up for the low-carbon future that is essential for the sustainability of our planet.
The Liberal Democrat vision is based on understanding this emergency and having ambitions to solve it. It is a vision of 10 new garden cities strategically placed where new communities can grow and thrive; of empowering councils to manage their housing stock effectively, enabling them to borrow what they can and build what they need; of stimulating private sector investment in housing through the creation of a housing investment bank; of supporting and sustaining rural communities to ensure that young families can afford to continue living in the place they call home; of strengthening local communities by bringing empty homes back into use; and of tackling the excessive second home ownership that damages communities in rural areas such as the west country and Cumbria.
Instead of that, this Bill will cause the break-up of communities as homes sold off under right to buy and the forced sale of council homes are lost to local people. Its provisions will significantly reduce the number of social and affordable homes, leading in turn to a rise in homelessness and adding to the already huge waiting lists totalling 1.6 million people. With more people in expensive temporary accommodation or in the private rented sector because there are not enough affordable homes, there will be extra costs for the housing benefit bill.
The flaws in this Bill are clear and the unintended consequences are extensive. Britain needs a radical, ambitious, compassionate housing policy that addresses the needs of supply and affordability and strengthens, not dismantles, communities. This Bill is worse than a wasted opportunity. It will inexcusably make the housing emergency worse. That is why we will oppose the Bill tonight and speak up for the millions for whom the housing emergency is not a political issue, but a daily reality.
Stephen Hammond (Wimbledon) (Con)
I had prepared a brilliant speech of 20 minutes, which will probably benefit from being condensed into four and a half minutes.
It is a pleasure to follow the hon. Member for Westmorland and Lonsdale (Tim Farron), although he will understand that I disagree with almost all he said.
Last May I was elected on a manifesto that made a number of promises to those who want to own their own homes. The dream that many people have of owning their home will no longer be a dream—the Bill will start to make that dream a reality. I am particularly pleased with the concept of starter homes. It is innovative, and it is essential at a time when the prospect of home ownership stretches well into their 30s for so many, and 37% of households in the 25 to 34 age group live in private rented accommodation, and owner occupiers in the same cohort have dropped from 59% to 36% in the past decade. This is an essential part of the Bill and I welcome it wholeheartedly.
Much criticism has been made of the Bill today on two bases. The first is that in London the cap is £450,000 and outside London it is £250,000. The point is that that is a cap. As the Prime Minister said in response to the Leader of the Opposition,
“We want to see starter homes in London built at £150,000 and £200,000”—[Official Report, 14 October 2015; Vol. 600, c. 307.]
The charge is that land is being brought back into use for that purpose at a cost above development value, but it is land that would not otherwise be used. It is surplus brownfield land, so that contention is at best questionable. The Opposition argue that this will cancel out the building of other properties, particularly rental properties. I accept that 37% of affordable homes were delivered through section 106, but the land that it is proposed to use for starter homes is surplus industrial land, which would not attract section 106. There is an incentive for many developers to continue developing properties for rent through section 106, and to develop this surplus land for starter homes.
Let me deal briefly with some aspects pertaining to London. When my hon. Friend the Member for Richmond Park (Zac Goldsmith) is elected Mayor next year, he will inherit a wholly different legacy from that which my hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) inherited. The failure of Labour in housing supply was writ large in London, and it is a tribute to my hon. Friend that by the time he leaves office 100,000 more affordable homes will have been built.
I applaud the launch of the London Land Commission in February, and I am pleased that it is already in existence. For many years the public sector has been far too slow to bring forward excess, surplus and non-operational land. I therefore support the requirement in the Bill for local authorities to compile and maintain a register of brownfield land. I ask my hon. Friend the Minister to consider how this may work in cities with mayoral powers. The Mayor of London—and no doubt mayors in other cities in future—has a strategic role in housing and planning. Surely the Mayor should have a formal role to co-ordinate that city-wide.
As I said, I am a huge supporter of the London Land Commission. The housing supply in London could be increased by bringing excess land into development for residential use. Will the Minister consider two small changes to the London Land Commission, which he jointly chairs? The Bill offers him the opportunity to introduce the right of first refusal for all surplus assets being sold to be offered to the land commission. It also offers him the opportunity to introduce a duty to co-operate—a duty on public authorities to work with the land commission, whether that is the London Land Commission or the Manchester land commission when it is established, to bring on that surplus land and develop those much-needed houses.
Far from being the “no home of your own Bill”, as some have charged, the Bill offers the chance for people to own their own home. Many say that an Englishman’s home is his castle. Under this Bill more people in our country will fulfil that aspiration and have the opportunity to own a castle of their own.
Siobhain McDonagh (Mitcham and Morden) (Lab)
It is interesting that I follow my borough colleague, the hon. Member for Wimbledon (Stephen Hammond). I am lucky enough to represent the best half of the London borough of Mitcham and Morden.
We know that the first-time buyer, whom we all suggest we support, is being crowded out by many things—not just by the number of properties being built, but by buy-to-let landlords and non-UK international investment in our property market. To give any chance to first-time buyers, the Government need to reassert the crucial moral and civic distinction between owning one’s family home and using the housing market as an investment to further one’s financial assets.
Last year international money bought 28% of central London properties. Much of that money was illegally gained. Property is bought with international money not just in central London, but even out in Mitcham and Morden. Two years ago a constituent emailed me to report that his daughter, who was looking for a property, found 32 people trying to purchase the same property on the same morning. His daughter and her boyfriend were standing next to a representative of a Chinese bank. That couple were in no position to compete with that money.
We must tackle two things if we want first-time buyers to have any opportunity in London and the south-east. If we want more money to build more homes, and everyone is agreed that we do, why not abolish tax breaks on buy-to-let mortgages? Why is it right for somebody who wants to be a landlord to get a tax break, but not for somebody who wants to live in their home? I appreciate that the Chancellor recently announced a reduction in tax breaks for landlords, and I saw in The Telegraph at the weekend that some landlords are starting a backlash. I hope the Minister will hold firm and consider that getting rid of tax breaks on buy-to-let mortgages would release £6 billion—enough to build 100,000 new homes.
Why do the Government not look at international investment in the London property market? Why not introduce a levy on people who do not intend to live in their property or even to let the property out, but to keep it empty while its value increases? That is abhorrent in the current situation. I ask the Government to look at exciting developments such as the YMCA’s Y:Cube in my constituency, whose opening the Minister attended. This offers prefabricated properties at 65% of the area’s market rent, with great standards of heating, providing a good place to live at a reasonable cost and a great investment for social investors, with a guaranteed return.
I have worked at the coalface of housing for most of my life, when I had a proper job. I worked in Wandsworth as a receptionist on the homeless persons unit, I worked as a housing adviser, I argued with landlords to get temporary accommodation for homeless families, but I have seen nothing like I am seeing now. The families who were homeless when I worked at Wandsworth were families with young children. The families I see in my advice surgery have three or four children, who are at the top of their primary school or at the start of their secondary school. I say every week to half of the people who turn up, “Don’t worry. Section 21 will expire, then you’ll go to court, then you’ll get evicted, then you’ll go to band B on the register. It will be fine and the council might provide you with temporary accommodation.” That is in my constituency in south-west London.
The families in Merton who become homeless get housed in Luton, Harrow or Wembley. The parents plead for the right to be able to continue their work. They plead for the right for their children to get to school. All this means that we are storing up social problems, the like of which we have never seen. On behalf of all those families and for the future of those kids, I plead with the Government to look at the situation with a fresh eye.
Mrs Maria Miller (Basingstoke) (Con)
It is a pleasure to follow two south London Members of Parliament, but it is important that the House sends a clear message today that the housing crisis we face should not just be seen through the prism of London, but is one that faces the whole of our country. Many people listening to this debate will applaud wholeheartedly the measures that the Government are taking in the Bill to show that they get it—that they understand the scale of the problem this country faces and are doing something about it. The right to buy will benefit up to 13,000 families in my constituency. Hundreds of my constituents have already benefited from Help to Buy, as they have from self-build projects. Starter homes will give thousands more the opportunity to have what we know so many people in our country want, which is a home of their own.
I will add three brief points to the debate. The first is that we have continued to build high volumes of new homes in Basingstoke throughout the recession, because it is a great place to live. When other local authorities were not doing their bit, we kept on doing ours. In the past 10 years, nearly 9,000 new homes have been built in Basingstoke, and 75% of my constituents now feel that enough homes have perhaps been built in our local area. However, in our emerging local plan, as it currently stands, we are being asked to build 850 homes a year during the period of the plan, amounting to a total of more than 15,000 new homes up to 2029.
In comparison with some neighbouring authorities, which we respect deeply, Basingstoke has considerably outperformed them on house building, delivering some 50 new dwellings per 1,000 residents, which is a good 25% to 50% more than in neighbouring areas. Nationally, my constituency has had one of the highest levels of house building for more than a decade. It has recently been ranked the third fastest growing town in the UK in the past 10 years. When the Minister replies, will he assure my residents that their views are being listened to by the local planning inspector and that the previous house building that is driving up the demand for the future can be properly understood, not perhaps misunderstood, as part of that process?
My second point is that all new homes must be the best. We expect new homes, whether starter homes or any other sort of homes, to be of the highest standards. I applaud the Minister for his drive in this area. He has set up the design advisory panel to make sure that exemplar designs are available for all to use. We can get the best houses only if we have the best people to build them. I again applaud the Government for understanding that and for making sure that Government apprenticeships are a top priority.
We also need to make sure that we have a robust and transparent building inspection regime to ensure that the homes are well built and fit for purpose. The Minister and I have had many conversations about that, and he knows my strength of feeling on the matter. He will also know that the all-party group on excellence in the built environment is holding an inquiry into the quality of new house building, under the able chairmanship of my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile), and that we will put our thoughts to the Minister when we have concluded our inquiry.
Oliver Colvile
Does my right hon. Friend agree that we must ensure that we do not have any sloppy building, which is the key issue in all of this?
Mrs Miller
My hon. Friend is absolutely right. Why should we accept sloppy building when it comes to a house? Given that we would take a sloppily made mobile phone back to the shop and expect a full refund, the same needs to be applied to housing.
I plan to table an amendment on the important point of addressing the status of building control performance standards. Those guidelines are currently regarded as best practice, and I believe that they need to be taken forward in a much more formalised manner.
The final point I want to make—I want to allow other hon. Members to contribute to this important debate—is on the issue of right to buy in relation to almshouses. I welcome the measure to extend the right to buy. As I have said, 13,000 of my constituents could benefit from this important measure. Many of them supported the measure at the general election, which is why it was important that it was central to our manifesto. However, some concern has been expressed to me by providers of almshouses about the possibility that the measures in the Bill may inadvertently draw them into a situation in which their residents acquire a right to buy in a way that is incompatible with the charitable status of almshouses.
Simon Hoare (North Dorset) (Con)
A trust that looks after almshouses in my constituency has expressed a similar concern, but as I understand it the Minister has already confirmed that almshouses will be specifically exempt from the proposals in order not to break up a rather important historical and heritage legacy in housing.
Mrs Miller
I raise the issue particularly because Colonel Massey, clerk of the Ironmongers Company and the Sir Robert Geffery’s Almshouse Trust, has written to me about it. The trust owns and runs the almshouses called Geffery’s Fields in my constituency. Like my hon. Friend, I understand that the right to buy proposals do not affect almshouses, but the Sir Robert Geffery’s Almshouse Trust needs reassurance in this area. In his remarks, I hope that the Minister will put minds at rest by ensuring that such people can see that a particular exclusion has been put in place for them.
This Government understand that owning one’s own home is simply part of the DNA of being British. It is part of the British dream. I believe that the Bill will help more people to realise that dream.
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. Hon. Members who have sat through all the debate, patiently waiting to speak, will be delighted to know that several of their colleagues do not have the patience that they have shown and have indicated to me that, having said they wished to speak, they now do not wish to do so. Most unusually, I will therefore increase the time limit for Back-Bench speeches to six minutes. Hon. Members can look on this as a bonus for the patient, the first of whom is Mr Tristram Hunt.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
I am enormously grateful to you, Madam Deputy Speaker. The age of austerity has ended—in so many ways.
It is a great pleasure to follow the right hon. Member for Basingstoke (Mrs Miller). At the end of her very interesting speech, she spoke about how owning a home is a British dream. In fact, it was a German immigrant, the Prussian attaché to the embassy in London, a man called Hermann Muthesius, who first identified English culture with the home. He wrote in 1904:
“There is nothing as unique in English architecture as the development of the house…no nation is more committed to its development, because no nation has identified itself more with the house.”
Muthesius thought England was
“the only advanced country in which the majority of the population still live in houses, a custom that has survived all the political, social and economic changes that European civilisation has undergone in the past hundred and fifty years.”
Muthesius did not bank on the terrible record of the coalition Government. Under the previous Labour Government, the number of homeowners rose by 1 million, while under the Tories it has fallen by 200,000. To that, we can add their rank failures on homeownership, private renting, affordable homes, and housing benefit. The profligacy of this Government is startling, with housing benefit now costing over £24 billion a year. I think that Members on both sides of the House would have liked to welcome the Bill as a way to kick-start homeownership and to clear up the coalition mess. Instead, however, we have an absolute dog’s dinner of a Bill. It will do little to solve the housing crisis, and I worry that it will potentially exacerbate community relations.
Let me start on the areas of agreement. I welcome policies that extend the opportunity for people to own their own homes. I welcome measures that restrict the operation of rogue landlords and letting agents. I welcome the register of brownfield land. I agree with the hon. Member for South Norfolk (Mr Bacon) that the clauses on self-build and custom house building have much to recommend them. I hope that they will give a boost to an industry that too often loses market share to German competition.
I wish, however, to focus on the extension of the right to buy to housing association tenants. As the House will know, the right to buy was originally a Labour party policy, which was debated in office by both Harold Wilson and Jim Callaghan, and finally enacted by Margaret Thatcher. If such a policy is fully funded and planned appropriately, it could be a powerful tool for social mobility and aspiration, which I welcome. However, under Conservative Governments it has always been mismanaged horribly. The replacement social homes have never materialised. Between 2012 and 2015, some 32,000 homes have been sold, but in their place only 3,500 social houses have been built. The Government have stripped out tens of thousands of homes, with no obligation that the money will be used to fund replacements, let alone in the same area.
Now we have a plan to force councils to sell their housing stock to fund the right-to-buy policy for housing associations—a policy that both the National Housing Federation and the Local Government Association condemn. As ever with the Tories, the sums do not add up. Expecting an auction of expensive council homes to compensate housing associations, to fund a £1 billion brownfield regeneration fund and to build the two-for-one replacement homes is simply not credible.
Then there is the aggressive statism, with 32 new powers being handed to the Secretary of State. I thought that we were entering an era of localism and devolution. Instead, we have the iron fist of the Treasury dictating to councils what they can and cannot do, demanding up-front payments from councils on the expectation of receipts, and undermining the autonomy of housing associations.
Finally, I will touch on the potential impact on community relations. We live in an age of high migration. The Government promised to bring immigration down to the tens of thousands. Instead, we have net inward migration of 300,000 a year. Government statistics show that a significant and increasing number of tenancies for social homes are given to people from outside the United Kingdom. In Stoke-on-Trent, the figure stands at well over one in 10 for housing association homes.
Most of us think that properly managed migration is good for the country, but when public concern is at an all-time high, we cannot ignore the sensitivities. The Secretary of State said that foreign nationals would have to be here and pay tax for longer than three years to qualify for this policy. I do not see how that fits with EU law. There are concerns in my constituency that this policy will entail selling off council housing that was built for the workers of Stoke-on-Trent to fund a discount in social housing for those who, rightly or wrongly, are not seen as having made the same contribution to the community and our welfare system. That is not a recipe for strong community cohesion. With the approaching EU referendum intensifying the focus on such issues, the Government must be sensitive to the social effects of their policies.
As I set out at the beginning of my speech, it took a German migrant to explain to the English their love of home life. It would be a great shame if this policy allowed our proud history of cultural exchange and respect to be so unnecessarily undermined on the altar of ideology.
Chris Green (Bolton West) (Con)
Since becoming an MP, the most common issues that constituents have raised with me have been housing and planning. Many of my constituents are concerned about being unable to buy their first property. Like me, they are greatly encouraged by the Government’s Help to Buy scheme, which has helped 240 families in Bolton West to find a home. They are also encouraged by the Government’s commitment to provide starter homes and the emphasis that the Bill places on planning authorities to promote their supply.
Having said that, more often my constituents have highlighted the problems associated with planning, such as the increasing pressure on local services, amenities and transport infrastructure. As the demand for housing increases, we must respond to the challenges that additional housing brings, particularly the challenge faced by our transport infrastructure. Increasingly, my constituency is part of the commuter belt for Manchester, a work destination for other commuters and a place where people from further out in Lancashire come to use the local railway stations for park and ride. That all adds pressure on the local road and rail network which does not seem to have been addressed when each housing project has been designed and built.
The Government’s investment in local transport infrastructure, especially the electrification of the Manchester-to-Preston line, which has stops at Lostock, Horwich and Blackrod, is welcome. We all look forward to seeing the increased capacity that the upgrade will bring. However, increased demand for rail brings its own problems, particularly around the Daisy Hill and Atherton railway stations. They are increasingly well used by commuters, but every day there is a horrendous parking problem around the stations. Not only are the local car parks full, but all the nearby roads are filled with commuter parking, which causes substantial disruption and inconvenience for local residents.
Ten years ago, the proposals for the A5225 Westhoughton bypass were cancelled, much to the dismay of local residents. We have the new houses but not the infrastructure to go with them. Improved transport infrastructure must be introduced in tandem with development. Another example of missing transport infrastructure is junction 7 of the M61. The Horwich locomotive works is due to be redeveloped, with the building of 1,700 new houses. My constituents are very concerned that that will put even more pressure on road infrastructure, so we need this vital link on our local motorway.
The loco works in my constituency is a prime example of where local concerns must be listened to. The site is brownfield and, on the whole, local residents support its development, which is in line with Government policy. Many of my constituents have contacted me to say that, despite that, they have little confidence that their concerns over health services, recreation, education, transport and the decontamination of industrial land will be dealt with adequately by the local council.
I strongly welcome clause 103, which requires local planning authorities to compile a register of land. I believe that there should be a register of brownfield sites, whether they are suitable or unsuitable for development, to speed up the delivery of housing, while protecting our green spaces. That information would be particularly useful to local action groups, who may use it to campaign on housing developments that are suggested for local areas. Like many people, I was disappointed by the plans to build on Roscoe’s farm in Westhoughton, without first making use of the local brownfield spaces that are available.
Given that only 64% of local planning authorities have adopted a local plan, I am pleased that the Bill seeks to improve that figure. It is vital that local planning authorities make such plans to decide how best to meet housing needs and that they publish them, so that local people are not excluded from the process. A plan-led system is crucial to creating sustainable development in local communities. People in the local community must continue to have a say on decisions that affect them and their families.
Emma Reynolds (Wolverhampton North East) (Lab)
It is a birthday treat for me to speak in this debate, and to get an extra minute. As we get older, we have a tendency to look back on our childhood. Thirty-three years ago, my mom and I were homeless. She applied to the local council in the west midlands as a single parent with a five-year-old child. After a couple of weeks of staying with friends, we were granted a council flat. I will never forget the security and warmth of our new home, nor my mom’s relief that we were no longer homeless.
Fast-forward three decades and if we were in the same situation today, we would be put in a hostel, so-called bed-and-breakfast accommodation or the private rented sector. Many families and children are in that situation. They are often uprooted from their communities, support networks and schools, and placed miles away from families and friends. According to figures released by Shelter only today, more than 100,000 children will be in temporary accommodation this Christmas.
In the early 1980s, council properties were not in short supply. Now, across the country, 1.4 million families are on the waiting list. Councils often do not have properties for homeless families or others who have been on the waiting list for years.
Lyn Brown
I am grateful to my hon. Friend for her story, because the social costs of these policies are not often aired in our debates. I, too, grew up in a council flat. It was safe, secure and stable, and it enabled my sister and I to thrive and to strive. Is not the real crime of this Government’s housing policy that it will deny so many children the very opportunities that our council properties gave us?
Emma Reynolds
Absolutely. The research shows that if a child is shunted from school to school and from area to area, they are more likely not to fulfil their potential at school and to do badly later in life, and those children who are being forced around the country are in that situation precisely because of an acute shortage of social housing.
Why do we have a shortage? The answer is simple: the failure to replace homes sold through right to buy and the failure to build social housing. I am not ideologically opposed to right to buy—I am not anti-aspiration and I am not against home ownership—but I am ideologically opposed to Tory Governments running down the number of council homes, and that is exactly what this Bill endeavours to do.
Since the introduction of right to buy, we have lost more than 1.5 million council homes, and that takes into account some of those that have been replaced. No Government have found a way to fund the discount and secure the building of new homes to replace homes sold. Worse still, the Tory Governments of the 1980s and 1990s let our council houses fall into rack and ruin. Many had damp kitchens, leaking windows and mouldy bathrooms.
I am proud of the Labour Government’s decent homes programme, which transformed 1.3 million homes and the lives of the families in those homes. Over our time in office we built 500,000 affordable homes, but let us be frank: our Government also failed to replace homes sold through right to buy.
In the last Parliament, the Tories spoke of reinvigorating right to buy, but their real agenda was and, I am afraid, continues to be to run down the stock of social housing. They introduced taxpayer-funded discounts of up to an eye-watering £100,000. They promised one-for-one replacement, but failed to deliver on that promise. Therefore, while the lucky few get a bigger discount, the social housing stock declines, leaving families languishing for years on council waiting lists, and the taxpayer is left to pick up the bill, with housing benefit going through the roof.
This Bill is yet another ideological attack on social housing. It contains provisions to force councils to sell off council homes; to legislate for housing associations to sell off homes; and to remove the requirement for developers to build affordable homes. On the forced sell off, let us be in no doubt that in some inner-city areas this Bill spells disaster for social housing. Frankly, it is also a slap in the face for localism. The Government call these homes “expensive,” but they are not luxurious. They are homes in high-demand areas. Selling them will mean that there will be no social mix in inner London and some other inner cities, and more homeless families will be forced to move miles away from their communities.
This ideological attack on social housing was rushed out during the final weeks of the election campaign. I know that because I was the shadow Housing Minister at the time. In the first weeks of this Parliament, I asked the Government numerous questions about how they were planning to fund the policy. I tabled a question about what estimates they had made of the value of the council homes they were going to force councils to sell and of the number that would become vacant each year. To be frank, the Housing Minister did not have a clue—he admitted that he did not know. The truth is that the Government do not have a proper plan to replace homes sold through right to buy.
To add insult to injury, this Government are removing the requirement for developers to build affordable homes. Of course we need homes for first-time buyers, but the requirement to build starter homes will replace the requirement to build affordable homes, which will lead to even fewer badly needed affordable homes.
Successive Governments have failed to get enough homes built to meet demand. The Conservatives say they are the party of home ownership, but home ownership is at a 30-year low. Successive Governments have failed to replace homes sold through right to buy. I support people’s desire to have the security of owning their own home, but we must recognise that there will always be people who cannot afford to buy and who need to rent.
We do not believe that the Government are going to replace the homes one for one. They failed to do so in the last Parliament and I would wager that they will also fail to do so over the next five years. There is nothing aspirational about running down social housing so that families who need it will not be able to rely on it, like my mom and I did more than three decades ago. This ideological attack on social housing is the real agenda behind this Bill and this Government, and that is why I will be voting against it tonight.
Robert Neill (Bromley and Chislehurst) (Con)
It is a pleasure to follow the hon. Member for Wolverhampton North East (Emma Reynolds). I wish her many happy returns. At my age, I have further to look back on my childhood than she has, but I remember growing up in an ordinary London suburb in a modest home that had been bought as a result of the hard work of my Labour-voting, shop steward, dock worker grandfather. That was about aspiration. There was no ideology about it. Those of us who have worked our way up in the world will not take lectures from the Labour party.
Robert Neill
I will not give way at the moment. I acknowledge the balanced contribution of the hon. Member for Wolverhampton North East, but we will not take lectures from her more ideological colleagues about the importance and value of aspiration.
I also remember from my childhood how the lives of the families of my school friends who lived on neighbouring council properties were transformed by the right to buy when it was introduced by Margaret Thatcher. They were given opportunities and security that they had never had before. It is important that Opposition Members remember that the aspiration for ever to be dependent and to be renting is not the aspiration of the majority of the British people.
The hon. Lady is right to say that we all need to build more homes. I recognise that Governments of both parties have failed in that regard, but the reality is, and history shows, that home ownership peaked at 71% in 2003. That happened under the Labour Government at a time when they were largely following the economic policies of my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke). After 2003, as the Labour party moved to the left, it lost economic credibility and home ownership declined steadily. The coalition inherited the mess it left behind, which had presented the market with further problems. That is the reality and there is no way Labour can escape that. That is the true history of the matter. This Bill therefore provides a welcome and much-needed boost for the housing supply. The coalition Government made a good start, but we need to do more and my right hon. and hon. Friends in the ministerial team recognise that.
My hon. Friends the Members for Richmond Park (Zac Goldsmith), for Uxbridge and South Ruislip (Boris Johnson) and for Wimbledon (Stephen Hammond) referred to the particular issue of the London housing market. As a London MP, I endorse and support everything they said, which is why I will support their proposed amendment. The London housing market is complex and much more varied than anywhere else in the country. In looking at how constructively to introduce the right to buy for social housing tenants in London, we will have to bear in mind the particular pressures on the London market as a result of its land-replacement costs being so much higher than those in the rest of the country.
I get the sense that Ministers understand that, and my hon. Friends and I look forward to working with them to achieve an outcome that increases the total supply in London. That includes what we generally call “affordable housing,” although nowadays that term is sometimes used as a proxy for social rented housing, which is important. Perhaps we also need to consider intermediate forms of tenure, which often relate to the squeezed middle in London who are in employment, working hard and cannot immediately get on to the market, but who will never qualify for subsidised social housing. Getting that mix right is absolutely critical.
On the Bill’s planning and compulsory purchase provisions, the planning changes are welcome, particularly the increased transparency as a result of making available basic financial information about planning applications. That follows on from the work my right hon. Friend the Secretary of State and I did in government to refine and rationalise the rules on predetermination. We can now have a sensible debate about the pros and cons of planning decisions to be made by communities and elected representatives. That is welcome.
Compulsory purchase might not be as headline grabbing as other parts of the Bill, but it is still important. I welcome the important proposals to make advance payment of compensation easier, but I hope the Government will reconsider the rate to be paid. I know they are considering 1% to 2%, but if a business loses its land through compulsory purchase, it will have to reinvest in its business, which, in most cases, will mean going to the bank for a loan. It would be much more equitable, therefore, to align the level of compensation more closely with the going commercial rate of bank loans. I hope we can consider that.
Another point relates to the useful changes to nationally significant infrastructure projects. I understand that it might sometimes be useful to have housing ancillary to a national infrastructure project—the consultation document talks about workers’ accommodation and so on—but it would be perverse if, as under the current rules, and as a result of a nationally significant infrastructure project, land was compulsorily acquired at current use value and the acquiring authority then built and sold houses at the housing value, meaning that the original landowner loses their land without any element of the uplift that comes from the housing development. That seems anomalous and unfair, and I hope the Minister will think about it.
All in all, this is a good and constructive Bill, and I will have no hesitation supporting it in the Lobby tonight. I commend it to the House.
Sue Hayman (Workington) (Lab)
I have several concerns about the proposals in the Bill, mainly around the impact on rural communities such as the one I represent. Some might well be unintended consequences, however, so I ask the Minister to consider them carefully.
There are problems with the lack of detail in the Bill, and I am concerned about the lack of consultation on the implications of some of the changes. I agree with my hon. Friend the Member for Wolverhampton North East (Emma Reynolds) about the right to buy. I, too, support it in principle, but it is important that it has a positive impact on the housing market, whereas there is a danger that the Bill will have a negative impact. The voluntary right to buy agreement between the National Housing Federation and the Government has removed from parliamentary scrutiny the precise terms of the agreements, leaving it to the Minister to define, while also removing the effective consultation with other affected parties. I am concerned about that.
Housing Associations have been told they will receive full compensation through a grant to make up the difference on any financial loss arising from right to buy, but it is not clear whether any conditions will be attached to the grant or how free they will be to spend the grant in the way they think best meets local need. Much of my constituency is rural, which is why I am interested in the rural aspect, and includes part of the Lake District national park, so I am especially concerned that the Bill does not take into account the particular challenges of delivering and retaining a mixed balance of tenures in rural areas. In an area such as the Lake District national park, ensuring adequate provision of social housing and affordable housing is critical if local people are to stay in the communities where their families live and where many have lived for generations. The cost of housing inside the national park is far higher than outside it, and local people often struggle to compete with the purchasing power of people from wealthier areas looking to buy holiday homes and second homes. The national park has recently been extended, which is only going to compound the situation.
The hon. Member for Westmorland and Lonsdale (Tim Farron) mentioned the gap between earnings and house prices in rural areas. I understand that the average ratio is 1:8, which means that many of the starter homes discussed will simply not be affordable to the people who need them to live in the local community. This is not just my view. The Country Land and Business Association also has concerns. It has said
“it is vital that the government does not require councils to impose starter homes on rural exemption sites”
because it will not ensure sustainable rural communities with a range of tenures. For me, it is problematic that the reforms in the Bill focus on promoting homeownership through starter homes at the expense of delivering affordable social housing for rent. This will have a negative impact on the provision of affordable social homes in rural areas, and it could also have the unintended consequence of wiping out affordable housing in areas such as the national parks. It is critical that any planning obligations provide homes that respond to actual local housing needs. For example, in my constituency, one of the biggest problems is with elderly people’s bungalows, and this was compounded by the bedroom tax. Elderly people in family homes have nowhere to go.
Replacing houses should mean replacing the houses sold with similar properties in the same communities at similar rents. The Bill needs to recognise the planning difficulties of building new properties within a national park. It can take a long time to identify the land and get a planning agreement to build within national park authorities because the process is so much more complex, and because it is so much easier to build outside the national park, people do not apply to build within it. If we are not careful, affordable housing within these communities could disappear and those communities will change for ever.
In my constituency, housing associations are delivering social housing in our rural communities, and they need the support and security necessary to continue doing so. I ask that the Minister carefully considers the impact of these proposals on our rural communities and, particularly given the ONS’s decision last Friday to reclassify the housing association sector, ensures that housing associations have a secure future as independent third sector bodies with a clear role to do as much as they can to use their assets and borrowing capabilities to deliver the affordable housing we need and where we need it.
Victoria Borwick (Kensington) (Con)
I thank the Minister for listening to areas such as Kensington that want to encourage entrepreneurship and business and for continuing to exempt central London areas from the rules on converting commercial premises to residential premises. This recognises that mixed communities are vital in promoting local employment and industry, which is particularly important in north Kensington, which is a business and creative arts hub.
While welcoming the aspirational policies in the Bill and recognising the value and popularity of home ownership, I believe it is important to offer housing prices at different levels. I have been meeting housing associations and colleagues in the borough to discuss the issue in greater depth, but as many others, including my hon. Friends the Members for Uxbridge and South Ruislip (Boris Johnson) and for Richmond Park (Zac Goldsmith), have so eloquently argued, there are unique features to central London, particularly high-asset areas such as Kensington, that require special consideration.
I would like to touch on the right-to-buy proposals, which, although aspirational, will require local councils to fund the discount received by the purchaser. This will force councils to sell off high-value vacant properties, or “voids”, rather than being able to offer them to families in temporary accommodation, and will thus further decrease the stock. Housing people in temporary accommodation is expensive and often unsatisfactory, and when a void becomes available, local councils must be able to use the property, via the housing associations, for those on their lists.
I ask the Minister to consider land values in outliers, such as Kensington and other central London areas, and to appreciate that the levels should be related to local house prices. Many house prices in Kensington exceed £1 million, and it would be extremely expensive for the council to replace any sold stock. The problem of high-asset values is not unique to Kensington, so I support other colleagues in asking the Minister to keep the money raised by London sales in London to help fund London’s housing provision where it is most needed.
I hope that the Minister will give thought to local land values and consider other possible exemptions—regeneration schemes, supported housing, sheltered care, housing specifically designed for the disabled—because although I support this initiative and want to help people into home ownership, it should not be at the expense of the provision of social housing for our most vulnerable.
I would like to touch briefly on the “pay to stay” proposals—again, I welcome the appreciation that those on good incomes should be able to pay a proper rent and put money into the system to help others. However, I am concerned that setting the level at £40,000 might be a disincentive to work, particularly if we consider a couple or young family with each earning perhaps £20,000 a year and starting out on their careers—two newly qualified teachers, for example. They will be expected to fund up to 80% of the market rent in Kensington and Chelsea, and might find themselves penalised, so I ask the Minister to look at tapering the rates, so that the Bill does not impact negatively on those it most wishes to assist.
Turning briefly to the starter homes proposals, we have become accustomed in central London to section 106 arrangements and have often been able to meet some of our housing need as well as assisting with the provision of disabled-accessible properties. While starter home provision will be financially attractive to developers, the homes are likely to be above the price threshold needed to help those starting on the housing ladder—a point that my colleagues made earlier. I urge the Minister to examine the implementation of the starter homes initiative. Although it has been popular outside London, we would want the Mayor and London boroughs to have a range of different models to encourage shared ownership, including First Steps and other provision. I ask the Minister to devolve the decisions to the local councils for them to choose the most appropriate mix of affordable rented and other models of shared ownership.
In common with my colleagues, I welcome the aspirations in the Bill to increase home ownership, and ask the Minister to consider local needs, particularly those in my Kensington constituency.
Angela Rayner (Ashton-under-Lyne) (Lab)
I am pleased to follow the hon. Member for Kensington (Victoria Borwick) and I enjoyed her contribution. I agree with her on the importance of our social housing and of looking after the most vulnerable. Many of my constituents, particularly young people, would love the opportunity to own their own home, but the Bill fundamentally misses the problem, providing another example of how out of touch this Government truly are. The problem facing Oldham and Tameside is not just of home ownership—it is the problem of getting a home, any home or a space for people to call their own, enabling them to live, work and raise a family.
One of my concerns is that the current plans to deliver starter homes will be at the expense of affordable and shared-ownership properties that are vital in meeting housing needs in my constituency. Shelter has illustrated that in many areas, including mine, starter homes will not be affordable to low and middle-income households. My constituency, like many across the north of England, has a low-wage economy. Gross average pay in Tameside is £413 per week, which is even lower than the north-west average of £480.
Many Members will share my experience of the increasingly desperate situation faced by constituents trying to secure affordable housing—constituents such as Claire, who works hard bringing up her young children and is just managing to keep her head above water. A deposit for home ownership is just a pipedream for constituents like Claire, when every surplus penny is used to make ends meet, pay the rent and bills and put food on the table.
Claire is just one of many thousands who are on the housing need register in Tameside. She resides in damp and poorly maintained private rented accommodation. She is part of the growing army labelled “generation rent”—a growing army that has helped to line the pockets of private landlords. Housing benefit has now grown to the sum of over £24 billion a year, an increase of £4.4 billion since 2010. The promise made by the Prime Minister to replace like for like each house sold under the right-to-buy scheme has already been broken. Some 1,346 houses were sold under right to buy in the north-west during the last three years, with a meagre 16 right-to-buy replacement homes being built.
The Chancellor has created a perfect storm in a dysfunctional housing market. The combination of the ill-thought-through right-to-buy extension along with the unfunded rent freeze has led to New Charter, a major social housing provider in my constituency, announcing the loss of more than 150 jobs. Last Friday, I met Ian Monroe, chief executive of New Charter, and he informed me that it has had drastically to scale back its plans to build an additional 2,000 desperately needed houses locally. It was New Charter’s intention to build the 2,000 properties over the next four-year period, but the number has now been reduced to just 600. Clearly, this will have a direct impact on people such as Claire and on the local building industry. We will not be able to meet the ever-increasing need and demand for social housing in my area. To put this into context, our local housing waiting list currently stands at around 3,000 applications. New Charter receives on average 80 new applications every single week.
The preferred route of housing tenure being pursued by this Government—that of home ownership—is just not realistic for the majority of my constituents. Please do not get me wrong, though, Madam Deputy Speaker. I welcome aspects of the Bill that restrict the operation of rogue private landlords and letting agents, and I acknowledge of course that not all private landlords are irresponsible sharks. Unfortunately, too many private landlords have a “take the money and run” attitude. Our social landlords, such as New Charter, know that providing homes is not just about bricks and mortar; they know it is also about building communities. This Bill does not go far enough to make private renting an affordable, sustainable secure option.
As the Bill stands, it will mean a severe loss of affordable homes for local communities across England. It will centralise significant powers in the hands of the Secretary of State and deprive councils of the capacity to meet the housing needs of their communities. It will prevent local people from having a proper say in the planning process, as other Members have mentioned.
In conclusion, just a couple of weeks ago, I asked the Minister for Housing and Planning to come along to my constituency and listen to the very people who are being hit by the damaging measures implemented on the social housing sector. I have still not had a response to my invitation. Perhaps I will get one today—come on, I will brew up for you! Again, I ask the Minister to meet New Charter’s management and the housing union Unison, which represents its workers. My colleagues and I on the Labour Benches are determined to protect our social housing for the sake of current and future tenants. Labour was and remains the party of mass house building, and we want to see Britain building again.
Mr Ranil Jayawardena (North East Hampshire) (Con)
I am pleased to follow the hon. Member for Ashton-under-Lyne (Angela Rayner), who talked passionately about her constituents. I want to ensure that Britain is a country where her constituents and mine can all aspire—through good, decent jobs—to buy their own home. That is why I am pleased to rise in broad support of the Bill. I support the initiatives being taken forward on brownfield; I support the desire to streamline compulsory purchase orders; and indeed I support the right to buy. However, the Bill still needs further work and requires greater clarity in a number of areas. I hope, in the short time available to me, to make a few suggestions which I hope the Minister will consider carefully.
I believe that “planning in principle” must not be used inappropriately to overrule councils on greenfield sites. We have said that we want to streamline brownfield development, and that is absolutely right—we must prioritise such development—but councils must be listened to when they devise both local and neighbourhood plans. Moreover, the definition of brownfield lacks clarity. For example, would a town centre site where there is mixed-use building, both retail and residential, be considered to be brownfield if not all the buildings were in use? I believe that the Government are determined to regenerate our town centres to ensure that they are prosperous, vibrant places in which people can live, shop and work, and I support them in that, but we need clearer answers to such questions.
Melanie Onn (Great Grimsby) (Lab)
Has the hon. Gentleman given any consideration to the additional cost that might be involved in clearing brownfield sites, especially when industrial use is involved, and to what happens when the value of land is so low that resale does not meet that additional cost?
Mr Jayawardena
I was about to say something about the cost of brownfield remediation. I know that the Government have considered that very carefully, because they have announced a £1 billion brownfield regeneration fund. I am a passionate supporter of the fund. I think that it needs to be introduced more quickly, and that councils should be involved in its introduction so that they understand how to gain access to it, but I believe that it is an important initiative that will bring into use brownfield sites—industrial and commercial sites, for instance—that would otherwise not be suitable for housing development, and would lie empty to the detriment of greenfield developments.
As we heard from my hon. Friend the Member for Bolton West (Chris Green), it is important for the deal to include not only remediation but infrastructure. There is not enough in the Bill about how infrastructure can be delivered in step with new development. The Government’s commitment to infrastructure projects is welcome, but I want to be certain that Ministers have considered carefully how those projects will conform with any planning process that is introduced by means of the Bill. As Members have pointed out, the community infrastructure levy will be reduced for brownfield developments, as it will be difficult to make use of brownfield sites with the same level of developer contributions, but it is critical that we do so. I do not want the reduction in the CIL to be a barrier to brownfield development, and I believe that the Government will step in to ensure that the regeneration fund is used for that purpose.
Simon Hoare
I entirely take my hon. Friend’s point about the need to deliver infrastructure in step with new housing development, but local planning authorities are often cautious about what the inspectorate might deem to be onerous conditions. Might not greater clarity about what is and what is not onerous lead the authorities to adopt a more robust approach to setting conditions, and thus to ensure that infrastructure development is delivered apace?
Mr Jayawardena
My hon. Friend is right. Governments do not necessarily have to fund projects; they can help local authorities to deliver the infrastructure that communities need simply by providing that clarity. I am sure that Ministers intend, either in the Bill or in regulations, to set out in clear English what local authorities can and cannot ask for in delivering for their residents.
That leads me neatly to the subject of the brownfield register. Many sites are currently vacant, and it is important for us to bring them into use. Introducing a brownfield register is critical to that, and I welcome wholeheartedly the Government’s enabling action, but I hope that they will adopt an approach that is common to the other parts of the planning process, such as the strategic housing land availability assessment process. Under SHLAA, it does not have to be the landowner who registers a property. It can be registered by any interested party, and the council then weighs that option alongside the others. That would be a helpful step, ensuring that even when land is not in common ownership, suggestions can be made and local authorities, which are democratically elected—and if we believe in localism, we want to give them the power to make decisions—can decide what land is suitable for brownfield development in the future. If that is done properly, it will prevent local authorities from being landed on by other forces, be they neighbours or others, who want to introduce more development than is necessary to meet local need in their districts. Local authorities will have an opportunity to shape the future of their areas.
The Government want to make compulsory purchase orders clearer, fairer and faster, and I fully support that initiative. It will help local authorities to use the information that they have identified in the brownfield register, to establish the infrastructure needs in their areas, and to deliver a package of measures that will work for their communities. Again, however, more clarity is required, because it is not yet clear what steps will be removed from the process to make it easier for councils to do just that. They will need support, financial and otherwise, to deal not only with land purchase—which can be arranged through back-to-back deals with developers—but the administrative process of undertaking a compulsory purchase order. That is costly, and takes much time. Streamlining will help, but councils will still need more support.
I also fully support the right-to-buy policy because I think that people should have the chance to own their homes, but I should like the Government to go further. I want the presumption in relation to affordable rented homes in any section 106 agreement on any new development to be replaced by the option for local authorities to say “No, we want affordable homes to buy.” I want the Government to consider paragraph 50 of the national planning policy framework, which still requires local authorities to produce a mix of housing types and tenures. A local authority might say, “We already have enough homes to rent; we want more to buy.” It should be for local authorities to make such decisions. It should also be up to local authorities to ensure that when money is being accrued from the sale of homes, there is potential for off-site provision, because it may well be possible to deliver more homes elsewhere
I support the Bill, but I hope that Ministers will give careful consideration to the points that I have made.
Ruth Cadbury (Brentford and Isleworth) (Lab)
I took careful note of the comments of the hon. Member for North East Hampshire (Mr Jayawardena). He is certainly not the only Conservative Member who has concerns about the Bill. Many Labour Members have made very good speeches, and have also expressed serious concerns.
The Bill brings no hope to the 600 families who are in temporary accommodation in my constituency, the thousands of young people with no hope of owning their homes, and those who cannot even find a place that they can afford to rent in west London. I agree with the excellent comments made by my hon. Friends, but I want to focus on the planning aspects of the Bill. It undermines a planning system which has stood the country well for 70 years, and which was introduced after the free-for-all speculative housing development of the 1930s. Making permanent the requirement for prior approval for change of use in offices, and extending it to industrial space, provides for a free-for-all of the same nature.
My local authority, Hounslow, has an excellent record of delivering housing across all tenures during the last Administration, including 3,000 affordable homes of which 400 are council homes. That was before the prior approval was introduced. Many buildings and sites that are no longer appropriate for their old use—factories, offices, and a magistrates court—have been granted change of use for decent-quality housing, with appropriate agreements providing for affordability, decent space standards and decent amenity spaces. So there was no need to bypass local authorities by introducing the prior approval regime to remove the normal oversight on change of use to housing, which the Bill extends permanently.
I received an email from Brentford chamber of commerce asking me to speak up for its members, some 80 of whom have either been forced out, or fear being forced out, of their office premises as a direct result of the prior approval regime. The system has been devastating not only to small office premises in our town centres such as Chiswick and Brentford, but to the retail and catering businesses that depend on the lunchtime trade generated by the people who work in those offices, as it is trade that the residents of the replacement flats do not bring. There are plenty of other brownfield and redundant buildings that could be used—indeed are being used—for housing without devastating the small business community of our town centres.
Since prior approval was introduced in May 2013, it has resulted in a loss or potential loss of 80,000 square metres of office space. Furthermore, while this has resulted in a net gain of 1,251 residential units in the borough, it has meant a potential loss of 512 affordable units. Why? Because if those schemes had gone through the normal planning applications process instead of the prior approval process, they would have had to have provided 40% affordable housing on site, as per the policies in the local plan. The prior approval process means no assessment or negotiation: no assessment of the space standards, parking standards, amenity standards and employment floor space.
The Bill contains welcome clauses on rogue landlords, but ironically it actually legitimises the creation of substandard housing with wholly inadequate space and other standards. I am not opposed to former offices becoming housing—or indeed schools, places of worship and so on—but we should use the planning system. It is open, transparent and accountable. We should use it to enable that to happen, not the clauses in the Bill.
The Bill removes the voices of local people and undermines local democratic control over development. It hands local authority planning powers to the Secretary of State and removes any community engagement. Yes, we need new homes, and we need great places to live, to learn and to play, but the “permission in principle” clause will severely restrict the ability of local authorities, community organisations and the public to comment on, or object to, development on these sites. Furthermore, there has been no public consultation on this provision.
We have no problem with the conversion of employment land and buildings being used to deliver the homes of the future, but not at the cost of vibrant businesses, or at the cost of a proportion of social rented and shared ownership homes, and at the cost of appropriate local oversight.
In conclusion, the Bill is bad for families in temporary accommodation; bad for all those who cannot afford to rent privately, such as the couple I met in my surgery the other week; bad for those small and growing businesses in west London, particularly in the town centres where landlords are rushing to change their property into housing; and bad for the shops, cafes and restaurants that depend on the lunchtime trade that those businesses bring. The Bill is bad for employers, such as the chief executive of our local hospital, struggling to recruit and retain qualified staff because of the housing crisis that the Bill will not solve. It is bad for the councils and community organisations shut out of planning decision-making, and it is bad for the communities that need a balance between housing, employment, space for community facilities and amenity space.
Mr Stewart Jackson (Peterborough) (Con)
I draw the attention of the House to my entry in the Register of Members’ Financial Interests.
I strongly welcome the Bill. It stands comparison with some of the finest examples of progressive Conservative policies on housing in the past 100 years. It is a radical, yet pragmatic Bill, and it draws on the Government’s success in areas such as Help to Buy and the fact that in the past five years we have delivered 260,000 affordable homes, with 140,000 housing completions in the last financial year. I have a great deal of respect for the right hon. Member for Wentworth and Dearne (John Healey). I read very carefully his piece in The Observer yesterday. It was long on complaint, but very short on coherent, costed and cogent alternative policies. He complains about the 32 new planning and housing powers invested in the Secretary of State, but in the same breath he says that we have a housing crisis in terms of supply, and that we need to deal with it. Well, we are dealing with it and needs must. We also have a manifesto commitment to deliver 1 million starter homes by 2020 and the right to buy for housing associations.
I, for one, make no apologies for being very proud that right to buy in the 1980s delivered the biggest transfer of capital to working people of any policy ever in British political history. I am very proud of what we did.
We have the right policy on starter homes. It was a little bit of an afterthought emerging from the ministerial fiat inserted in March this year into the NPPF guidelines, but now it will be on a proper legislative basis. I welcome the new legal duty on local planning authorities to promote the supply of homes and proper monitoring. I welcome, too, the flexibility between the number of homes and areas, because they will not be the same everywhere. We have discrete housing markets, as my hon. Friend the Member for Oxford West and Abingdon (Nicola Blackwood) said. I would perhaps challenge the Minister to consider the fact that there is, unless I am mistaken, no specific reference in the Bill to the insertion of starter homes in the affordable homes criteria. I might be wrong, but he might need to look at that in terms of the NPPF or in Committee. There may be some discrepancy with section 38(6) of the Planning and Compulsory Purchase Act 2004, where local planning authorities have to give proper cognisance to their adopted plans.
I support the introduction of a brownfield register. I welcome clauses 102 and 103 and the “permission in principle”, in particular. Only last year, the Campaign to Protect Rural England told us that 975,000 homes could be delivered by virtue of utilising brownfield sites properly. We must, however, have a coherent cross-government policy on this issue. The Public Accounts Committee only very recently looked at the failures of the Department to properly co-ordinate and use its methodology to follow through on the provision of land to the actual building of houses.
Oliver Colvile
Does my hon. Friend recognise that if we are to encourage people to develop brownfield sites, we must ensure that if they have planning permission they should not just sit on it? Should we not consider ensuring that they start paying business rates on land which is potentially to be used for development?
Mr Jackson
I have long been an advocate of a fiscal disincentive from Government to land banking, but the idea of land banking is apparently an urban myth. We need to do more work on that and I hope the Minister will take on board my hon. Friend’s comments.
Mr Bacon
Did my hon. Friend notice in the National Audit Office report a reference to 109,500 potential homes from the land that was sold? Does he agree that our constituents do not live in potential homes but actual homes and that they need to be sure that they actually get built?
Mr Jackson
My hon. Friend, in his normal astute and erudite way, puts his finger on it. One lesson was that the methodology was not as robust as it should have been in following through from the allocation of land to the actual construction of houses that people live in.
On tackling slum landlords, I strongly support and endorse part 2 of the Bill. In Peterborough, we have an issue with the degradation of large residential areas by slum landlords, which is very bad news for vulnerable tenants. This provision and the database are very welcome news, along with selective licensing, which is already in place under the Housing Act 2004.
We have scarce resources in government, and we need to focus them in the most efficient and effective way. We need to provide supported housing for people with long-term needs, such as mental illness. We need to look at extra care facilities and we need to keep our bargain or contract with working families who struggle to get on the housing ladder. In order to drive the market, it is vital that we look at removing SME builders from responsibilities and obligations on the community infrastructure levy and on section 106. There has been too much consolidation by large oligopolistic construction companies. We need to bring some of those smaller companies back into the market. I urge the Minister to look again at vacant building credit and to challenge the High Court decision, because this is about getting marginal brownfield site developments that will deliver hundreds and thousands of homes to people. It is a grave disappointment that the Conservative council saw fit to challenge the Department on that issue.
I agree with permitted development rights for the conversion of commercial and office premises to residential development, and there should be greater clarity on that before article 4 is used by some local authorities to prevent such a move. I welcome part 6 of the Bill, and challenge the shadow Minister to say what else could be done when 18% of local plans have not been published, 35% are not fully adopted, and one in five local authorities does not have a land supply plan. Needs must—we must tackle these issues. I am not in favour of big government, but I am in favour of more homes for people in my constituency and across the country. I support clause 107 on nationally significant infrastructure projects, but we need more clarity on that.
We must also consider the wider context and the demographic changes that are affecting our country. The number of single person households doubled between 1961 and 2014, and immigration is an important issue. I accept that owner occupation may not be for everyone, and we must look at residential estate investment trusts and give tax breaks to extra care facilities to help with that hugely important issue of adult social care and acute care in hospitals. We must tackle the skills crisis in construction. Two thirds of small construction companies said in August that they turn down work because people do not have the skills—plasterers, carpenters, bricklayers, scaffolders and apprenticeships are important.
We must consider access to capital, infrastructure, brownfield regeneration, complex remediation issues, and bringing on to the market many more intermediate mortgage products so that we support do-it-yourself conveyancing, shared ownership, and other forms of intermediate tenure. Social renting is important in some areas, but we are moving away from that model.
In conclusion, the Bill is much needed and will revolutionise construction, housing, and planning in our country. I will be supporting it tonight.
Alison Thewliss (Glasgow Central) (SNP)
I feel that one story about social rented housing in this country is not being told, because for me social rented housing is a public asset that we should support for that reason.
My Gran and Papa moved into a house in Wishaw in 1963, and they lived there until recently. My Gran is going into a care home, and we are finishing the process of emptying that home. For 52 years that house was their home, but it is a social rented house that belongs to North Lanarkshire Council. It is nice to think that, having had a family through that house, other families will now get to enjoy it and make it their home until it passes to another generation.
My Papa did not believe in owning his own home—he must have been one of those rare people in this country that the hon. Member for Wimbledon (Stephen Hammond) would not recognise, given what he said about his home being his castle and the necessity of owning it. My mum described my Papa as a west of Scotland Presbyterian socialist, which may be why he took that view. Throughout their life in that house, he and my Gran had the opportunity to buy it had they chosen to, but they believed firmly that the house belonged to the greater good and the common good, and that there it should stay.
Many people whom I represent will not have the chance to own their own homes. Some people are very far from that point and might not even have bank accounts, never mind trying to get a mortgage. We need to provide choice for people in cities across our country—choice for people who want to live in a socially rented house. Many of my constituents want the option of a front and back door, rent set at a fair level, and the support that a housing association offers. Local authorities and housing associations provide social support to their tenants that the private sector will never provide, whether that is advice on debt and money, benefits, or just somebody who can be asked for help when a repair is required. We should bear in mind those important social functions.
When my Gran was living on her own she had somebody to call if there was an issue with the heating or electricity. Over the years that she lived there, the local authority invested in that house with heating, rewiring, cavity wall installation and new windows. Good social landlords will invest in property, but private landlords will not.
In Govanhill in my constituency, there is an ongoing project to bring housing from private ownership back into housing association ownership because the situation has deteriorated so badly. The houses are falling down because private landlords cannot—and will not—take on that responsibility. There is a social imperative to take back those houses and ensure that they are sustained for future generations. Glasgow tenements are symbolic, and everybody knows them when they think of Glasgow. Over the years, however, they have been lost to private landlords who are charging a fortune for them—money that is going on the housing benefit bill. Those tenements are being lost, and there is a real need for them to come back to the social rented sector.
Housing associations plan and make investments on the basis of the rents they receive. When houses are sold off under the right to buy, housing associations cannot plan for that investment or for things such as new kitchens or bathrooms for their tenants. They receive their tenants’ money as income, and it gets reinvested, but that does not happen in many cases in the private sector.
Housing associations invest because they know that it will be worth it and they have a certainty of income. The Bill includes a 1% reduction in rents, and the head of the National Housing Federation had strong feelings about that when he gave evidence to the Communities and Local Government Committee. It may have been a personal view rather than that of his organisation, but he felt strongly that the Government should not be in the business of telling housing associations what their rents should be, as that should be for local housing associations to decide on the basis of what their tenants want and can afford.
There are many consequences to the right-to-buy policy. Longer waiting lists have been mentioned, and fewer large family homes will be available in local areas. That will force people out of those areas and reduce their diversity and social mix. It also has a knock-on effect on the sustainability of those communities. The pay-to-stay policy and the “high income” of £33,000 was mentioned, but that is not a high income by anyone’s standards, and £40,000 in London does not seem high either.
The explanatory notes state:
“The policy intent is to take ‘household’ income into account when determining whether the high incomes thresholds are met and…the definition of household can be set by the Secretary of State”.
I am worried that in larger family homes where teenagers or those in their early twenties cannot afford to move out, that measure will count against them and they will be forced out. Older and younger adults might be living in the same house and then be forced out of the area because young people cannot afford to rent anywhere. That is worrying and there should be more clarity about what “household” should mean when it comes to the detail of that provision. I also have a slight concern about housing associations in urban areas that perhaps are unable to get other land close by—
David Mackintosh (Northampton South) (Con)
Housing affects us all, and I am sure that, like me, many hon. Members have stories of people who have contacted them because they are concerned about the costs of buying their own home and getting on the housing ladder as their parents and grandparents did, and as they want their children to do.
The Help to Buy scheme that was introduced in the last Parliament enabled 120,000 families to buy their own homes, and I am pleased that 243 families in my constituency benefited from that.
David Mackintosh
No.
Northampton is a high-growth area with many new housing developments being built. Earlier this year I visited one of the new developments, and the sales staff told me that 70% of new houses were being sold through the Help to Buy scheme. Clearly that scheme will end next year as the economy improves, but the new Help to Buy ISA being launched next month will provide support to people saving for their first home by providing a Government boost to their deposits. That will help people who work hard and want a home of their own to secure their future at every stage of their life.
These schemes show my party’s commitment to housing and supporting the important aspiration of people to own their own home. This was the party that introduced the right to buy in the 1980s, and I am proud to be a member of the party that is extending the right to buy to housing associations. We can now end the discrimination for housing association tenants who were denied the opportunity to own their own home which, like council properties, have been built by councils yet get transferred over the years. I am pleased that constituents of mine living in housing association properties in Northampton have already been in contact with me to ask for an update on the right-to-buy extension, so I am sorry to hear the Labour party oppose extending the right to buy. We have to wonder whether they are actually against home ownership and the aspirations of people who want to work hard and get on in life.
I am pleased that this measure was achieved through a deal with housing associations, which many people said would not be possible. I congratulate my right hon. Friend the Secretary of State on securing it. I am sure that housing associations will also welcome moves in this Bill to reduce regulations on housing associations.
Helping people to buy their own home is only part of the process; we also need to change the way we build and deliver affordable homes. For too long this has focused on simply providing low-cost rented properties. In my view, people really want a home of their own, and so affordable homes need to be just that. The current planning rules prevent starter homes from counting as affordable, and first-time buyers cannot get the 20% discount on a new-build home, but these are the best type of homes for helping people on to the housing ladder.
We also need to ensure that councils can build more council homes and deliver enough homes to meet their local housing need. I know from my time as leader of Northampton Borough Council that for many years councils have not built enough new housing. That puts real strain on the system and does not help relations with tenants. I was pleased to announce the building of 100 new council homes in Northampton during my time as council leader to kick-start a major programme of house building. I know that that will take some time to complete, so I welcome the proposed changes to the planning system, including simplifying and speeding up the neighbourhood planning process. Indeed, I welcome the whole process for neighbourhood planning, including the plans in my constituency in the Castle area and in Duston, where the referendum takes place on Thursday. I wish them all well and congratulate everyone who has played a part in it.
I could talk about many things in this Bill that I support: the proposals to clamp down on rogue landlords; the provisions to provide more housing to help with homelessness; the work on bringing empty homes back into use; and the work on houses of multiple occupancy, which Members have mentioned and I think are linked to criminality and people trafficking. We have heard a lot, too, about the right-to-buy scheme replacing houses like for like. However, in my experience the biggest delay under the reinvigorated scheme was related to planning, so I welcome the changes in this Bill.
Housing is key for all of us. I strongly welcome the Government’s focus on putting this at the forefront of the agenda and look forward to seeing the new revolution of house building and home ownership as we meet this country’s housing need.
Justin Madders (Ellesmere Port and Neston) (Lab)
There seems to be a certain amount of agreement across the House that it is time for a new approach, but there is probably less agreement that this Bill is the answer. In my opinion, this prescription clearly does nothing to tackle the housing crisis. Where it does have an impact, I believe it will make matters worse, not better.
This Bill will continue to boost demand for housing while doing nothing to address supply. It will lead to rents and house prices increasing, and will mean that the dream of home ownership is even further out of reach for many of my constituents. We are told that measures in the Bill are focused on speeding up the planning system, but going faster is no good if it is all in the wrong direction and will lead to more and more planning decisions being taken against the interests of local communities who want not only housing, but the right developments in the right areas. They want green-belt and greenfield land built on as a last resort, once there is no capacity elsewhere, but instead we will have a “greenfield first” approach, with brownfield sites left empty in areas where local people are crying out for development, and for those sites that are not brought forward for development, local people will find themselves locked out of the process altogether, destroying any last vestiges of accountability in the planning system.
The planning changes brought about in the last five years have given us the worst of both worlds in Ellesmere Port and Neston. On the outskirts of Little Sutton in Ellesmere Port, developers have run roughshod over the wishes of residents to obtain planning permission for a large number of homes to be built on prime agricultural land. At the same time many brownfield sites closer to the town centre which have the capacity to deliver this number of homes and also bring much-needed investment into our town centre still lie empty. These sites have all had planning permissions in place for a number of years—all predating the permission in Little Sutton—but not one of them has had a spade enter the ground. Not one brick has been laid in anger and there is no realistic prospect of that happening while much richer pickings are available for developers elsewhere. The profit motivation of developers has been allowed to override any considerations about local wishes and, more importantly, about what is actually needed in the local housing market.
We have significant levels of land banking, but there is nothing in this Bill that would compel developers either to build on or to release land in areas where construction could start tomorrow. When I see large tracts of land lying empty in our town where permission is already in place, I see a system that is broken; when I see people in my constituency unable to live in a secure home of their own, I see a failure in the market; and when I read this Bill, I just see more of the same—I see a continued push for a market solution when the market has so clearly failed us.
A brownfield register will not help as we all know where those sites are now, and the obligations of developers under section 106 have already been watered down by the coalition Government to the extent that they are not worth the paper that they are written on. The result of this is that on numerous occasions developers have been able to use planning rules to get out of their obligations to build affordable homes. In the last few years more than 200 much-needed affordable homes have been lost in Ellesmere Port and Neston. Developers have driven a horse and cart through these weakened rules to plead poverty and say that they cannot possibly proceed with developments with affordable housing in them. They say that anything less than a 20% profit margin is impossible to work with, and so greed triumphs over need every time. The result is that their permissions are amended with the affordable housing element removed altogether. When the local authority, Cheshire West and Chester Council, tried to challenge this process the Secretary of State’s inspector came down firmly on the side of the developer, handing local people a big bill for costs in the process. So here we have central Government penalising local councils financially for trying to meet local housing need, showing that the localism agenda this Government like to trumpet is in fact an illusion.
This Bill is just a logical extension of that centralising tendency and the downgrading in importance of affordable housing. Of course we want people to get on the housing ladder, but this Bill will not achieve that aim. There is nothing in this Bill that will compel developers to build homes at a price people can truly afford. What is labelled as a starter home in this Bill, at a cost of up to £250,000, is far out of reach for those whom we should be seeking to help. For those on the so-called living wage this pushes the dream of home ownership further away than ever. As we heard from my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe), starter homes will be affordable only for those on the living wage in 2% of local authority areas. We have heard a lot about the Government being for the 1%, so I suppose being there for the 2% is an improvement, but this is not a laughing matter; young people in small market towns like Neston cannot afford to live there because the starter home price in this Bill is already in excess of the average house price in Neston and well in excess of the average house price across the constituency as a whole. The scheme will in fact be counterproductive. The maximum values could quickly become the default position, because the greater the price, the greater the profit. Even if we accept that a focus on starter homes might be the answer, the Bill does not tell us how many will be built. That, too, is left to the Secretary of State to determine. In reality, it will be left to developers to call the shots, and we will once again be relying on the market that has so palpably failed us.
The greatest omission from the Bill is any kind of plan to meet the existing need for social housing. How is my council’s 25-year housing revenue account business plan going to stack up if it has to hand over unspecified amounts to the Government every year, on top of the multimillion pound drop in income that the imposed reductions in social rents will bring? How can it be right that housing associations will be able to enter into a voluntary deal on the right to buy—albeit with a gun held to their head—while the Government are saying to councils, “We’re just going to take money off you and spend it as we wish”? That is an abuse of power, and it shows a high level of contempt and disdain for councils. The Bill is a misjudged, rushed, contemptible, ideological, back-of-a-fag-packet disgrace, and we should vote against it tonight.
Jake Berry (Rossendale and Darwen) (Con)
It is a pleasure to follow the hon. Member for Ellesmere Port and Neston (Justin Madders). I know his area relatively well. It is near to where I was brought up, just over the water in the not-so-posh bit in Liverpool. I have been astonished to hear so many Opposition Members speaking against the Government’s proposal to reduce the rent of those living in social housing. Hundreds of my constituents have contacted me to thank me; they can see that the Conservative Government are on their side because they are reducing their rent and putting more money in their pockets.
I broadly welcome the Bill. It is an excellent piece of legislation. In my first speech on returning to Parliament after winning my constituency with an increased majority and an increased share of the vote, I mentioned my concerns about the bones of the right-to-buy policy. I pay tribute to the Minister for Housing and Planning for his engagement with colleagues across the House and across the sector, and for all the work he has done on this. We now have an exceptional change scheme, which is being welcomed by people across the housing industry.
I was on the board of a housing association, and I refer colleagues to the details of my other property interests in the Register of Members’ Financial Interests. I am extremely proud of the social housing industry, and extremely proud to be part of it. I am therefore very pleased that the Government have come forward with this solution, which will enable 1.3 million social tenants to benefit from the right to buy. Ultimately, when we stand up and speak in the House and decide whether to support a Bill, we have to ask ourselves whose side we are on. I come down on the side of the tenants who will benefit from a reduction in their rent and the tenants who want to exercise their right to buy and to realise the dream of owning their own home. I think that Opposition Members will come to regret the position that they have taken on social rents and on the right to buy when they find that hundreds, if not thousands, of people in each of their constituencies are exercising that right to buy.
The Government’s proposals on starter homes deliver on a promise to move from generation rent, which was a problem in the last Parliament, to generation buy. We have to accept that home ownership has fallen; we now have some of the lowest levels since the 1980s. I was doing a bit of research over the weekend, and I looked at the multiples of median incomes in my constituency. They were between three and six times earnings across the constituency. I think that is a pretty high barrier to home ownership, but I then looked at the figures for London, where the multiples of median incomes are up to 32 times earnings. That is a barrier that people cannot cross. That is why it is so important that we have this proposal for 200,000 starter homes, with a reduction of 20% for first-time buyers under the age of 40.
I also welcome the Government’s decision to create the design advisory panel. I have seen good design being sacrificed on the altar of cost on too many occasions, and I hope that the panel will enable us to build high-quality homes, with locally sourced materials, that are sympathetic to the local surroundings and that are fit for not only the first buyers but the second, third and fourth ones, and for generations to come.
I hope that, as the Bill goes through Parliament, we will take the opportunity to discuss other steps that the Government could take to enable first-time buyers and others to get over that high hurdle created by high property values and multiples of median income. I believe, for example, that they should look at shifting the burden of stamp duty from the buyer to the seller. This would ensure that, all the way up the chain, every single person who was buying would get a reduction in stamp duty and that first-time buyers would pay none at all. We talk a lot about the bank of mum and dad, but the vast majority of deposits come from people saving every month, perhaps using the Government’s new Help to Buy ISA. Stamp duty is not a mortgageable cost. I have spoken to people in my constituency, and many of them say that that extra stretch to pay the stamp duty can put them off buying, perhaps for another year. Unfortunately, house prices will have gone up in that period, meaning that they have to save even more. It becomes a sort of perverse positive feedback loop, with their having to save up for the extra stamp duty meaning that they put off buying for many years.
The only people who would lose out from stamp duty being passed up the chain rather than down it are those at the top who want to downsize. In a lot of cases— I appreciate that this does not apply to all of them—people who are downsizing have significant built-up equity that they have accrued from buying their present property perhaps 20 or 30 years previously. I hope that as we have this debate about how we can encourage first-time buyers, the Government will look at that proposal.
Finally, let me say that I support all the plans to tackle rogue landlords. In my constituency, an area of low demand, we have a problem with rogue landlords, so some of the provisions in the Bill are most welcome. I just appeal to local authorities across the country, particularly those in my area, to use not only these powers when the Bill is enacted, but some of the powers already in place to tackle rogue and absentee landlords.
This Bill is an excellent piece of legislation. We have come a very long way, and I look forward to supporting it in Parliament throughout all its stages.
Anna Turley (Redcar) (Lab/Co-op)
It is a pleasure to follow the hon. Member for Rossendale and Darwen (Jake Berry), who always looks to defend his constituents well. The points he made about stamp duty are thought-provoking and I appreciate his sharing them with the House.
The need to address the housing crisis in this country has never been greater. Rising demand, a chronic lack of supply and a woeful lack of long-term vision from the Government have ramped up the pressure in every region of the country. I am glad that the Government have brought this Bill to the House for us to examine and that they are finally showing effort to stem the crisis. It is a relief that they have woken up to the urgent need to build more homes, after five years of neglect, when house building fell to some of its lowest peacetime levels on record.
This Bill, however, does nothing to tackle some of the most profound problems the housing sector faces. For so many of my constituents, home ownership must become more affordable and more readily accessible, so that those looking to own a home can take their first step on the ladder. The Government’s attempt at solving that is their “starter homes programme”, which is at the forefront of this Bill. Anybody taking even a cursory look at the detail will reach a glaring conclusion: the homes are simply not affordable to those on ordinary incomes. Shelter has published information to suggest that families on the Government’s new national minimum wage—it is a minimum wage, not a national living wage—will be able to afford a starter home in only 2% of local authority areas. That raises the question: which bracket of the population is the scheme supposed to be assisting? We need genuinely affordable homes, not assistance packages which people who are currently frozen out of housing ownership are not going to be able to get anywhere near.
Although this Bill will do little to make the dream of home ownership a reality for those who want it, my biggest anxiety is that it will deal a fatal blow to social housing. The Bill aggressively promotes starter homes by forcing planning authorities to prioritise them over all other types of housing, such as affordable rented homes and social housing. That approach directly imperils the section 106 obligations of the Town and Country Planning Act 1990, measures which in the past decade have secured more than 230,000 affordable homes. Any endangerment of those provisions would be nothing short of a tragic loss of what should be referred to as genuinely affordable homes. Coast & Country, a housing association in my constituency, has just signed a deal with Bellway Homes to provide 13 new affordable rented homes on a site in Redcar. Under the measures in this Bill, those homes risk being side-lined. Maintaining a mix where truly affordable homes are part of developments must be a priority in any solution to the housing crisis.
On right to buy, the implementation of the so-called “voluntary” scheme is at best a poorly thought out policy and at worst a direct block to securing social housing. Housing associations have complained that the concept is flawed. We know from the performance of the earlier model that more than 30% of all homes sold in this way are now controlled by private landlords. Like many of my colleagues, I do not have an ideological problem with right to buy, but I fundamentally disagree with the hon. Member for Uxbridge and South Ruislip (Boris Johnson), who calls us “bourgeois lefties”. It is not bourgeois to object to the exploitation of a precious asset—a home—to push up rents and take the aspiration of home ownership further away by reducing supply. That provision will mean higher rents and higher spending on housing benefit, producing the worst outcome for tenants, housing associations and the Exchequer, as well as a catastrophic depletion of social housing stock, which will effectively be lost for ever.
Just as concerning is the costing. How is the voluntary right to buy scheme being funded? As the Institute for Fiscal Studies points out, the scheme has serious up-front costs, because housing associations will have to be compensated for sales below market value. The National Housing Federation estimates that if all of the eligible households decide to take up the scheme, it could cost an astonishing £11.6 billion. Even a casual analysis reveals a serious imbalance between the money going out fully to compensate the housing associations and the money we have been told is going to fund it, which will come from councils selling their most expensive properties as they become available. That scheme is estimated to raise about £4.5 billion.
We are barely six months beyond the election, and already we on the Labour Benches have stopped expecting the Government’s maths to add up. Clearly, ideology trumps economics. Once again, that can be seen in the 1% cut to social rents, which will lead to a £16 million shortfall in the next four years for my housing association in Redcar, thus affecting its broader services, such as tackling antisocial behaviour, supporting financial inclusion, and helping people stay in their homes. All of those services will be cut, shunting more costs on to other aspects of public services. It will also result in considerable job losses to my local housing association, which is one of the best and most secure employers in my constituency, particularly in the current climate.
Finally, I wish to touch on the pay-to-stay mandatory rents for high-income social tenants. This proposal is the latest nonsensical assault on working families that proves just how out of touch this Government are with the reality that thousands of tenants face. If the collective income of a household is £30,000, rents will be increased to market level. For a couple on £15,000 each—not much more than the national minimum wage—the proposal could be a total disincentive to work additional hours or seek higher paying employment. I ask the Secretary of State to clarify that point and to avoid the Government yet again taking money out of the pockets of hard-working people.
The Secretary of State started his speech today with a noble description of new housing as more than “bricks and mortar”. He talked about how the homes we build shape the lives and prosperity of the people who live in them. But why should my constituents give him any credit for such a statement when his Government persist with the wretched bedroom tax? [Interruption.] It is all very well for Members on the Government Benches to titter, but thousands of my constituents have been forced out—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I call Mr Geoffrey Clifton-Brown.
Geoffrey Clifton-Brown (The Cotswolds) (Con)
Mr Deputy Speaker, may I thank you for your unprecedented ruling that those of us who are latecomers to this debate will get more time? That is very welcome.
Mr Deputy Speaker
Order. May I just say that I did not make any changes to the time limits? I inherited the time levels.
Geoffrey Clifton-Brown
I should have perhaps said “the Chair”. Mr Deputy Speaker, I am grateful to catch your eye in this debate and I am delighted to follow the hon. Member for Redcar (Anna Turley).
This is an innovative Bill. It is a big Bill that will bring about a great change. It builds on this party’s great tradition of supporting those who aspire to own their own home. A Bill that potentially allows more than 1 million people to buy their own home from housing associations must be a good thing. I have listened carefully to many speeches from Opposition Members who have said that they support the right to buy in principle, but then there is a “but”. I cannot understand that, because if they support the right to buy in principle—presumably when a house is owned by the local authority—why do they not support it when a house is owned by a housing association? What difference does it make to tenants? I think this is a good Bill.
I have a difficulty in my constituency in that it probably has the most difficult affordability ratio in the south-west. I sympathise with those areas in London that have an even worse affordability ratio, so I support this Bill’s bringing forward more people able to buy their own houses. Above all, though, I support the provision of more affordable houses. I commend to my hon. Friend the Minister for Housing and Planning a scheme in my constituency where we use section 106 moneys to allow developers to put in trust to the local authorities part of the equity of the house, so that somebody, particularly a first-time buyer, can buy, say, a 60% ownership of the house and then staircase up to 100% ownership when they can afford it. That seems to be an excellent scheme.
Lots of Members have spoken in detail about the housing provisions in the Bill. As a chartered surveyor—I declare my interests in the Register of Members’ Financial Interests—I want to talk about parts 6 and 7 of the Bill, which relate to planning and compulsory purchase. Given that 80% of my constituency is designated as an area of outstanding natural beauty, Members will understand that I have a very difficult planning situation. None the less, I commend my right hon. Friend the Secretary of State for introducing the national planning policy framework. It has simplified the planning system and it is beginning to work really well. The problem is that it is a plan-led system, and my local authority, the Cotswold District Council, does not have a plan, and it has been using every sort of excuse for why it does not have one. The neighbouring council, Stroud District Council, which I partly represent, is about to get its local plan adopted and I congratulate it. I therefore welcome clause 99, which enables the Secretary of State to address the issue that 36% of local authorities do not have a plan. The problem is if an authority does not have a plan, it is subject to speculative developers. I warmly welcome the provisions on neighbourhood plans and making it easier for local communities to produce a local plan saying what type of developments should occur where in their neighbourhood.
I note that clause 102 changes the conditional and full system of planning consents as regards the technical stage and in-principle planning permissions. In Committee, we will need to tease out what will be allowed for the in-principle development and at the technical stage. For example, will a significant increase in housing be allowed at that stage? Clause 105 allows the Secretary of State to take over the planning function from local authorities when too many appeals have been disallowed. That power is fairly draconian and should be used only in sparing circumstances.
Let me move on to the compulsory purchase provisions. All businesses or individuals should, in every respect, be put back through compensation into the position they would have been in had compulsory purchase powers not been used. I appreciate that that is far-reaching, because anyone who can prove blight should be compensated, but everybody who makes a valid claim should expect a high proportion of their money to be paid in advance—about 80%—so businesses that need to purchase other properties can go out and do so. The Bill addresses the issue of interest rates for late payments in compulsory purchase and specifies a margin over base rate of 2%. The standard national conditions of sale usually presume a margin of 4% over base, which is what I would suggest to the Minister.
I serve on the High Speed Rail (London – West Midlands) Bill Committee and many of the petitioners have said a number of times that if the Government can afford these large infrastructure projects, they can afford to pay generous compensation for those that suffer. I welcome the fact that the Bill consolidates a number of old Acts providing for compulsory purchase powers and I ask the Government to make the provisions generous to those who have been affected by big infrastructure projects. If the Government do that, it will make it easier to build such projects as there will be less controversy.
I warmly welcome the Bill, which contains some very good provisions on housing as well as some good provisions to speed up the planning process. I urge the Minister to ensure that all authorities such as mine get a local plan as soon as possible so that they are not subject to builders submitting speculative applications where we do not want houses.
Melanie Onn (Great Grimsby) (Lab)
In north-east Lincolnshire, more than 4,000 people are on the waiting list for a home. Those families need a stable home in which to raise their children. Last year, just 180 properties were built in total in north-east Lincolnshire. If we carry on like that, it will take 24 years to accommodate those 4,000 people. The Bill does not address the underlying cause of the housing crisis in Grimsby.
The Government’s policy of selling off housing association stock without guaranteeing that it will be replaced looks set to make the problem worse. I grew up in a council house and believe that people having the opportunity to own their own home is absolutely right. Very few people have a problem with the principle of right to buy; the problem is with replacements and guaranteeing those replacements. The 4,000 constituents on the housing waiting list in my patch will ask whether the proposals in the Bill will mean that they can move into a suitable home sooner or whether they will be waiting even longer. I fear that they will be waiting longer.
Adapted housing is a particularly big issue in my constituency and I have been contacted by several disabled constituents who are not getting a home with the proper facilities that they need. The waiting list for adapting properties to meet disabled residents’ need is rising year on year and officials are changing the criteria to try to reduce the waiting lists. I am concerned about how many new properties will be built in the coming years. The Government need to set out clearly how the changes they have made to the local authority grants will affect councils’ ability to top up the adaptation grants.
I fear the unintended consequences of the Bill, particularly the impact of the 1% year-on-year cut in social rents. That is great for the people who are living in that accommodation, but it will have a significant negative effect on the services and support currently offered through local housing associations. Our largest affordable housing provider, Shoreline Housing Partnership, has just begun consultation on shedding 17% of the jobs of the people it employs. I cannot believe that putting 43 people out of work in my constituency is part of the so-called long-term economic plan. We are already the constituency with the 17th highest unemployment in the whole country. To echo the points made by the hon. Member for Glasgow Central (Alison Thewliss), this will mean cuts to additional services such as specialist crime prevention, sheltered housing, and tenancy support schemes needed by vulnerable tenants who often live in deprived areas.
The Bill includes measures aimed at encouraging development on brownfield sites, but in Grimsby most of our brownfield sites are situated on marshland. Any new developments on those sites have to be fitted with more expensive foundations and sufficient safeguards to protect against flooding. That means that the cost to housing associations for any replacement housing is 30% higher than regular costs. In addition, the low land and property values mean that accessing housing growth partnership funding is nearly impossible. Are the Government planning to make extra funding available to housing associations that need to make up the additional costs to developers? If not, our town will see a reduction in affordable housing as a direct result of the measures in this Bill.
Seema Kennedy (South Ribble) (Con)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests. It is a pleasure to follow the hon. Member for Great Grimsby (Melanie Onn). I applaud her passion on behalf of her constituents, but I suspect that our analyses of the Bill will be somewhat different.
I welcome this Bill. There are moral and economic imperatives for it, and it has very ambitious and wide-ranging aims. The Government have rightly identified productivity as
“the challenge of our time”
and have the aim
“that Britain becomes the richest of all the major economies by 2030”.
A major part of solving the productivity puzzle is the need to build more homes that people can afford to live in. I welcome this Government’s commitment to building 1 million homes by 2020. As we have heard from Members in all parts of the House, people want to own their own homes. Indeed, 86% of our fellow countrymen aspire to home ownership. Our population is ageing and growing, with more and more people living on their own. If we want people to be able to have a home of their own, it is absolutely vital that we build more.
This is a very wide-ranging Bill and other Members wish to speak, so I will limit my comments to reform of the planning system, particularly the aspects relating to brownfield sites. That reform was well overdue, as has been rehearsed in this debate, and what happened during the previous Parliament was very welcome. Before I came to this place, I practised as a property lawyer for 15 years, and then in my family’s property business, and I have seen at first-hand the delays that can occur because of the logjams put into the system through planning policies that are not implemented properly.
I am in no way advocating a “no holds barred, build anywhere” planning approach. The Bill’s provisions on planning strike a good balance between realising that we must have local planning, even down to neighbourhood level, and recognising that there are cases where central Government need to act to break logjams in the planning system. We all know places where local authorities do not have a local plan in place and may not have agreed one for many years. That often means that they are then prey to developers in the appeals process. Some councils have local plans that are up to 20 years old and take no account of the changing demographics of an area. It is absolutely essential that we rectify this situation. I welcome the powers in the Bill whereby the Secretary of State can expedite the agreement of local plans. I hope that the Minister can confirm that the new regulations will not unduly stretch the resources of planning departments.
The clauses of particular interest to me are 102 and 103, which relate to brownfield sites, because our business specialised in building on brownfield sites for both residential and commercial properties. It is a difficult process and all of us have recognised that it is a lot more expensive for developers to decontaminate land, rather than building on a green field.
Jake Berry
My hon. Friend spoke earlier about productivity in the building industry. Given her experience in this area, does she accept that development of brownfield land would create an opportunity for modular construction because of the ability to build on a concrete slab, which minimises the amount of decontamination required? Is this not a great way of driving more productivity in the construction industry, particularly through brownfield developments?
Seema Kennedy
That depends on the land. The hon. Member for Great Grimsby (Melanie Onn) spoke about marshland. There is no one-size-fits-all solution. It depends on the nature of the land, the flooding risk and the sort of contaminants present.
There is a great moral imperative to build on brownfield sites. I have the great fortune to have grown up in, done my building in, and now represent, as Mr Deputy Speaker will agree, part of the most beautiful county in our country—Lancashire. In Lancashire industrial towns lie adjacent to stunning countryside. We want to protect these green spaces. I know from personal experience that it can be done. As I have said, it is time consuming and can be expensive. It depends on the nature of the contamination and what is to be built, but more and more specialist companies are coming down the line with expertise in this area, which means that costs have come down and will continue to do so. The Campaign to Protect Rural England has estimated that nearly a million homes can be built on brownfield land in England. This means that not only will our green belt be protected, but, as the land has already been developed, there will be at least some infrastructure already in place.
I hope the clauses dealing with the system of “permission in principle”, which is similar to the zonal system in the US, will speed up the development of brownfield sites and contribute towards the aim of 1 million homes.
I particularly welcome the requirement for local planning authorities to have a statutory register of land, which should make it easier for developers and builders to identify brownfield sites and also give local people a sense of ownership, and reassurance that while homes are being built locally their beautiful green spaces are being protected. I would be interested to hear from the Minister whether he agrees with the Royal Institution of Chartered Surveyors that, along with the proposed measures, there should be a brownfield map—my hon. Friend the Member for North East Hampshire (Mr Jayawardena) referred to this—which includes privately owned brownfield land.
It is incumbent on us to speed up house building. If we want more people to own their homes and the prices of homes to go down, the ambitious aims of the Bill will help to achieve that and I will support it as it makes progress through this place.
Emily Thornberry (Islington South and Finsbury) (Lab)
I represent an inner London constituency. It is the most overcrowded in the country. We have very little green space. We love the little bit that we have, but all our development sites are brownfield sites. Despite the coffee bars and the Georgian squares, we have the third worst child poverty statistics in the whole country, and the gap between rich and poor is getting worse. Many of our problems arise from housing. Will the Bill help my constituency? No, it will not.
The Bill will damage the supply of affordable homes across the country, and in Islington its effects will be particularly severe. Much has been said about forcing local authorities to sell the higher-value homes. I have a great deal to say about that, but in the time available I will not do so today. I have much to say about the effects of a policy whereby an ordinary three-bedroom council flat would cost £520,000.
The Government ask rhetorically why higher earners should live in social housing at subsidised rent, and presumably it could be asked why higher earners should be subsidised to buy. The answer is that without a subsidy it is not affordable, but what is sauce for the goose is sauce for the gander. High earners are defined as households earning £40,000. In some areas where social rent is only 50% below market rent, the hike in rents would be hard to meet, but not necessarily impossible. In Islington, where private rents are more than 200% higher than social rents, this creates a major problem. Shelter has said that London renters need an income of £70,000 to make ends meet. What would happen to a Londoner who lives in a household with an income of between £40,000 and £70,000? What would happen to that group of people?
For example, what would the Chancellor say to a constituent of mine? She is a single parent of three and earns £32,000. Her eldest boy is about to start work at a fast food restaurant on the minimum wage, so he will take home £10,000. What would he counsel her to do—to tell the boy not to work, because otherwise their rent will double? This is not a policy of a party that calls itself the party of the workers. He cannot leave home, because there is no affordable housing available for fit young men, so what should the family do? The Minister should remember that we have 19,000 people on the housing waiting list in my constituency.
The second ill-thought-through policy is on starter homes. As I understand it, starter homes involve a subsidy of at least 20% for new homes for first-time buyers, and the homes must not cost the starter more than £450,000. How does that apply in the real world of my constituency? Let me explain. In Islington, we build about 1,500 new homes. That is pretty good going as we do not have a lot of space. At the moment, the biggest development is the 1,000 homes being built at City Road Basin, but a one-bedroom flat there will cost £860,000. Is that an appropriate starter home?
What is the answer? Should we have no starter homes—should we ignore a development of such a scale, and say that it should have no affordable homes of any sort—or should we put in a subsidy? The Government intend to put in a subsidy of at least 20%, but to bring the price down below £450,000, the person buying the home would presumably get a 50% discount. That will be pretty lucky for them when they sell it in five years’ time, because they would make a profit of at least £400,000. I must say that I do not criticise the person who would take advantage of that, but is there not a better way of spending money on affordable housing in somewhere such as Islington, which has 19,000 families on the waiting list and the third worst child poverty statistics in the country?
The truth is that in order to pay for a £450,000 flat, we are talking of a household income of about £100,000, with £100,000 of savings for a deposit if the household cannot get a 95% mortgage. The fact is that such people are already at the top of the list. They will already be in a position where they could buy a flat, so why are we giving them such huge assistance when we have such a housing crisis? I would be terribly grateful to the Minister if he listened to me, because I am trying to measure the Tory rhetoric against the reality for those whom I represent.
As I now have the time, let me say something about the sell-off of housing in my constituency. Housing associations will be forced to sell their housing. Will that be replaced within my constituency, or will housing associations simply take the money and run and build elsewhere? When my local authority is forced to sell off all new build that is being built in my constituency, what will happen? Will the Minister say how many social housing flats will be left in Islington in five years’ time? Frankly, the only affordable housing in a constituency such as mine is social housing for rent, because prices are so high that no one on an average income could live in an area such as mine without the assistance of social housing.
We have already had the nonsense of the Mayor of London saying that 80% of market rent is affordable; it is not affordable. With the new planning regulations and the priority being given to the new starter homes, the problem now is that no other forms of real affordable housing will be available in my constituency.
Kate Hoey (Vauxhall) (Lab)
Does my hon. Friend agree that fully mutual co-ops are a particular strand of all this? I have a very large number of them in my constituency. If they are not exempted from all three really difficult policies, the Bill will, quite honestly, crucify all our co-ops.
Emily Thornberry
I had not thought of that very serious point. I must say that that is another point on which we should get an answer from the Minister.
If the only affordable housing on brownfield sites that we have are these extraordinary starter homes—of up to the amounts that they are selling for, for the sort of people I have identified—for which planning permission must be granted, how is my local authority ever going to get the 19,000 families on the housing list into any form of affordable home? It is no wonder that the housing benefit bill is going to continue to go up in London. In the last five years under the coalition Government, it went up from £5.3 billion to £6.1 billion. How much worse will it get before the Government start taking seriously the idea that affordable homes in central London need to be social rented housing? There is nothing in the Bill that promotes social rented housing—affordable housing for my constituents.
About 40% of my constituents live in social housing. Where will their children go? They were born and brought up in Islington. Should they not be allowed to remain in the communities in which they were born? It is not fair.
This Bill is unfair. It does not look at the reality of inner London and it ought to.
Damian Collins (Folkestone and Hythe) (Con)
I support the Bill, which clearly has one ambition: to increase the supply of homes in this country—homes that are affordable to buy and affordable to rent. As such, it builds on the legislation that was passed in the last Parliament and seeks to address long-term problems.
As the Secretary of State rightly pointed out, the high point of house building in the last three decades was in 1988 and the low point in 2010. The number of homeowners in this country peaked in 2003 and has declined since. The Labour party presided over that decline for seven years without giving any answers to the problem. It is clear from the debate today that it still has no answers to the problem. On the challenge of affordable homes for social rent, which many Labour Members have touched on, the Labour party has set out no solution in this debate. If there is a vast sum of money that it has found or that it would print to support its policy, we would like to hear about it, but as of yet nothing has been said.
While I support the measures in the Bill, I will talk in the short time I have about the need for a revolution in the design and delivery of affordable homes to buy and rent in this country. I will look at the developing methods for the off-site construction of homes that can then be assembled. It is, if you like, a modern form of prefabrication. The hon. Member for Mitcham and Morden (Siobhain McDonagh) touched on the Y:Cube project in her constituency, which the Minister has visited. I believe that this could be an exciting concept for the future.
I recently met the architectural practice, Rogers Stirk Harbour and Partners, that designed the concept that was launched in Merton in September. It can design and build flats that can be rented out at 65% of market rent. It has a build cost per unit of about £35,000. The units can be rented out at about £150 a week. They are well insulated and well designed, so the energy costs can be as little as £10 a month. That is a massively different proposition from the costs associated with many new homes that are delivered to buy or rent in London and across the country.
The construction costs and times are substantially lower. The practice that developed the concept believes that it can take a new development of 50 flats from planning application through to people living in the block within 11 months. The usual time is more than 30 months for a development using the normal practices and methods. The assembly time for a unit in the factory can be as little as a week and the assembly time on site can be as little as a week as well.
This method clearly has the ability to deliver large numbers of properties at very affordable prices, very quickly. It can also utilise pockets of land, many of which are owned by local authorities, Transport for London or the Government, that are not attractive to commercial developers because of their size. Such flats or houses can be assembled off-site and then constructed on-site very quickly in small areas of land that would be uneconomical or difficult to construct in for traditional builders.
I know that the Minister has looked at this work in London, the site in Lewisham that the practice is looking to develop and at the modular construction concepts that have been developed in Manchester by Urban Splash. Is there more that we could do to incentivise this method of constructing new homes? Could there be further fast-tracking through the planning system to acknowledge the low level of disruption to local residents of constructing homes in this way? Could we look at the use of Government land to support such projects?
One of the great advantages of the off-site manufacturing process that I have looked at is that not only can the homes be brought in very easily, but they can be moved in the future. If the owner of a piece of land is not certain that they can commit to a residential development because it might have a higher commercial value in the future, they might commit to the construction of modular homes for 10 years or so which could be moved to a different location in the future. This very exciting concept could also sit alongside large developments. It is not unusual for a large commercial development scheme to take about 10 years to build, so modular units could also be constructed during part of that time.
These are not just temporary homes. As well as meeting all the building specifications for a normal build, they have an active life of 60 years and are mortgageable. Their purchase price could be as little as £50,000 or £60,000, and that is in London, not to mention elsewhere in the country. I believe they have the potential to revolutionise the delivery of affordable homes and they deserve greater scrutiny.
In the little time I have left, I want to touch on clause 103 and the list of prescribed brownfield sites, which has been addressed by other Members. Could the Government give guidance to local authorities that have brownfield sites with no existing or derelict buildings on them? It could be contaminated industrial land that is just sitting there because there is no requirement for it to be restored. Could land that was formerly used for industrial purposes, is not used for anything now and does not have any existing buildings on it be included on the list of prescribed brownfield sites? If the Minister could give me guidance on that when he winds up or at another time, that would be welcome.
I support the Bill, whose clear purpose is to increase the supply of affordable homes to buy and rent.
Peter Dowd (Bootle) (Lab)
May I say from the outset that I am grateful to Shelter for providing the information that enables me to take part in this debate? Few housing sector organisations have as much experience as Shelter in the matters addressed by the Bill, so it is well worth paying a good deal of attention to what it has to say. I act vicariously without speaking with its authorisation. It is fair to say that Shelter is concerned that, as currently drafted, the Housing and Planning Bill will unintentionally reduce the supply of affordable housing, although I think it is being very generous in its assessment by using the word “unintentional”.
First, I want to address the circumstances of families who face housing difficulties. Families who are unable to buy or access social housing may have no option but to live in the private rented sector, which is in need of urgent reform because it is not fully fit for purpose. The private rented sector is no longer the preserve of students and mobile professionals. There are now 11 million private renters in England, and one in four families in England is renting privately. Rising demand and a lack of supply are driving up the cost of renting. Sadly, a minority of landlords are exploiting the situation and renting out properties that are not in a decent condition.
Secondly, private renters are paying too much and are living in increasingly worse conditions. England’s private renters are spending a staggering 47% of their income on rent. The comparable figure for those with a mortgage is 23%, while for social tenants it is 32%. Nearly 30% of private rented properties in England would fail the Government’s own decent homes standard, compared with only 20% of owner-occupied properties. Some landlords know that either they will find tenants desperate enough to accept poor conditions, or they will rely on the fact that if tenants complain, local authorities do not always have the power or resource to take action.
The Bill contains proposals to crack down on some rogue landlords, but more can be done. The proposals could be strengthened to give a strong and clear signal to rogue landlords that renting out properties that are in a poor condition will not be tolerated. The message is simple: stop exploiting people’s vulnerability.
Mr George Howarth (Knowsley) (Lab)
Does my hon. Friend also accept that a small number of private landlords—this is certainly the case in my constituency and, I suspect, in his—use the private rented sector to launder the proceeds of crime?
Peter Dowd
All sorts of things start to come out of the woodwork when we look at the issues. The Government have to look carefully at the issue raised by my right hon. Friend.
Banning poor landlords from renting out properties is one thing, but breaching a banning order is another and it should be made a criminal offence.
Thirdly, as well as cracking down on rogue landlords, we have an opportunity to take a common sense approach to reform in order to protect renters and improve conditions. As a former chair of Merseyside fire and rescue service for many years, I am acutely aware of the impact of fire deaths and injuries on victims and their families. In 2013-14, there were 49 deaths as a result of electrical fires in homes—an increase on the previous year. The Government have an opportunity to bring that dreadful statistic down by introducing mandatory electrical safety checks. A simple change in the law would require private landlords to carry out electrical safety checks every five years. As has been mentioned earlier, the law already requires carbon monoxide checks. Behind every statistic is a person, a family, a life.
Shelter heard from a private renter who encountered dangerous problems in her flat as soon as she moved in a couple of years ago. She found the property was so dangerous she was at risk of electrocution. She said:
“During my first week living in the flat, I put my foot through the rotten kitchen floorboards. My landlord’s response was to put a bit of plywood over it. In addition to the hole in the rotten kitchen floorboards, I had water coming in through the electric extractor fan in the bathroom ceiling every time it rained. The ceiling around the electric extractor fan was perishing, there were leaks under the kitchen sink, under the bathroom washbasin and from a neighbouring property.”
She was told by the council that it was unambiguously dangerous.
That brings me to my fourth point. With almost half of renters—in my constituency, that amounts to about 3,000 renters—saying they have had problems with poor conditions or disrepair in the last year, we need to empower them to take action against landlords renting out unfit properties. My hon. Friend the Member for Westminster North (Ms Buck) has a private Member’s Bill seeking to reform the fitness for human habitation requirement. If her Bill does not succeed, or is talked out like the Hospital Parking Charges (Exemption for Carers) Bill, the Housing and Planning Bill will be another great opportunity to bring in this crucial reform. It would require a landlord to ensure that properties are fit for human habitation at the start of each tenancy and throughout the tenancy. The current systems—the housing health and safety rating system and the statutory repairing obligation—set out what condition a property should be in and what the responsibility of the landlord is, but they rely on overstretched local authorities first investigating the tenant’s complaint and secondly taking the appropriate action.
There are three practical measures the Government could and should introduce: first, change the law so that landlords are required to carry out five-yearly electrical safety checks—to be fair, many landlords already do this as a matter of course; secondly, reform existing law so that all private properties are required to be fit for human habitation—a dreadful demand to have to make in the 21st century; and, thirdly, enhance the rent repayment orders process by removing barriers to renters exercising their right by making landlords bear tenants’ fees.
Finally, I have heard comments tonight about brownfield sites. I could draw a circle around my constituency, and that would be a brownfield site. The idea of having a slab of concrete and putting a house on it would horrify most people in my constituency. It is not just about the industrial heritage. Many houses were built in a gerrymandered fashion, and the stuff used for the foundations was the cause of the contamination. We cannot just solve problems with a slab of concrete.
Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I have to reduce the time limit to five minutes, and I might have to reduce it further if we have more interventions.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests. I have a shareholding in a small communications company that I set up before I was elected to this place and which gives advice to, and sometimes opposes, developers, including in respect of public consultation.
I thank the Minister for Housing and Planning, my hon. Friend the Member for Great Yarmouth (Brandon Lewis), and the Under-Secretary of State for Communities and Local Government, my hon. Friend the hon. Member for Nuneaton (Mr Jones), for having visited my constituency in the last year. The Housing and Planning Minister met constituents of mine who were having difficulty with their development—something I will talk about in a moment.
I am also chairman of both the all-party parliamentary group for excellence in the built environment and the APPG for the private rented sector. The built environment APPG is undertaking an inquiry into the quality of design, while the private rented APPG is holding one into energy efficiency. I would like to point out that I am one of the few Conservative Members who represents a totally urban, inner-city constituency.
I very much welcome the Government’s target to build 200,000 new starter homes over the next five years, but to deliver it we need not only enough brickies, plumbers and electricians in the industry, but a speedier planning system. This means better public consultation and forcing developers to build the new homes fairly quickly once they have been granted planning permission. As I have said, I think that if the development is not brought forward within six months of a brownfield site being granted planning permission, business rates should have to be paid on the site.
Working commercially, I worked on a number projects that failed to get planning permission, partly because the client did not take any notice of what I was saying and also because they did not gain local community support. We need more master planning of developments. Taking local communities with us will, I firmly believe, quicken the granting of planning permission.
I am also a champion of what we are doing on the APPG for the built environment. We are going to have an inquiry into the quality of design, because I have had a number of constituents who have had problems with their new-build homes in my Plymouth, Sutton and Devonport constituency.
Buying a first home is probably the largest investment someone will make in their life. It is the first rung on the housing ladder and being part of the property-owning democracy. People expect the new home to be in tip-top condition and, being new, one would expect the various authorities to have checked it to ensure there will be no problems for a significant amount of time. People do not necessarily think that they need to have it surveyed before handing over the cash, as they expect the local council to have done its job.
Imagine, therefore, discovering a few months or a couple of years later that there are some difficulties. One would certainly not expect to have to produce a list of problems, as one of my constituents did—and it went on for three pages. While I very much welcome the Government’s investment into new-build at Devonport, I have been appalled at the brown stains that are already appearing on the outside walls of these new homes. Earlier today, I met the Royal Institute of British Architects, which wants to have equality of space, so that people can live in developments that have a suitable amount of space. While I was doing a project in the royal borough of Kensington and Chelsea, I was made very aware of the importance of children having space to do homework rather than having to share a kitchen-diner with their siblings.
Let me deal with the private rented sector. It is important to ensure that this sector delivers good quality housing to rent. If people are renting from housing benefit landlords who are not delivering housing of the appropriate quality, those landlords should be struck off the list immediately. In my opinion, this Bill is very much about making sure that we have suitable quality homes for today that will not become the slums of the future.
Daniel Zeichner (Cambridge) (Lab)
We have already heard from my hon. Friends about the negative impact of these proposals on social housing and their illogical nature. These points are well made, and I suspect that some Conservative Members will worry about the dangers ahead. I hope they will ask the Government to think again.
When the Government published the Bill, they said they wanted to transform generation rent into generation buy, but in reality they are creating generation get-by. For young people, this promises a bleak future, struggling to find a home of their own, and too often having to rely on parents either for a place to stay or for finance. That is bad for those young people, and often puts huge strains on families.
Some of these proposals make good quick-fix headlines, but their long-term effects will do real damage to our housing stock and to communities. Most damaging for cities such as Cambridge is this compulsion on councils to sell off their high-value vacant properties and hand over the revenue to the Treasury. This not only completely undercuts the principle of self-financing and the ability of councils to invest in new housing, but is a disgraceful broken promise to boot.
Cambridge city council spent years painstakingly piloting and then working up a long-term strategy to put their housing finances on a strong, sustainable footing. I know, because I helped persuade my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper)when she was Housing Minister to include Cambridge in the pilot over a decade ago. It took years to come to fruition, because housing finance is fiendishly complex, but it was finally settled, and it enabled Cambridge to develop a business plan stretching over three decades that would provide housing management services, maintain the stock in decent condition, and enable money to be invested in new affordable housing. The Bill, and the cut in rents proposed in the Welfare Reform and Work Bill, are combining to scupper all that hard work. In fact, they are violating what could well be considered to be a formal contract, and I would welcome an explanation from the Minister when he sums up the debate.
Cambridge county council and other authorities bought out their housing debt on the basis of careful forward planning, but that is now in ruins because of a rash, irresponsible change of policy that puts future financial planning in jeopardy—and this from a party that has the nerve to claim financial competence. It is worth noting that, whether the Government are stunning environmental investors with sudden about-turn policy changes on feed-in tariffs or investment institutions which learn that housing associations are now public bodies, their unpredictable actions are tearing up the rule book and leaving budgets, and promises, in tatters. Incidentally, they are also adding some £60 billion to the national debt. This is incompetence on an heroic scale.
Cambridge City Council estimates that the Bill will result directly in the loss of a quarter of our housing stock. Far from securing the city’s housing finances, as was planned, the Bill means that the financial projection is for it to go into deficit. That is where the Government’s so-called long-term economic plan takes us. What does this tell us about the Government’s commitment to localism and long-term thinking? To them, localism seems to mean saying, “You do what you’re told, even if we agreed something completely different last year.” Rather than hammering on with their catchphrases and soundbites, the Government should be hammering walls, and helping local authorities to build the genuinely affordable homes that are so desperately needed in this country.
Let me end by drawing attention to another pernicious feature of the Bill. The pay-to-stay proposal is about as wrong-headed as any housing policy could be. As will be confirmed by any research and any housing officer, what we need are mixed communities, but that is really hard to achieve. What does this proposal do? It makes it harder. When I look at estates in my city, I see communities strengthened by some wonderful, hard-working local people. I shall not name them, because others know who they are. I do not know how much they earn—nor, interestingly, does the council—but some households in cities such as Cambridge certainly have an annual income of £30,000, and I would pay them to stay. They are worth their weight in gold in their communities, and we should all pay them to stay rather than punishing them and encouraging them to go. What a disastrous policy! And what about the people who put in a few extra hours that take them over the £30,000? They are punished for doing more. This Government are the enemy of aspiration. [Interruption.] Think about it.
I sincerely hope that the Government see sense, rethink, and go back to the drawing board in respect of their housing policy. Of course my hopes are not high, because this is only one part of a much wider set of rotten and dangerous proposals. It is part of a package that is billed as reform, but it is not reform. It is vandalism, it is broken promises, and it is a tawdry way in which to run a Government.
Mike Wood (Dudley South) (Con)
Let me begin by drawing the House’s attention to my entry in the Register of Members’ Financial Interests as an elected councillor.
I was pleased to hear the Secretary of State speak about opportunity. Without affordable, decent housing, other opportunities mean little, and there is nothing more natural than people’s aspiration to own a home for themselves and their families. That is why it is so important to my constituents that the Government meet their objective of providing 1 million new homes by 2020.
This is a progressive, genuinely one nation Bill. It will help to increase supply while recognising the importance of our local environments, it will help to bring the possibility of home ownership within the reach of more of our constituents, and it will help to restore equity and fairness to housing and planning systems.
Just as in many hon. Members’ constituencies, my constituency has seen much development in the past 30 years. Situated on the border of the west midlands and Staffordshire, there is always a risk that more demand for housing will mean development into our green belt. That must be resisted. We must also resist the temptation to build on existing gardens, as previous Governments have done. Instead, the key challenge facing the west midlands is how we bring brownfield land into use, particularly contaminated brownfield land. Bringing such land into use, as Ministers will know, is a core part of the proposals for a west midlands combined authority. There is more than 1,600 hectares of vacant brownfield land in the west midlands, which would go a long way to meeting the extra housing capacity our communities need. The Bill will simplify the process of identifying and using available brownfield sites, alongside the £10 million fund available for councils to use brownfield sites to build new starter homes and the wider £1 billion brownfield regeneration package. It will increase supply, regenerate communities and safeguard our green belt.
Most hon. Members will remember the joy of the first time they picked up the keys to their home, hearing the lock turning in the door for the first time and making the place their own. Why should our constituents not feel the same way? The measures in the Bill are part of a wider package to promote home ownership and to make it more accessible, whether for social tenants or for young people looking to buy their first home, helping people to save for a deposit or to turn their social rent into payments towards their home.
The Bill will help to get Britain building. It will help to release the supply of land and increase the housing our communities need. The Bill will help the Government to meet their aspiration to build the homes our country needs, including 200,000 starter homes. Most importantly, the Bill will help to realise the aspirations of millions of people up and down our country to own a home of their own. I am proud to support the Bill this evening.
James Berry (Kingston and Surbiton) (Con)
We are all agreed in this House that there is a housing crisis in London. Demand massively outstrips supply and house prices are skyrocketing not just in real terms but in comparison to earnings. In my constituency, the median house price to median earnings ratio has increased from 4.83 in 1997 to 11.86 in 2013. With house prices averaging over £600,000, it is not difficult to see why for young people in Kingston home ownership is not a dream long-deferred, but perhaps a dream denied. We want young people to remain in London as a place to live, not just as a place to commute to for work.
The solution to the housing crisis in London—there was no dispute about this in all the hustings I attended before the election—is to build significantly more houses. The Bill provides an impetus for building starter homes and massively increasing home ownership. It is fair to observe, as Opposition and Government Members have, that not everyone will be able to afford starter houses. That is why the Bill is not an all-encompassing solution to London’s housing crisis. Starter homes have to be seen as part of a mix of new housing provisions, including schemes such as shared ownership and estate regeneration, which we are embarking on in Kingston.
The question is really this: where are we going to build all these houses? I am pleased that the Bill helps local authorities by identifying brownfield sites. In addition, that must go hand in glove with the work of the London Land Commission that the Mayor has tasked with identifying publicly owned land in London. It saddens me, in going around my constituency to my surgeries, to go past disused publicly owned land when we are crying out for affordable housing and land for primary schools. It is about time that Government Departments and quangos got out of the way and released this land that is lying fallow.
Labour Members have expressed concern that the Bill will lead to a reduction in affordable houses in London, so I will put my name to the amendment tabled by my constituency neighbour and the next Mayor of London, my hon. Friend the Member for Richmond Park (Zac Goldsmith), to ensure that that does not happen. The amendment will place a duty on the Secretary of State and the Mayor, working with local housing authorities, to achieve at least two units of affordable housing in return for the disposal of each unit of high-value social housing in London. We must ensure that at least two houses are built for every one that is sold, which is why I will be pleased to sign my hon. Friend’s amendment.
James Berry
I am sorry but I will not.
I reject the amendment tabled by the Liberal Democrats—I see that the eighth of the party that proposed it is no longer here—coming as it does from the party that talks a great game on housing and the vulnerable, but fails to deliver. Take the local authority in my constituency. The area was controlled by a Lib Dem council until 2013, yet it has one of the worst records for house building—including affordable house building—in London. What did the leader of Kingston Council until 2014 say about that: “Hindsight is a wonderful thing.” I think that is a shameful response to the 6,000 people on council house waiting lists in Kingston, and to young people who have grown up or come to my constituency to go to university but can no longer afford to live there. It is typical of a party that is quick to criticise yet slow to accept criticism.
Whatever the Government’s efforts to increase home ownership, it is inevitable that a large number of people will continue to rent. I support the Government’s intention to create a rogue landlord and letting agent database, and for London I encourage further devolution of that database to the Mayor, so that it works hand in glove with his efforts to accredit good landlords. I would like the Government to consider in detail the proposal by my hon. Friend the Member for Hornchurch and Upminster (Dame Angela Watkinson) to have a database for all landlords and letting agents—
Peter Aldous (Waveney) (Con)
The Government are right to plan to build 1 million new homes by 2020, to improve access to home ownership—particularly for young people with the building of starter homes—and to seek to speed up the planning system. The target of 1 million new homes is ambitious, and to meet it will be a challenge. To stand a realistic chance of success, it is vital that the Government use all resources at their disposal.
House builders large and small who build homes for sale, and the social sector—whether councils or housing associations—have a vital role. It is important not to forget UK pension funds and insurance companies that want to invest in the market rental sector. They have an increasingly important role to play, and the Government must provide them with a framework to ensure that they can play it to the full.
It is important and right to support people in their aspiration to own their own home, although demographic changes over the past 30 years mean that not everyone wants to buy their home—research shows that 37% of people do not intend to do so. Virtually all build-to-rent activity takes place in urban locations. That means that the sector has an important role in maximising the amount of brownfield land that is redeveloped, regenerating derelict areas in towns and cities, and revitalising our high streets.
Peter Dowd
Does the hon. Gentleman know how expensive it is to remediate brownfield sites? It can cost more than £1.5 million per hectare.
Peter Aldous
I was a chartered surveyor for 27 years, and the cost of redeveloping brownfield sites varies significantly around the country. The private sector investment in urban areas has played a role in regenerating Harlem in New York, and there is no reason why it cannot play a role here in the UK. It is being done in Manchester, where the city council has formed a £1 billion partnership with the private sector to build 6,000 homes, mostly for rent over a 10-year period. It is estimated that long-term capital of the order of £50 billion can be attracted to private rented new build in the UK. However, such capital is footloose and if we do not have the right policies so that these homes are built here, that capital will go elsewhere—to Tokyo, Berlin or Sydney.
There are two aspects of this Bill that need to be looked at closely to ensure they do not prevent private build-to-rent from realising its full potential. First, there is a concern that the requirements to include starter homes for sale in all developments could seriously impact on the sector. Thus, I ask the Government to consider granting an exemption from this requirement. There is a concern that the requirement to deliver starter homes as part of larger schemes could damage investment in the private rented sector as fragmented sites are much less appealing to investors.
Secondly, the “permission in principle” proposal in clause 102 is to be welcomed, although it is important to ensure that local communities continue to have a say in decisions that will affect them, and the need for high-quality design must not be overlooked. At present it is proposed that the “permission in principle” is only available to residential developments. While this is a good start, there should be a recognition that, on their own, homes are not enough.
Thriving communities need a mix of activities if they are to be a success. In order to create places where people want to live, there is also a need to have places for them to work, rest and play. Planning policy must reflect this if we wish to avoid the mistakes of the past, when too often housing development has taken place in a vacuum devoid of amenities, facilities and infrastructure.
In summary, the Government are to be commended on their ambition both on the wide range of issues that they are covering in this Bill and the target of 1 million homes. Many such targets have been set over the years and have then invariably been missed. To ensure that this is not another one that falls by the wayside, it will be necessary to use all the tools in the box. This means that the institutional private rented sector must be given every encouragement to work alongside the owner-occupier and social-rented sectors.
Kevin Hollinrake (Thirsk and Malton) (Con)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests.
I am delighted to speak in support of the Bill, which makes housing a key priority for this Government. I was interested that the National Infrastructure Commission also laid out that it is a key priority. Housing is infrastructure. Homes are the physical structures we need for the operation of our society and our economy, but we are not building enough—140,000 homes a year, when we need another 70,000 homes a year.
I wish to take issue with the shadow Secretary of State’s numbers. He seemed to think that there had been a decline in the numbers being built. There has actually been a 58% increase in the number of new starts annually since 2008, and starts are the key measure.
I also welcome the Minister’s commitment to deliver 1 million homes by 2020, which will have a huge direct and indirect economic benefit. There is a still greater prize: 25% of all people who live in poverty do so because of housing costs and a third of those in poverty live in the private rented sector. We have an opportunity to lift 3 million people out of poverty and give them the pride and security of owning or renting a home of their own.
However, we need to deal with two questions: who is going to build these homes, and where and what will we build? The larger developers are probably building enough homes to provide a return for their shareholders, so it is left to the small and medium-sized house builder to fill the gap, but also to local authorities and housing associations. Small and medium-sized house builders used to build 100,000 homes a year in this country; now they build 18,000 homes. Some 62% of small and medium-sized house builders say finance is their principal concern in their ambition to build more homes. Also, the banks have virtually closed for lending to small and medium-sized developers. The Government have tried to help, through the Housing Growth Partnership and the Builders Finance Fund, but do we need to go further, perhaps by establishing a help to build fund to help SMEs to get back into the market?
Local authorities and housing associations used to build 100,000 homes a year, but they are currently building only about 25,000. I believe that the extension of the right to buy will deliver more homes, as does the Chartered Institute of Housing, which believes that it will increase the number of homes sold and delivered by 30,000 a year over the next five years. Housing is infrastructure, and we have committed to spending £100 billion on infrastructure by 2020. If we were to allow just a small portion of that—a £2.5 billion annual grant—to be used for house building, we could deliver up to 120,000 new homes.
Where would we build those homes? Ideally, we would build them on brownfield land. There is to be a move towards a register of brownfield land, but I would suggest the establishment of a national land commission and a national register of brownfield land. We cannot build all those homes on brownfield land, however. Such building is complex: it requires remediation, there can be access difficulties and it is expensive.
So we also need to reform the planning process, which is slow and often under-resourced. The move towards compulsory local plans by 2017 and requiring local authorities to make more timely and more appropriate decisions is absolutely right, as is the granting of “permission in principle” for brownfield sites and for sites allocated to the local plan and the neighbourhood plan. We need developments that will meet local and national needs, and designs that we can be proud of which will improve the lives of those who live in them.
Chris Philp (Croydon South) (Con)
I, too, draw the House’s attention to my entry in the Register of Members’ Financial Interests.
I very much welcome the Bill, which comes in the finest Conservative tradition, going back to the days of Harold Macmillan. It is telling that the last five or six speeches have come from the Conservative Benches. Labour Members appeared to run out of steam some time ago. The Liberal Democrats appeared to do so some time before that.
The reason that we are facing this housing problem is that our population is growing rapidly, at a rate of 400,000 a year, mostly driven by immigration. That means that we need to build a couple of hundred thousand houses a year simply to keep pace with population growth. The shadow Minister, the right hon. Member for Wentworth and Dearne (John Healey), made some disparaging comments at the beginning of the debate about the Government’s record, but I would like to say that their record in this area is an extremely fine one. Indeed, during the right hon. Gentleman’s last year as Housing Minister, only 124,000 housing units were started across the United Kingdom, whereas in this past year, the figure had increased to 165,000 units. That is an increase of nearly 50%, of which the Government can be proud. As Mayor of London, my hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson)—[Interruption.] Yes, wake up! My hon. Friend has delivered 94,000 affordable homes during his mayoralty, outstripping his predecessor, the former Member for Brent East. So we have a record that we can be proud of.
The measures in the Bill on planning will enable the Government to go further by ensuring that the recalcitrant 35% of local authorities that have not delivered a local plan will do so by 2017. That will allow developers involved in minor applications, as well as those involved in major ones, to go straight to the planning inspector if they get a poor performance. There will also be a requirement for 90% of brownfield land to have outline planning permission by 2020. All those measures will increase supply.
Opposition Members spoke a great deal about affordability, and they were quite right to do so. There is a problem of affordability in London and across the UK, but the solution is quite simply to build more houses. That is basic economics, and the Bill has at its heart an intention to build more houses. As a London Member of Parliament, I particularly welcome the work of the London Land Commission, which is jointly chaired by my hon. Friend the Member for Uxbridge and South Ruislip and the Minister for Housing and Planning, which first met on 16 July this year. Their intention is to match the achievement of the Greater London Authority; 98% of its land has been brought forward for development and the LLC aims to do the same with other public sector land, including the 6,000 acres owned by Transport for London. I ask the Minister to consider going further and allowing the LLC to have more proactive powers to bring forward land for development itself, rather than simply identifying it.
I know that you are keen for me to sit down relatively soon in order to create room for the Front Benchers, Mr Speaker—[Hon. Members: “More”] Members are very kind. Let me briefly first endorse the social housing right to buy concept. Home ownership is a fundamentally good thing. It enables people to have a stake in our society and to invest in their own home. It enables them to prosper as house values goes up. Our proposal is a good one. Social housing providers have committed to replacing the units sold on a one-for-one basis, so this idea that social housing stock will get eroded is simply untrue. The total stock of housing will increase, because the social housing unit that has been sold will still be in existence. This Bill will increase the supply of housing and increase home ownership, and I encourage all Members to support it in the Lobby.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
This has been a very interesting debate on the Bill, with an unofficial London mayoral hustings thrown in for good measure. We can clearly see how important housing is for Members from the fact that 48 Back Benchers took part in this debate. The hon. Members for Hornchurch and Upminster (Dame Angela Watkinson) and for Ruislip, Northwood and Pinner (Mr Hurd), the right hon. Member for Arundel and South Downs (Nick Herbert), the hon. Member for Hertford and Stortford (Mr Prisk), the right hon. Member for Basingstoke (Mrs Miller), and the hon. Members for Kensington (Victoria Borwick), for Plymouth, Sutton and Devonport (Oliver Colvile) and for Kingston and Surbiton (James Berry) made a number of interesting suggestions as to how to make the Bill’s proposals on the private rented sector and starter homes more effective, to negate some of the more centralising aspects of the Bill and to improve the quality of housing that is built. I hope we hear more from them in Committee.
Not surprisingly, given the severity of the housing crisis in London, we heard from a number of London MPs, including my right hon. Friend the Member for Tooting (Sadiq Khan), my hon. Friends the Members for Poplar and Limehouse (Jim Fitzpatrick) and for Dulwich and West Norwood (Helen Hayes), my right hon. Friend the Member for Tottenham (Mr Lammy), and my hon. Friends the Members for Mitcham and Morden (Siobhain McDonagh), for Brentford and Isleworth (Ruth Cadbury), and for Islington South and Finsbury (Emily Thornberry). They raised their concerns about how measures in the Bill will not deliver more genuinely affordable homes, will further socially segregate communities and will leave too many Londoners in high-cost, private rented housing with little hope of ever owning a home in the area in which they wish to live.
A number of Members, including my hon. Friends the Members for Sheffield South East (Mr Betts) and for Birmingham, Selly Oak (Steve McCabe), the hon. Member for Westmorland and Lonsdale (Tim Farron), and my hon. Friends the Members for Stoke-on-Trent Central (Tristram Hunt), for Wolverhampton North East (Emma Reynolds), for Workington (Sue Hayman), for Ashton-under-Lyne (Angela Rayner), for Ellesmere Port and Neston (Justin Madders), for Redcar (Anna Turley), for Great Grimsby (Melanie Onn), for Bootle (Peter Dowd) and for Cambridge (Daniel Zeichner), provided a very effective challenge to what the hon. Member for Uxbridge and South Ruislip (Boris Johnson) said about housing problems existing only in London. They spoke up strongly on behalf of their constituents, saying that more good quality, genuinely affordable housing in properly planned and mixed communities based on local decision making is needed everywhere and that the Bill represents an attack on social housing and does little to make home ownership a reality for many people on low and middle incomes.
As Members from across the House are well aware, we are facing a housing crisis in this country. We have the lowest level of home building since the 1920s, completions have fallen off a cliff edge since 2010 and the housing benefit bill is ever increasing. We have seen five years of failure from the Government, and on the basis of this Bill I fear that we are about to see five more. Home ownership has fallen every year since 2010, declining by more than 200,000, whereas under Labour the number of homeowners increased by 1 million. Between 1997 and 2010, we built almost 2 million homes. As my right hon. Friend the Member for Wentworth and Dearne (John Healey) pointed out, in the year with the lowest number of homes built under Labour, 2009, we still built 125,000 homes. That is still more than were built in the year with the highest number of homes built under the Tories, which was 2014, when there were just 117,000 completions. Last year, the Tories built the fewest affordable homes for more than two decades—fewer than 11,000 homes for social rent compared with 33,000 in Labour’s last year in office.
Spending on housing benefit has risen by £4.4 billion since 2010, because of ever increasing rents. It is the same old Tory story: a 36% increase in homelessness and a massive increase in rough sleeping.
Dr Blackman-Woods
I am sorry, I would normally give way to the hon. Gentleman, but we are very short of time.
At least we on the Labour Benches recognise the scale of the task at hand. Current rates of house building in England are running at about half the level needed to meet existing and anticipated demand. We need to deliver an average of 240,000 to 245,000 homes per annum, of which 78,000 must be in the social sector, to meet housing need. That is a very long way from where we are at present, and measures in this Bill do little to address the task at hand.
Looking at right to buy, Labour is not against measures that would increase access to home ownership, but we have always said that the extension of the right-to-buy scheme to housing associations funded by the mass forced sale of affordable council homes is unworkable and wrong. It would lead to a severe and irreversible loss of affordable homes at a time when they are most needed, because there is no plan for a genuine one-to-one, like-for-like replacement.
According to figures estimated by Shelter, 19,000 council homes could be sold by 2020, with a further 113,000 at risk. In fact, since 2012, only one in nine council homes sold under the existing right-to-buy scheme has been replaced, so we can only estimate that the loss of socially rented stock will be substantial, with high-need areas of the country especially badly affected. The right-to-buy policy also leaves many questions unanswered, including whether all 1.3 million tenants will get the right to buy next year as promised.
We do of course also welcome the principle behind starter homes allowing those who can afford to do so to climb on to the property ladder. However, they are not, and should not be, a substitute for low-rent affordable housing. The proposals in the Bill to change planning obligations under section 106 agreements to prioritise the delivery of starter homes mean that they will simply replace the building of affordable rented housing.
There is a further problem with the starter home proposals. Put simply, starter homes are not affordable for many, even by the Chancellor’s own standards. A family living on the Chancellor’s new minimum wage of £9 an hour in 2020 would not be able to afford a starter home in 98% of the country.
The pay-to-stay measure to charge higher rents to some tenants is also extremely problematic. The very idea that a household income of £30,000 outside London, or £40,000 in London, is high is questionable at best, but as the income needed to sustain a basic standard of living varies hugely by household type—for example more income being needed for a family with two children than a single person—the proposals are ludicrous. We know from the Government’s own consultation that we are not the only people to think so. The Government’s 2013 consultation on pay to stay found that, even with much higher threshold levels, only 25% of respondents were in favour of the policy.
Labour supports measures in the Bill to crack down on rogue landlords and letting agents, but they fall far short of ensuring that England’s 11 million renters have a more secure, affordable home.
We wish to thank the Minister for adopting some of our proposals from the Lyons review, and the measures to speed up neighbourhood planning, to require local plans to be made, to streamline the compulsory purchase system and to prioritise building on brownfield land are to be welcomed. We have concerns about wider changes to the planning system and we will raise questions on them in Committee.
This Bill should be a Bill to tackle a crisis faced by thousands—a crisis in which people cannot afford a home, can barely afford their rents and, in the worst cases, are sleeping rough because they simply do not have a home. Instead, this Bill is an all-out assault on social housing, a smash and grab on council stock and a power steal from local authorities and councils. Under the previous Labour Government, home ownership increased, but it is falling now. The Bill does nothing to address five years of failure; indeed, it does not detail how a single affordable home will be built. Frankly, I am appalled that the Bill, which has 106 pages, does not mention homelessness once. We need a Bill that will increase the number of homes built across all tenures and I urge colleagues to vote for our reasoned amendment.
The Minister for Housing and Planning (Brandon Lewis)
I apologise now to the many colleagues—48 of them—who have spoken today as I will not necessarily get time this evening to mention everything that was said. It was a real indication of the strength of feeling. I was particularly pleased to note how many Government Members spoke whereas Labour ran out of speakers, which is indicative of where we are. That shows our strength of feeling and backs up our desire and determination to deliver the homes our country needs, as we showed by putting home building and home ownership at the forefront of our manifesto, the Queen’s Speech and this Bill. We are building to take our country forward, picking up from the legacy left by Labour. Despite the claims made by the right hon. Member for Wentworth and Dearne (John Healey) earlier, we must remember that when he was Minister for Housing there were just 88,000 housing starts. That was the base from which we had to rebuild.
I had high hopes when I started to read the reasoned amendment, as it started quite well. Unfortunately, it very quickly went downhill from there. I am delighted that the whole House has seen the right hon. Gentleman and other Members from all parties support our plans to tackle rogue landlords and letting agents. They say that negotiations should always start from the point at which the parties agree, so if the House grants the Bill a Second Reading tonight I look forward to warm and welcoming words for these measures in Committee and, I hope, some rather warmer words than those we heard today.
Members on both sides of the House have made strong speeches. My hon. Friend the Member for Hornchurch and Upminster (Dame Angela Watkinson) outlined a strong argument, showing her passion about ensuring transparency in the lettings sector by finding information about landlords through council tax forms to protect tenants. My hon. Friend the Member for Richmond Park (Zac Goldsmith), the next Conservative Mayor of London, rightly outlined his plans to ensure that we continue to deliver more homes for London than previous Labour Mayors, building on the work done by my hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) who, as Mayor, has delivered for London and exceeded the targets he has set himself.
I look forward to seeing the work that my hon. Friend the Member for Richmond Park will do over the next few weeks to ensure that we take things forward, working together. He has shown the difference between us and the Opposition, who have carped and moaned about the Bill without offering a single positive suggestion for what they would do for the housing market. My hon. Friends, exemplified by the next Conservative Mayor of London, have outlined a positive message for taking the housing market forward.
My neighbour, my hon. Friend the Member for South Norfolk (Mr Bacon), showed his passion for, and knowledge of, delivering the homes we need and seeing a growth in the custom-build and self-build sector. He outlined the importance of delivering for customers, the residents who buy and live in these homes. My hon. Friend the Member for Hertford and Stortford (Mr Prisk), the former Housing Minister, rightly outlined the importance of local authorities ensuring that they focus on their planning team. Those teams are vital to a local authority’s ability to deliver for the future and for local areas, ensuring that they are the heartbeat and economic regeneration driver of the council.
Kate Hoey
The Minister will know that I have the greatest concentration of fully mutual co-ops in my constituency, which is just across the river. Tonight, they all met at Coin Street, and they are very worried. Will the Minister assure me that fully mutual co-ops will be exempt from the right to buy, that he will work to ensure that they are exempt from the reduction in rent, which will destroy co-ops, and that they are exempt from pay to stay? That is really important, as people are really worried and we should ensure that mutual co-ops continue.
Brandon Lewis
Co-operative properties are among the categories for which housing associations can exercise their discretion not to sell their property to tenants. In the agreement, such tenants would potentially be able to use the new ability to have a portable discount that my right hon. Friend the Secretary of State outlined earlier.
My hon. Friend the Member for Bolton West (Chris Green) rightly talked about the importance of infrastructure in making sure that we are delivering to communities the infrastructure they need for the future. I appreciate and agree with the comments of my hon. Friend the Member for Peterborough (Mr Jackson) and others about the importance of achieving people’s aspirations through starter homes and of making sure that we have locally led system delivering with local plans.
My hon. Friend the Member for Kingston and Surbiton (James Berry) outlined the important work being done by the London Land Commission, which I co-chair with the Mayor of London, to make sure that we are delivering land across London. He rightly pointed out that it is important that we continue to deliver public land, right across the country, to reach and exceed the target of 150,000 homes from public sector land that the Prime Minister has rightly set for this Parliament.
We in this Government have a strong record in protecting those in the rental sector. We have made £6.7 million available to local authorities to identify and successfully prosecute rogue landlords and lettings agencies, and 40,000 properties have been inspected. It is nice to have the Opposition’s endorsement for the measures in the Bill to drive rogue landlords out of business. It is a shame, therefore, that the shadow Secretary of State’s reasons for opposing the Bill betray a fundamental misunderstanding of what the people of this country are crying out for—but that, I suspect, is why we got the result we did in the general election.
Brandon Lewis
No, I will not give way at the moment.
Eighty-six per cent. of people say that if they had a free choice they would choose to buy their own home. This Government were elected because the people of this country saw the evidence that we would give them that choice. This Bill underwrites that determination. The shadow Secretary of State says that it will not help people who struggle to own their home, but he is wrong. Let me remind the House of our record so far. Since the spring of 2010, over 230,000 people have been helped to buy a home using Government-backed schemes. I am sure that he will, at some stage, want to thank us for the fact that in his constituency housing starts are up by 57% since 2010. Help-to-buy schemes have already helped nearly 120,000 people to buy their own home. The help-to-buy equity loan has now been extended until 2020, helping a further 194,000 households. Forty-one thousand new shared ownership homes have been delivered. Now, because of this Bill, our ambition of 200,000 starter homes will become a reality.
This Bill will enshrine equality in the social housing sector. It will give the Government the ability to deliver on the side of aspirational, hard-working families. It will provide more people with opportunities to own their own home—that is more people with the financial security that a secure foundation of home ownership provides. I was pleased to hear many Labour Members outline their support in principle for people’s right to buy, and I hope they can convince their Front Benchers to take that forward.
Brandon Lewis
I am afraid not because we are so short of time.
The Bill will give this nation the fair housing market that it deserves. It builds on the 260,000 affordable homes built over the course of the past few years.
Emma Reynolds
In the previous Parliament, one of the Minister’s predecessors promised a one-for-one replacement of the right-to-buy homes sold, and the Government did not achieve that. Why should anyone believe that they are going to achieve it with their current policies?
Brandon Lewis
In congratulating the hon. Lady and wishing her a happy birthday, I say to her that her gift from us is the fact that, as my right hon. Friend the Secretary of State outlined, local authorities are already doing better than the one-for-one extra homes being built, and are almost at two-for-one in London. I use the words about building homes very cautiously and seriously, because this is at the heart of everything we do. We understand the importance of a home to people and their desire to have their own home.
We believe in having decisions made locally. The planning system should be driven by local people, for local people. That is why we want to facilitate speeding up and making easier further neighbourhood planning. It is why we have invested £22.5 million in the neighbourhood planning support programme, with more than 1,600 plans going through the process at the moment.
This Bill will change the way we think about our homes and the homes of our families. No longer will people be left behind, believing that a home to own is a dream for another generation, no matter what the shadow Secretary of State may say. No longer will a social tenant look at their neighbour exercising the right to buy and think, “Why can’t I do that?” No longer will councils and house builders grapple with a planning system that is too slow and does not deliver for local communities.
This Government were elected on a strong mandate to make sure that the homes this nation deserves are built where communities want them and need them. This Bill is proof that we are a Government of opportunity, choice and prosperity—a Government empowering the “generation rent” of today to become the “generation buy” of tomorrow. I commend the Government’s Bill to the House.
Question put, That the amendment be made.
Maternity Units: Bereavement Care
(9 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Will Quince (Colchester) (Con)
I am delighted to have secured this debate on bereavement care in maternity units, which stems from my own experience and from further research. I should stress that I am no expert in maternity or bereavement, but I speak from personal experience. In May 2014, my wife had her 20-week pregnancy scan, at which point an abnormality was identified. Further tests led to a diagnosis of Edwards syndrome. I do not want to go into the detail of my son’s condition, but Edwards syndrome is described as being “not compatible with life”, so we were well aware of the likely outcome. However, our son was clearly a fighter and he survived full term, to 41 weeks, but sadly, in October last year, he was stillborn.
As hard as it is to tell my story, it sets the scene for this debate and will, I hope, give the House a small insight into the experience of the parents of the 5,000 babies who are either stillborn or die within seven days of birth every year in England. It is difficult at the best of times to talk about death, particularly the death of children or babies. We all hope it will never happen to us. But there must be provision, facilities and trained staff ready, willing and able to assist families who find themselves in this awful position.
Jim Shannon (Strangford) (DUP)
I am pleased to be here to support the hon. Gentleman this evening. I realise that he is telling us a very personal story. The figures indicate that 11 babies are stillborn in the UK every day, which makes stillbirth 15 times more common than cot death. Does he agree that we need not only bereavement centres in hospitals but also the presence of someone from the Church to give spiritual, emotional and physical help at that time?
Will Quince
The hon. Gentleman makes a good point, and I thank him for his intervention. The chaplain at the hospital certainly gave us a huge amount of solace. They provide a really important service.
For my wife and I, our care was absolutely fantastic. I cannot praise highly enough the staff at Colchester general hospital who cared for us when we needed it most. The very positive experience that my wife and I had at Colchester represents the model I would like to see rolled out across the country. As the chance of our son being born alive was poor, we were booked into the Rosemary suite, a specialist bereavement suite at the hospital. Crucially, it was far enough away from the hustle and bustle of the maternity unit, with a room that the dad can also stay in and a lounge and kitchenette. It is as near as you can get to a home from home.
The suite gave me and my wife the chance mentally to prepare for what was to come. Importantly, it was away from the noise of crying babies and happy parents and families. It was a place to prepare but also a place to grieve in private, and somewhere that we could be with our son. Importantly, the Rosemary suite also had a cool cot, which is a piece of medical equipment that acts like a refrigerated cradle, so that babies who have died do not need to be taken straight to the mortuary. That means that parents and family members can spend as much time as they want with their baby. Sister Liz Barnes, the gynaecology nurse counsellor, gave us a huge amount of emotional support, both before and after the event. I cannot tell you what a comfort it was to have Liz with us, speaking to us and guiding us through the next steps and, of course, the funeral arrangements.
Having gone through that experience, I had assumed that every maternity unit in this country had a bereavement suite, but sadly that is far from the truth. I have heard shocking stories of a lack of compassion and care shown to parents of stillborn babies in maternity units. An article published in BMJ Open in 2013 on bereaved parents’ experience of stillbirth highlighted some of the problems in care for parents in some of our hospitals. The report carried interviews with bereaved parents and contained some very distressing responses. One mother said:
“They only left him with me for about an hour. Then they just took him away. I was begging them not to take my baby”.
Others talked of a poor experience with hospital staff. One said:
“I thought these people”—
midwives and doctors—
“knew what they were doing. I wish I hadn’t thought that now.”
Another claimed:
“The delivery was just awful from start to finish. They almost treated me like ‘the woman with the dead baby’. There was no sympathy. When I asked to see a doctor, this particular doctor came in and said, ‘We’re very busy.’ And his exact words, I’ll never forget them, “Well, with all due respect, your baby’s dead already’. Which was just the most awful thing you could say.”
Some highlighted a distressing rush to decision making. One mother said:
“I wish someone had said to me in those first few hours, ‘Even if you don’t want to see her now, you can see her in an hour or two. Or in a day or so’. I was left to believe that because I wasn’t ready to see her, that was final.”
Some of these examples are really hard to listen to, but there are also some very encouraging stories within the report. Some mothers spoke of the “very, very caring staff”. Another very movingly said:
“Even though she wasn’t breathing and she didn’t open her eyes, she”—
the midwife—
“still said you’ve got a beautiful baby girl. It just meant the world.”
I will remember until the day I die the midwife who helped me dress our son after he had sadly passed away, and she said, “You have a beautiful baby”. I will never forget that.
The report concludes that in these tragic situations, clinicians and hospital staff
“only have one chance to get it right”.
It also stated that the experience of stillbirth can be influenced as much by staff attitude and caring behaviours as by high-quality clinical procedures. Last month, a study said that the UK provides the best end-of life care in the world, but if we want to maintain this level, we should not forget end-of-life care for stillborn babies and those with very short lives. The impact of stillbirth and post-natal death on parents should not be understated.
As it stands, maternity bereavement care in English hospitals is patchy. A major survey by the bereavement charity, Sands, from 2010 highlighted that nearly half of the maternity units in England did not have a dedicated room on the labour ward for mothers whose baby has died. That is important because these rooms are where they cannot hear other babies, jubilant parents and visiting families. It is absolutely vital that more hospitals recognise the importance of bereavement suites and their role in easing the pain and loss of bereaved families. These bereavement suites should be separate from the main maternity unit.
Even though I was absolutely aware of the likely outcome when I entered the Rosemary suite in October last year, nothing can prepare you for the shock and the numbness that comes from seeing your wife give birth to a lifeless baby. The precious hours we spent in what I can describe only as beautiful silence afterwards helped me and my wife come to terms with what had just happened. No parent should have to face being taken to a room in a maternity ward of crying babies when you have just gone through a stillbirth.
Many charities, such as Sands, Cruse and The Compassionate Friends do a fantastic job in raising awareness of the support that should be provided to bereaved parents. Many of the bereavement suites in hospitals are actually partially funded and provided by the fantastic work of these charities. I know many bereaved parents, us included, raise money after their loss, knowing how valuable these suites are. I know there has been some progress made in this area. In 2013-14, the Government invested £35 million in new maternity equipment and facilities. That helped to fund nearly 20 new bereavement suites and areas to support bereaved families. There is also a growing recognition of the role of bereavement-trained midwives, and that is really important in helping bereaved families after stillbirth or infant death. In February 2014, the NHS published a report on the support available for loss in early and late pregnancy, which stated:
“There needs to be better recognition of the bereavement midwife role. Generally, these roles are not part of the original establishment. Trusts are beginning to recognise the value in having these specialised posts and they are becoming more commonplace.”
It is great to see trusts increasingly recognise the fantastic work that these specialist bereavement suites and the staff can play in these tragic circumstances. I know that my family were very grateful for the fantastic support that we received.
Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)
I thank my hon. Friend for making a very important and powerful speech, drawing on his own tragic experiences. I have seen such experiences in my own clinical work far too often. Does he agree that whereas we normally leave commissioning to the discretion of local commissioners, we should be pushing in the next mandate to NHS England for there to be standard commissioning for all clinical commissioning groups to ensure that all birthing units have appropriate bereavement space and facilities to look after women who have had a miscarriage or had a stillbirth?
Will Quince
I thank my hon. Friend for that. I could not have put it better myself. I recognise the work that he did when he was a Minister in this area, and the huge part that he played in that £35 million investment.
I wish to see the Department of Health do three things to improve maternity bereavement care in England: first, to carry out a full assessment of the state of maternity bereavement provision in England, including on the number of maternity bereavement suites in each of our maternity units; secondly, to work with NHS England and local clinical commissioning groups to raise awareness of maternity bereavement care; and, thirdly, to consider introducing guidelines that each maternity unit should have a specific maternity bereavement suite for families.
I hope that I have been able to do this matter justice in such a short period of time. Great quality maternity bereavement care had such a positive effect on my family and me. I want the great care that we received to be extended to many other bereaved families across our country. Ernest Hemingway is attributed with saying:
“For sale: baby shoes never worn”
Those words encapsulate in a brutally concise way the sadness of losing a child.
The NHS cannot take away the loss or the grief, but we can make sure that every parent has the time, space and environment in which to grieve in peace.
Antoinette Sandbach (Eddisbury) (Con)
It is a huge honour to follow my hon. Friend the Member for Colchester (Will Quince) who has spoken with such courage about the experience that he and his wife had with the birth of their son. I know that there are many parents who will have had similar experiences, and it is a testament to the support that he received during his son’s birth and death, which he spoke about so movingly, that he has the strength to speak today.
I am grateful to my hon. Friend for asking me to contribute to his debate. Certainly I would not be able to speak in this debate without the support that I received. The night my son died, I woke to find him not breathing. Arriving at hospital, after looking at a flat line in the ambulance for more than 20 minutes, a crash team was waiting for me, but it was too late. The consultant neonatologist was a calm and reassuring presence, and the nursing staff were patient. I readily agreed to a post mortem, as I wanted to know exactly what had happened. Staff at the hospital were wonderful, but I found myself in a plain room with questions being asked of me. I was told that I had to wait for the police. I had left in such a panic that I had left my telephone behind and I could not remember any telephone numbers, and I was there on my own. [Interruption.]
Mark Menzies (Fylde) (Con)
I thank my hon. Friend for giving way in what is a very, very powerful and emotional contribution. Does she agree that this Government are making great strides to help support parents who are at a very vulnerable point in their lives? I look forward to seeing her, during our time in this House, helping to move the debate forward.
Antoinette Sandbach
I certainly do agree with my hon. Friend, and I am very grateful to him for his intervention. That night, I was given a leaflet by the Chrysalis Trust, on which there were telephone numbers that gave me invaluable information about the help that I could access.
I arrived home later that morning to find police officers going through my house. Clearly, they had to investigate the death as it had been away from the hospital. I had to explain to my six-year-old what had happened. It was then that the advice in the leaflet came into its own, because it was made clear to me that I should not say that my son had gone to sleep. It was at that point that I realised that I would need additional help, as I did not know how to cope with what had happened. I called the number for the Chrysalis charity, and it organised counselling for me, which was a lifeline.
I owe a huge debt of gratitude to John from the Alder Centre at Alder Hey hospital, as there was no counselling available in north Wales, and the counselling that was provided was funded through the Chrysalis charity with the aid of a small grant from the NHS trust. The grant was subsequently withdrawn, forcing the closure of that charity.
The two hospitals that serve my constituency, Leighton hospital and the Countess of Chester, both have specialist rooms for babies who are known to have limited life expectancy following birth, with one-to-one-care offered. The support of those staff is invaluable and Leighton, which has an award-winning maternity department, has a trained bereavement midwife. For parents who suffer loss, however, counselling services can be accessed only via a referral from their GP. The Countess of Chester has the newly equipped Lavender suite, with a cool cot that allows parents to spend time with their baby, but a parent presenting at A&E or through the child unit would not have access to that suite. There is a full-time counsellor at the trust, but the workload means that it can be several weeks before a parent can get support. Both hospitals refer to Sands, which has volunteers rather than trained counsellors.
Bliss outlines that 41% of neonatal units nationally say that parents have no access to a trained mental health worker, with 30% of neonatal units saying that parents have no access to any psychological support at all. The Alder Centre offers 24-hour bereavement support and, as the centre has said to me:
“It is important to slow down the decision making to give parents the space in which to make informed decisions, it is vital to have that talking support with someone who can say to you it is alright, take your time.”
Fifteen babies die a day, and there are five deaths a week due to sudden infant death syndrome. That figure has been the same for the past 20 years.
Charities working in this field, such as Sands, Bliss, Group B Strep Support, the Lullaby Trust and Tommy’s, need data so that they can target their research and consider potential common factors contributing to our high infant mortality rates. I urge the Minister to ensure that the British Association of Perinatal Medicine guidelines are followed and that psychological support is available for parents who suffer a perinatal, stillbirth or sudden infant death. I am aware that the Government have made a commitment to put mental health services on an equal footing to physical health services. This area clearly needs careful consideration and a greater degree of concentration by clinical commissioning groups and NHS trusts. I know that there is a national perinatal epidemiology unit at Oxford and would be grateful if the Minister updated us on that and on what has happened to the NHS England plan to support those with counselling needs, the report on which was due to be submitted in March 2015.
Support for parents is arguably just as important, if not more important, when the dreams and hopes of a new baby’s arrival are shattered. The national standards exist, but it is vital to ensure that they are complied with so that every parent has access to the help and support they need.
The Parliamentary Under-Secretary of State for Health (Ben Gummer)
I thank my hon. Friends the Members for Colchester (Will Quince) and for Eddisbury (Antoinette Sandbach) for coming to the House and raising this important matter in an abnormally well-attended Adjournment debate. They are very brave to have shared their personal experiences, and not only the House but the nation will benefit from that. They have raised the issue just at the right time, and I hope we will be able to incorporate the larger part of what they have said in our policy formulation pretty quickly.
My hon. Friend the Member for Colchester said that he was no expert in this field, and I would beg to differ only with that part of his speech, as he surely is, as are his wife and my hon. Friend the Member for Eddisbury. My hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) brought his clinical experience to bear. It is clear from all their comments that there is much to do in this important area. I give an initial commitment that I will try to address all those things in the months ahead.
The description given by my hon. Friend the Member for Colchester of the care at Colchester general hospital is important in two ways. First, he described how care, when it goes well, can completely change what is a traumatic, horrifying experience not into one that is any better but into one that is manageable. Secondly, in relation specifically to that hospital, which has had very serious problems over the past few years, he described how committed and caring the staff are, and how that has shown through in an individual way. Indeed, the experience of Sister Liz Barnes and the rest of the staff at the Rosemary suite should be copied around the country by hospitals that on the face of it, and in other parts of their operations, are performing better than Colchester general hospital. I hope that my hon. Friend will be able to pass back to his hospital and to his constituents the very considerable thanks of the Department and others.
I read the British Medical Journal article, at my hon. Friend’s suggestion. It is a harrowing read. All the stories in it are, by turns, profoundly depressing, shocking and, to someone who is a new father, viscerally arresting, and also uplifting and very beautiful. It contains some very sensible advice about the need for time, for a culture of care, and for careful consideration of parents’ wishes, some distance after the death of a baby, to help us understand how better to look after those who are just entering that most awful place.
My hon. Friend’s first wish was that we look carefully again at the number of bereavement suites around the country. I have already asked officials to look at that. The numbers have increased somewhat since the 2010 survey, so we are now at well over half, but that is nowhere near enough. I will now, as a consequence of his raising this issue, ensure that we get a proper assessment of the number of bereavement suites. Already, all new-build maternity units will have a bereavement suite in the right place. In fact, I intend to toughen up the guidelines so that they are not so much a suggestion, specifically about proximity to the rest of the maternity unit, but something rather more forceful than that. I hope that in finding out how great is the extent of the lack of provision in other hospitals, we can do something to address this in the months ahead.
My hon. Friend raised commissioning and the work of NHS England and local CCGs. My constituency neighbour, my hon. Friend the Member for Central Suffolk and North Ipswich, made a point about the mandate. I will look at this carefully in the next few months. The date for the reassessment of the mandate is coming up shortly. However, the Government are undertaking a whole series of other policy initiatives in maternity and in end-of-life care, and this is the right moment to look at many of the issues that my hon. Friend the Member for Colchester and others raised so that we can get a response that is universal but also respects a lot of the different good work that is going on around the country. In producing a national set of guidelines and policy instruments, I want to make sure that we respect the fact that in different parts of the country organic solutions to these terrible challenges have grown out of local will. Those solutions must be respected and, indeed, spread. I would not want to stamp on that by issuing guidance that was too demanding.
My hon. Friend’s points about guidelines on maternity bereavement were expanded on by my hon. Friend the Member for Eddisbury in terms of counselling. She spoke powerfully of the need to provide equality of care at a distance after the event of a stillbirth or the death of a baby, which is not very usual in the national health service. She highlighted the fact that in some parts of the country this is being done well and in others it is not. That is precisely the kind of variation that we need to eradicate in dealing with the issues which both my hon. Friends raised. My hon. Friend the Member for Eddisbury correctly pointed to the study undertaken by the national perinatal epidemiology unit in 2014, “Listening to parents after stillbirth or the death of a baby after birth”, and I hope to be able to draw on the conclusions of that, which broadly support the point that she made, to see how we can eradicate that variation as quickly as possible.
Both my hon. Friends spoke of the contribution of Bliss, Sands, Tommy’s and other sometimes local charities that do remarkable work. In drawing up policy and guidelines, we need to respect that so that we maximise the enormous good will that there is in trying to help people through stillbirth and the death of a baby. The Minister for Small Business, Industry and Enterprise told me of a constituent of hers who had suffered a stillbirth and had started a fundraising campaign which, within weeks, had surpassed by 10 times the amount that she had expected to raise. That is the power of local bodies which, if we can energise and use it, will enable us to do so much more at a national level. In bringing all this together in the months ahead, I hope we will be able to release that energy, passion and commitment, so much of which is born out of personal tragedy, and that we will be able to do far more than I would be able to achieve in Whitehall or all of us would be able to achieve in this place.
Finally, the vocation of bereavement midwives was mentioned by both my hon. Friends. We are increasing the number of midwives. The mandate has been written in such a way—in part by my hon. Friend the Member for Central Suffolk and North Ipswich—and I hope that will lead to an increase in the number of midwives who have specialist training in bereavement. I will ensure that I get back to my hon. Friends the Members for Colchester and for Eddisbury with details of how that might be achieved.
Our efforts should go further than that. I spoke today to the chief executive of Health Education England about ensuring that there is training in all clinical areas on dealing with bereavement and providing palliative care. I hope we can do far more for all trainee clinicians, especially those dealing with maternity, so that there is a widespread understanding of the issues and it is not left to a specialist group, but is part of the general training in care that should lie right at the heart of our NHS.
The national health service does not mean anything unless we care for those for whom health is not the end point. It is the selflessness of care that should lie at the heart of our national health service because that is the foundation on which we build medical help. That is no more so than in this case where, at the point of greatest expectation of hope and joy, people experience the deepest sense of tragedy. Once again I thank my hon. Friends for making that plain to all of us in the House this evening, and I hope this might be an Adjournment debate with a difference—that it will produce a real outcome, from which they will hopefully draw some encouragement from what is otherwise an unspeakably terrible experience.
Question put and agreed to.
Draft Asian Infrastructure Investment Bank (Immunities and Privileges) Order 2015
(9 years ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (James Duddridge)
I beg to move,
That the Committee has considered the draft Asian Infrastructure Investment Bank (Immunities and Privileges) Order 2015.
It is a pleasure to serve under your chairmanship, Mr Gapes. The order was laid before the House on 12 October 2015. It gives authority for immunities, privileges, reliefs and exemptions to the new international organisation—the Asian Infrastructure Investment Bank—under the International Organisations Act 1968. Before I go into the detail of the order, I will set out some context with a few words about the bank and its links with the Government’s prosperity objectives.
The fast-growing markets of the emerging economies are becoming increasingly important to global trade, to British businesses generally, and to our values in the United Kingdom. The United Kingdom must, therefore, continue to play a significant role in developing the markets, as well as the global economy. Equally, we must expand into areas where we are economically under-represented. China is at the heart of some of that activity. The recent state visit by the Chinese President demonstrated the scale of the opportunities that lie in deeper co-operation between our two nations, and a key component of opportunity and growth in Asia is, and will continue to be, infrastructure. Satisfying that need is vital not only for driving growth but for increasing living standards across the region. It will benefit the whole global economy, creating new jobs, including for British business.
The UK has expertise in areas ranging from green investment, infrastructure and engineering to accountancy, finance and project management. Key to enabling effective support for infrastructure development in the region is ensuring that the Asian Infrastructure Investment Bank is well established as a high-quality and functioning international organisation, and that is why the UK has taken on such a strong role in supporting it. Our announcement in March of our desire to become a founding member was the first of any major western country. Germany, France and many others have now followed.
Richard Graham (Gloucester) (Con)
Does my hon. Friend agree that our early decision to become a member of the bank shows that our commitment to contributing to the economic development of more than 50 countries across Asia is strong? Does he also agree that that can only be good for British business in Asia, supports engagement with China, allows us to share our considerable experience across the region and is widely supported by business here?
James Duddridge
I could not agree more. Before coming to this place, my hon. Friend established a great tradition of working in that area, and he continues to leverage his expertise as a member of all-party parliamentary groups. I urge him to continue to do that, through his involvement with the fledgling development bank.
The order is part of the UK’s ratification process, and provides the privileges and immunities that will enable the bank to function as an international organisation in this country. It is part of the requirements laid out in the articles of agreement signed by the UK Treasury’s Commercial Secretary in June and is in line with the requirements of other international organisations of which we are a member.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
I apologise for the discourtesy of missing the Minister’s opening remarks. He mentioned other multilateral development banks. How does he see the new bank operating with the Asian Development Bank? One would think, instinctively, that there was some overlap or, if not, that there would be some sort of memorandum of understanding between the two. Does the Minister envisage that?
James Duddridge
I certainly envisage their working closely together, but equally closely with other international development banks, such as the European Bank for Reconstruction and Development, the African Development Bank and, to a lesser degree, the World Bank, which has a slightly different context and structure in relation to the order. There are plenty of development opportunities in the region and beyond, and I encourage all development banks and all Development Ministers across the world to work together. That is where the greatest rewards are, rather than in operating solely individually. Fundamentally, it is about operating collectively.
Mr Thomas
The Minister is aware that Mr Jin Liqun was appointed as the secretary-general of the multilateral interim secretariat of the new bank. Was Britain consulted on the appointment? Is it a genuinely interim one and, if so, will Britain be involved in the interviews for the permanent head of the bank?
James Duddridge
I cannot speak for the appointment process as part of the draft order. I am just setting out the basis on which those people will be employed. However, I am more than happy to look at the matter, if it is exercising the hon. Gentleman—as it appears to be doing. In relation to the draft order, I have made the comments that I wish to make and I therefore commend it to the Committee.
Catherine West (Hornsey and Wood Green) (Lab)
It is an honour to serve on the Committee under your chairmanship, Mr Gapes. I thank you for the opportunity to speak.
I welcome the strengthening of relations between China and the UK and see some merit in swiftly setting up this investment organisation. We agree that the UK’s commitment to the AIIB is a positive step to strengthen multilateral relations globally and to open investment opportunities for the UK. That said, I hope that the Government will take into account some of the opinions expressed in Committee to ensure that the UK’s commitment to the bank is based on a sound economic case that takes full account of social and environmental concerns and, importantly, delivers a fair and good deal for UK taxpayers and the local populations affected by the bank’s investment schemes.
I do not doubt the spirit in which the AIIB was set up, but I echo the concerns of my hon. Friend the Member for Feltham and Heston (Seema Malhotra) that there must be an assurance such that, when funds are invested in infrastructure schemes, those projects serve the interests of the populations affected by them. That is particularly important for projects in areas with high prevalence of poverty. The Labour party has a proud history of commitment to international development. I hope that the Minister will confirm that the UK’s investment in the bank represents a genuine commitment to international development, and is not simply a down payment for membership of a club.
The next issue is on the need for a multilateral response to climate change and environmental protection. It is welcome that clear efforts have been made to ensure environmental and social standards and the sustainability of the bank’s operation through the launch of a consultation process and the dossier subsequently produced, entitled “Environmental and Social Framework”, but concerns have been expressed that that policy-making process has occurred rapidly and narrowly. Rayyan Hassan, director of the non-governmental organisation Forum, based in Manila, commented that the bank’s environmental protection consultation wanted
“the entire world to comment on AIIB’s $100 billion safeguards. And they want to finalize it by December.” Historically, that is a short consultation period.
Given the lack of oversight, transparency has become a recurring theme with such large investment organisations. Has the Minister raised the issue directly with the AIIB secretariat? If so, will the Committee have the opportunity to scrutinise any representations made? Given that the UK has committed £2 billion to the AIIB, I hope that the Minister shares my view that it is vital for his Department to ensure that it is delivering a good deal for public-funded projects, especially given the Government agenda of austerity.
As a newly launched organisation, it is important for the bank to be able to integrate into existing global economic and political structures, working in collaboration with global stakeholders. The point made by my hon. Friend the Member for Harrow West was that we must not collaborate only with the World Bank, the IMF, the EU, ASEAN, the UN and so on. Will the Minister explain the exact mechanisms for how we, as a member of the investment bank, will operate in parallel to those organisations? How will he assure us that operations will be co-ordinated with and complementary to those existing organisations, rather than duplicative?
George Kerevan (East Lothian) (SNP)
There is much merit in the project, as others have said, and in the UK having an early involvement in it. In order for the project to fulfil its potential, however, we have to recognise some conflicts of interest, or at least potential ones. The Minister, in his reply to the hon. Member for Harrow West, was not clear enough about his or the Government’s response to that.
The Asian Development Bank, which has been in existence since the 1960s and of which we are a significant member, is funded or capitalised largely from Japan and, in its heyday, was seen mainly as a vehicle for Japan to invest across wider Asia in a positive way. However, it is at least conceivable that in setting up the new Asian Infrastructure Investment Bank the Chinese Government are setting up a rival to the Asian Development Bank, which might get the new bank caught up in the manifest tensions between the Governments of China and Japan in recent years. There is room for more than one bank and China investing some $50 billion to capitalise the project is positive, but it must not become a political football. We need assurances from the Minister that the British Government will use their good offices, even behind the scenes, to ensure that that happens.
The Chinese Government’s explanation for why they are setting up the new bank ties very much to President Xi’s project of a new silk road to strengthen the infrastructure and transport links between Asia and Europe. That is an excellent idea, but those links must not simply end in Germany; they must also reach the UK. What strategy or vision do the Government have to ensure that the bank plays its part in extending the new silk road to the UK?
I do not make my final point tongue in cheek, but the Minister perhaps ought to have words with the Treasury, because it is of course trying to sell off our own Green Investment Bank on the ground that capitalising it will limit the Government’s ability to reduce the deficit. In the same breath as selling a successful green bank which has achieved infrastructure investment in the UK in just the areas we have been discussing, however, the Treasury is providing virtually the same kind of money to be the British contribution to the AIIB. My constituents might find such priorities a little odd—we are closing down the green bank, which has its headquarters in Edinburgh, on cost and deficit grounds, but we can find the money to invest in an infrastructure bank in Asia. Possibly we can do both—that would be my preference—but I want the Minister to reassure me that the Treasury will not come back next week and decide to pull out of the AIIB on cost grounds.
Mr Graham Allen (Nottingham North) (Lab)
It is a pleasure to serve under your chairmanship, Mr Gapes, as always.
I am delighted to see colleagues with vast experience of international development in Committee—my right hon. Friend the Member for Cynon Valley, my hon. Friend the Member for Harrow West and the right hon. Member for Sutton Coldfield, who was a distinguished Secretary of State. I hope that they will take the chance to talk about the important question of immunities and privileges as far as it extends to the broader remit of what China is trying to achieve in its foreign policy goals, which we appear to be swallowing, sometimes without taking too much time to see what it is that we are swallowing.
Immunities and privileges are important in that regard. I do not want us to become the Chancellor’s version of an eastern powerhouse. We will be putting about £2 billion into the bank. Will there be a return domestically, in the countries that will benefit from the projects, and in our own UK economy? Will we get representation? Will the immunities and privileges in the draft statutory instrument be sufficient to safeguard the British interest? That is my anxiety about the helter-skelter speed at which some things are being done politically—though we all wish the Chancellor well, because we all wish Britain well when we enter such engagements—and at the parliamentary level. You know better than anyone, Mr Gapes, that such things need proper, careful, steady scrutiny. We ought sometimes perhaps to take a leaf out of the Chinese book. If things took several years to come to fruition, we would be able to understand them in much more depth. Many people, even in the House, are totally unaware of what the bank will do and how it will fit with existing institutions. If we asked the man and the woman in the street about the Asian Infrastructure Investment Bank, they would not have a clue what we were talking about, yet we are going to cast £2 billion into that bank.
One of the good things, and one reason why I am interested in hearing the former Secretary of State’s comments, is that the institution is still a moveable feast. We have seen a number of changes, even in the past six months, in the Chinese position, in respect of, for example, the representation and stakeholding, and what the functions of such an investment bank might be. I wonder whether the former Secretary of State in his private moments, or perhaps even in a pubic moment today, might ask about the impact of the bank, and of Chinese economic and foreign policy, on our overall strategy for international development and for helping people in difficulties—abroad, of course, but also in our own country. I will not stray into nuclear power or the demise of the steel industry because you would rightly call me to order, Mr Gapes.
The other people who have raised warning flags are our good allies across the water, in the United States. They have asked a number of questions and we have consequently seen movement on the Chinese side. The Chinese have not said, “No, we’re not going to listen. It’s this or nothing else.” In such a negotiation, it is wise to play it long and keep a number of other things on the table. We have to develop international institutions, particularly with our friends and partners in China and India, but we need to ensure, rather like the Prime Minister is trying to do in Brussels, that the shopping list is not a closed one but one that can benefit from interaction and negotiation.
Over several months, the United States has, in an unusual way, flagged up rather clearly—in terms of our international friendship—some of its anxieties about our being a little too eager to chase after the Chinese dragon and accommodate its demands rather than to hold out and strike a tougher dealer. It is not good enough to say, “We’re going to let China come in. We’re going to trade with China.” We need to be clear about what that means. It has implications for the immunities and privileges we are talking about. For example, are the privileges and immunities granted to staff members of the World Bank identical to those granted by the order? Are we duplicating the facilities of the World Bank and many other international institutions? Was the establishment of the institution an attempt to create a counterpart to the World Bank? Perhaps we have seen that one off for the moment, but I do not get the sense that the Government are particularly clear about what they wish to do in that regard.
Regarding the immunities granted to people who will serve the institution, we also need to be clear that they do not give carte blanche to operate exploitative relationships, particularly with people who endure difficult working conditions. There is a lobby today about the Trade Union Bill. There may well be places where there are no trade unions and where workers are exploited, and we need to ensure that the people who run the institution take that into account. Who are those people? Are they representative? Will they give infrastructure resource to other countries to help them to develop with one hand, while encouraging practices that we would all condemn with the other hand? The people at the top of the organisation need to be aware of and clear about the need to develop these institutions on a much fairer basis.
Mr Thomas
My hon. Friend makes an important point, not least because the history of Chinese infrastructure aid to many developing countries, important as it has undoubtedly been, has often involved Chinese labourers effectively being imported into the country where the infrastructure is being built as a quid pro quo for the investment. Surely we need to ensure that that cannot be achieved as part of the investment we are potentially committing to this bank.
Mr Allen
That is why this particular statutory instrument is very important. The shareholders, stakeholders and staff of this institution who are going to enjoy the immunities and privileges being granted to them by this statutory instrument need to be on full alert that this is not an attempt to just co-operate and to maximise the exploitation of the people working in various parts of Asia covered by the institution.
Richard Graham
Does the hon. Gentleman agree that the concerns he and the hon. Member for Harrow West have raised actually form part of the rationale as to why the United Kingdom should be involved? This is effectively a membership club, and the more members there are in the club who are like ourselves, France or Germany, the more likely we are to be able to exercise influence in how this infrastructure is invested to the benefit of the countries and the populations of those countries.
Mr Allen
The hon. Gentleman makes a wise point. There is always a balance between engagement and, in a sense, pushing away from countries in an attempt to penalise them for particular practices. We have all been through this in so many different fields with so many different nations, but here we have the chance for a lever. I am arguing, and my hon. Friend the Member for Harrow West argued very clearly, that we need to use those levers. We can still do that now because, as we have seen, China has retreated from its position of having a majority shareholding in this institution. It said at one point that no other non-Asian nations should be involved in this.
There is still flex and there is still time to manoeuvre. If we are too aggressive in our amorous approaches to China, they could take us for granted. They need a negotiating partner with a harder edge to move some of the broader ideas that we all share across the House on international development. We should not waste this opportunity by rushing too hastily to a conclusion. The hon. Member for Gloucester makes an excellent point: this could set a precedent for how we negotiate other things internationally. I do not want to go too far—
Mr Allen
In terms of the immunities and privileges we are talking about, those sorts of idea could be associated with things such as the international regulation of banks themselves, so that we have a global response and reaction. This could be a start in terms of ensuring that workers’ rights are respected. You will call me to order for mentioning this, Mr Gapes, but perhaps even the Robin Hood tax that many people have spoken about—
Mr Allen
So with your guidance and advice, Mr Gapes, I would like the Minister to respond to the question of whether there is still time and flexibility—as we have proven in the past six months—to negotiate slightly more firmly than we have apparently done in the past three or four weeks. We are being asked to deliver virtually anything and sign a blank cheque, which, I think, would be bad for our country. Above all, it would send a bad signal to those around the globe who look to Britain to stand up for workers’ rights and oppose gross exploitation of the sort that we have sometimes seen in Chinese businesses. The negotiations give us the opportunity to take the moral and ethical high ground, which we have not fully taken advantage of.
Mr Thomas
The people of Harrow West have always been interested in multilateral development banks, and they will certainly be interested in this new addition to the family. I want to pick up where my hon. Friend the Member for Nottingham North left off. One recognises the global Realpolitik that has clearly influenced the Prime Minister’s enthusiasm for contributing to this new bank, but one hopes that the Minister and his colleagues in the Department for International Development will, as my hon. Friend suggested, start to ask much tougher questions than those that the Minister suggested in the part of his opening remarks that I was able to hear are being asked.
Multilateral development banks have always been a cosy club. The Americans always get to pick the head of the World Bank; the Europeans always get to pick the head of the European Bank for Reconstruction and Development; and it is usually a Japanese national who gets chosen to be the head of the Asian Development Bank. There is therefore a sense that this new multilateral development bank is on the horizon partly because the Chinese want their own bank that they can control. That suspicion is fed by the appointment of Mr Jin Liqun, who seems to be the de facto chief executive of the new bank. I look to the Minister to give a fuller answer on whether he is there for a short or a long period, whether there will be interviews and whether Britain will be on the interview panel.
There is usually a series of vice-presidents to handle particular parts of a multilateral development bank’s portfolio. It would be good to hear a bit more about the structure of the proposed bank. Will there be a series of vice-presidents? Which countries does the Minister expect will provide the heads of the bank? Is this perhaps an opportunity for another Member from Nottingham to take up a position in the international development world? Is there a chance for Britain to hold one of the vice-presidencies of the new bank, given our significant contribution?
On staffing, given the scale of the spending that this multilateral development bank will presumably be able to make—very large sums of money will be committed to very large infrastructure projects—what will be the governance arrangements for those projects? Will Britain have a dedicated official and a team to support them, as we do at the World Bank and the Asian Development Bank, who will be able to go through the fine print of each proposed investment and pick through whether the environmental and social safeguards that the bank eventually signs up to are met in full?
Will there be a process by which Britain and others can raise human rights concerns, if there are any, about particular infrastructure projects? I ask that in the context of Sri Lanka, a country that certainly needs significant multilateral investment—the Chinese have been showing considerable interest in providing that—but where significant human rights concerns remain, particularly in the north and the east. It would be a tragedy if British investment in the new bank was inadvertently to reinforce through infrastructure spending the denial of human rights to particular groups in Sri Lanka.
Mr Allen
I am not sure whether my hon. Friend was seeking to nominate me for some sort of position in the bank when he mentioned a Member for Nottingham who could keep an eye on things, but modesty would forbid me from accepting such a role. There is a Member of Parliament for Nottinghamshire—the right hon. Member for Sutton Coldfield—who is eminently qualified to defend the interests of working people, as he ably did when he was the Secretary of State for International Development. He is too modest to get to his feet and acknowledge that, but he is in the Committee. Perhaps the Minister might think carefully about how we safeguard people in that position, because we have seen recently—
The Chair
Order. This is an intervention, not a speech. I would be grateful if the hon. Gentleman brought his remarks to a close.
Mr Thomas
I am grateful for my hon. Friend pointing out to me that Sutton Coldfield is slightly further away from Nottingham than I had initially realised. Being from London, we are sometimes a bit hazy about the distances between constituencies north of Watford. Indeed, the right hon. Member for Sutton Coldfield might be an excellent potential vice-president if the Foreign Office was willing to fight for him to get such a post. Perhaps the first thing would be to know whether Britain will have a chance of nominating one of the deputies or vice-presidents to that role.
As I was alluding to, some of the commentary about the new bank has pointed out that its byelaws require a 75% super-majority for major decisions. That will effectively give China a de facto veto on personnel and policy decisions. It would be helpful to know whether that commentary, which was issued at the end of June this year, is still accurate, or whether there have been changes to the byelaws. It would be a concern if we were simply to pump money into the organisation with the Chinese having a veto over all the big decisions, particularly if we had significant concerns about spending going forward.
The previous Labour Government were pushing for reform of the processes for appointing the heads of multilateral development banks. I do not know whether the right hon. Gentleman carried on that work, but it would be good to hear from him on that subject.
The Committee and the whole House are entitled to hear what reassurance the Minister can give us on this crucial matter. Sadly, there was often little opportunity in the House to debate the work of the multilateral development banks. All too often, debate took place only when major funding decisions were being announced. Can the Minister set out whether there will be a change in that regard? Given that it is a new institution, early scrutiny on the Floor of the House might be important.
Finally, the AIIB released draft environmental and social safeguards. A series of NGOs have expressed concern about those safeguards, and it would be useful to hear from the Minister whether Britain has taken any of them up and whether there have been any reforms of and improvements to the draft guidelines.
Mr Andrew Mitchell (Sutton Coldfield) (Con)
It is a pleasure to appear before you, Mr Gapes; I think that it is for the first time.
It is also, of course, a pleasure to welcome the Minister back to his place. While he has been away, I think a DFID Minister has been covering for him, and many of us would have expected this debate to have been conducted by a DFID Minister. It may well be that such is the synchronicity between the Foreign Office and DFID these days that he has been filling in for the Minister of State, Department for International Development, my right hon. Friend the Member for New Forest West (Mr Swayne), who I had expected to see here.
I will just make a couple of points, tempted and seduced as I have been by the hon. Member for Nottingham North, with whom I have sparred and indeed co-operated over the last 30 years, since we entered the House, although in my case I have broken service through an enforced sabbatical.
On the point made by the hon. Member for Harrow West, it is important to note that the appointment of Mr Jin Liqun, which many of us have welcomed, is an operating matter for the bank, and the role of Britain as a core and founder investor in the bank will be set out clearly in the shareholders’ agreement, as it is with the other development banks, in which, as the hon. Gentleman will know very well, Britain takes a leading part. That will be what determines whether or not Britain was consulted. However, the reasons why my right hon. Friend the Chancellor decided—rather bravely, I think—to be an early investor in the bank are absolutely the right ones, because this is clearly going to be a major feature on the development landscape. Britain has skills and advantages to bring to the table of what I hope will be one of the most successful of the international development banks.
It is no secret that in the developing world there was irritation when Jim Kim was appointed as head of the World Bank. That was not because there is anything wrong with Jim Kim—he is an excellent leader of the bank—but because it was not open to international meritorious competition. As has already been alluded to, it was part of the stitch-up that means that the Americans appoint the president of the World Bank and the Europeans appoint the president of the IMF. We need to move beyond that now. I cannot reveal the workings of Government over the appointment, but the hon. Member for Harrow West may be certain that there was considerable discussion about that appointment. There was an outstanding deputy head of the World Bank, Ngozi Okonjo-Iweala, who was a candidate, and we need to move beyond that old deal and ensure that the next head of the World Bank is appointed by a full, meritorious trawl of everyone who is available, so that that particular concern is removed.
The Minister is absolutely right to express Britain’s strong support for this bank. It will be part of the architecture from which the poorest people in the world will increasingly benefit, as the work of all these development banks becomes more directly attuned to that core purpose. I very much hope that the Committee will welcome the decision by Britain to be part of this bank. It is part of Britain’s leadership on international development, and it is most welcome on that account.
Ann Clwyd (Cynon Valley) (Lab)
It is a pleasure to speak under your chairmanship, Mr Gapes. Normally, we are on another Committee together, but I am very pleased to see you on this one.
I have one or two questions for the Minister. Paragraph 7.5 of the explanatory memorandum says:
“Her Majesty’s Treasury has policy responsibility for the Bank.”
I would like him to explain what “policy responsibility” means.
Paragraph 7 of the explanatory memorandum says that
“the Bank will focus largely on investment in infrastructure sectors such as transport, energy and water across members of the bank from that region.”
I notice that one of the countries that have already signed the agreement—one of the 57 prospective founder members—is Myanmar. One thinks of the needs within Myanmar, particularly the needs of people such as the Rohingya, who are being persecuted in that country, and whether they will be considered when infrastructure investments are made in transport, energy and water. If policy responsibility means influencing decision making, as I assume it does, I would be interested to hear the Minister’s plans.
James Duddridge
First, in summarising the debate, I thank my hon. Friend the Member for Sutton Coldfield for his comments.
James Duddridge
I am terribly sorry to have insulted my right hon. Friend so early in my speech. I apologise profusely. He suggested that I should be working closely with the Department for International Development, which I certainly am. Today I stand here as a Foreign Office Minister with responsibility for protocol. However, I would like to work much more closely across a number of subjects with my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps), who kindly deputised for me when I was ill for much of the last year.
I will try to deal with all the points that have been raised in this debate in broad themes. I will touch on individual points, mentioning individual Members, as and when. A number of Members brought up social and environmental issues, and the UK has been involved in discussions on those subjects from an early stage. The UK has encouraged the bank, and members of the bank, to consult widely, and Her Majesty’s Government have specifically had discussions with NGOs—those discussions will continue—on how the bank will operate and on the bank’s standards on social and environmental issues. There have not been specific discussions on the projects that the right hon. Member for Cynon Valley mentioned, but there are wide-ranging discussions encompassing all the issues, including human rights.
The hon. Member for Harrow West asked about the interim appointment. I confirm that Britain was consulted on that, and an election is expected for the full-time appointment. He probed me further on governance more generally, and I confirm that there will be 12 non- resident board members. How they will fit geographically, and the areas they will cover, are still being negotiated. Additionally, there will be a number of vice-presidents, but I remind him that a lot of these development banks have many members—in this case, there are already 57 members. However, Britain is well placed, given the Chancellor of the Exchequer’s early entry.
The policy lead will be through Her Majesty’s Treasury—this issue has been raised by a number of Members—and we will maintain a strong influence, but the exact positions both of the non-executive board and of the vice-presidents are still to be negotiated. However, I note that both in the time of the hon. Member for Harrow West and in current times we have strong experience of multilateral development, and we are well placed to assist the bank.
Mr Thomas
Is the Minister aware of any non-Chinese candidates for the permanent position heading the bank? Why does the Treasury have the policy lead? Given that DFID has responsibility for multilateral development banks, why has this particular bank been taken out of its control?
James Duddridge
The bank has not been taken out of anyone’s control. The Chancellor has been close to this work, which is perhaps why it is a Treasury lead. I have not been involved, so I am not aware of specific candidates in the longer term. As Minister with responsibility for protocol, I have looked at the governance issue in relation to immunities, privileges, reliefs and exemptions and what that might mean for different individuals.
The question of shareholding gives me an opportunity to address the super-majority. China will have the largest share capital, which translates to a voter shareholding of 26.1%, so the hon. Gentleman is right in his assertion that there is a blocking super-majority. However, the combined shareholding of non-regional members is higher than the Chinese holding, at 26.7%. In relation to the Asian Development Bank, I understand that there is an ongoing discussion about a memorandum of understanding between the two banks.
The hon. Member for East Lothian raised some concerns about the Japanese, and subsequently the hon. Member for Nottingham North raised similar issues about the US position in relation to this bank. The US was initially sceptical but it would be fair to say that its tone has softened over recent months, particularly after the recent Chinese state visit. The US acknowledged the contribution that this new bank could make. It is very much not a zero-sum arrangement. This will be a beneficial addition to the piece.
Richard Graham
The Minister makes a number of important points about the governance of the new AIIB. Is there an opportunity for this new bank to be headquartered in Hong Kong, which has the advantage of Chinese sovereignty and the strong rule of law that might give it the credentials needed to play an important part in infrastructure developments across Asia?
James Duddridge
The point of the order is to lay the foundations for the bank to operate across our jurisdiction in the UK, rather than to draw reference to where it might have other headquarters or regional headquarters.
James Duddridge
I cannot immediately confirm the location. However, if I am inspired later in my speech, I will clarify that point for the hon. Gentleman. Other hon. Members raised the issue of trade unions and the exploitation of workers. Specifically, labour rights have been and continue to be considered as part of the environmental and social standards that are being negotiated.
In relation to questions from the hon. Member for Nottingham North about the man in the street—clearly the people of west Harrow are better educated on multilaterals than those elsewhere—I gently suggest that perhaps the man on the street or the man on the Clapham omnibus would not know about the intricate workings of the European Bank for Reconstruction and Development or the African Development Bank, which are two similar institutions that do great work.
I said that I would return to the hon. Member for Harrow West on the location of the headquarters. Evidently, the location has already been decided to be Beijing.
The hon. Member for Nottingham North asked about the speed at which we should move. We have moved quickly and we did that deliberately to co-ordinate with an opportunity. The Chancellor has been a visionary in that regard, which will be good for the region and for the UK.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Asian Infrastructure Investment Bank (Immunities and Privileges) Order 2015.
DRAFT Representation of the People (England and Wales) (Amendment) (No. 2) Regulations 2015
Draft Representation of The People (Scotland) (Amendment) (No. 2) Regulations 2015
(9 years ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Secretary, Cabinet Office (John Penrose)
I beg to move,
That the Committee has considered the draft Representation of the People (England and Wales) (Amendment) (No. 2) Regulations 2015.
The Chair
With this it will be convenient to consider the draft Representation of the People (Scotland) (Amendment) (No. 2) Regulations 2015. I will ask the Minister to speak to both the instruments. At the end of the debate, I will put the question on the first motion and ask the Minister to move the remaining motion formally.
Tommy Sheppard (Edinburgh East) (SNP)
On a point of order, Mr Hamilton. I am in favour of discussing both statutory instruments together; it is commendably efficient, and I support both of them. However, under the amendment to the Standing Orders made last week concerning English votes for English laws, is it appropriate for me, as a Scottish Member, to participate in a decision about statutory instruments pertaining to England and Wales?
The Chair
I am advised that the changes have not had any effect on delegated legislation Committees thus far, so every Member is entitled to vote on every delegated legislation Committee for the time being—and, of course, we are debating an amendment for Scotland as well.
John Penrose
It is a pleasure to have you looking after us today, Mr Hamilton. I reassure the hon. Member for Edinburgh East that he is not only welcome but entitled to speak and vote on this secondary legislation.
The Committee will be aware that individual electoral registration, or IER, was successfully introduced last year, enabling for the first time people in Great Britain to apply online to register to vote. Since then, nearly 12 million people have applied to register under IER, three quarters of whom have applied online. I recently spoke at Policy Exchange about the vision for future electoral registration, maximising opportunities for a complete and accurate register, and ensuring that as many of our citizens as possible can participate in our democracy. People rightly expect digital services to be built around them, and we want to do that, making the system as efficient as possible while driving down costs. The regulations are a modest step towards that future.
The regulations will remove the requirement on applicants for electoral registration to provide their previous name if it has changed in the past 12 months. Instead, they allow applicants to provide their most recent previous name if they wish; it is no longer mandatory. The Electoral Commission is required, when designing the application form, to provide a space for non-mandatory provision of the most recent previous name, and an explanation of the fact that if previous name details are not provided, additional personal information may be required to verify the application.
Secondly, the instruments make changes to the correspondence required to be sent by electoral registration officers to electors and applicants for electoral registration. Thirdly, the regulations update the electoral register application form and the annual canvass form to bring them in line with changes made by the Criminal Justice and Courts Act 2015 to the jury summoning age in England and Wales, to ensure that the correct information for jury summoning is collected on the electoral register. They also authorise electoral registration officers in England and Wales to inspect marriage records in order to improve the accuracy and completeness of the electoral register. Finally, the regulations make a minor, consequential amendment relating to the provision of personal identifiers for postal voting.
The changes are relatively minor and technical and, I hope, are therefore relatively straightforward. I do not propose going into huge amounts of detail at this stage, although I am obviously happy to answer any questions that Committee members have. I commend the regulations to the Committee.
Wayne David (Caerphilly) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hamilton. The amendments in the regulations, although relatively straightforward and modest, are important, and I would like to put a few points to the Minister and hear his response. Generally, we are supportive of the changes; we think that they make practical, good sense. I also welcome the fact that there appears to have been a wide measure of co-operation, co-ordination and advice given and taken by the Government.
I am particularly pleased that there appears to have been a fruitful co-ordination with transgender organisations, which expressed concern about the Government’s initial suggestions. Is the new formulation that the Minister is presenting in the regulations acceptable to the transgender organisations that initially made representations of concern?
My second question to the Minister arises from the concerns expressed by the Electoral Commission. As we unfortunately saw during the efforts to bring forward the date of IER’s full implementation, the Government do not always take on board the Electoral Commission’s advice, even though it is well-meaning and well-founded in fact, but it seems that on this occasion at least, the Government have taken on board the commission’s worries. I would like to press him slightly on that.
I understand that the Electoral Commission made three observations, to which the Government have responded. The first concern was about the suggestion that no formal communication need be issued where the ERO has determined that someone has ceased to satisfy conditions for registration. I am slightly concerned about that. I understand the Government’s desire to reduce bureaucracy and paperwork, but clarification is necessary.
Another concern was that when there are formal objections to a registration application, the objector will not be informed of the result of their objection. That is a little strange. There cannot be that many objections by individuals or organisations to people being on the electoral register; they should be informed of the outcome of deliberations, especially if they have been involved in the hearing. The Electoral Commission has other concerns, but I would respect the Minister if he could give clarification of what he has said to the Electoral Commission on those points.
The situation in Scotland might be dealt with separately, but it makes sense to raise it at this point in our discussion. The Scottish Government have expressed concerns that apply to both the English and Welsh situation, as well as the Scottish situation.
The Chair
May I clarify something for the shadow Minister? We are taking both the regulations together, so we are discussing the relationship to Scotland as well as to England and Wales. Scotland is highly relevant.
Wayne David
Thank you, Mr Hamilton. I have a general request for clarification from the Minister. A large number of measures regarding electoral arrangements are devolved to the Scottish Government. Has the Sewel convention been put into effect here? If it is necessary for whatever reason—perhaps to maintain a degree of uniformity and coherence—for the UK Government to make legislation applying to the Scottish Government, was a formal submission made by the Scottish Government under the Sewel convention? That is a general point.
On the detail of the proposals before us, will the Minister respond to two points made by the Scottish Government about both sets of regulations? The first concerns a need expressed by the Scottish Assessors Association and the Electoral Management Board for Scotland, bodies with which I am not particularly familiar. They made the point, echoed by the Scottish Government, that they are slightly concerned about the need to reduce communication, and about the stipulation that those who have made submissions expressing concern about people being on the electoral register will not be informed of the result of deliberations.
The Scottish Parliament had a more general concern that the Government were perhaps putting fiscal constraints and the need to save money ahead of the need for clarity and as much straightforwardness in the process as possible. I read carefully what the Scottish Government wrote, and I detected concerns—perhaps not explicit—that the Government in London are passing measures, not wholly warranted, that smack a little of penny pinching, rather than enhancing democracy. I would appreciate it if the Minister responded to those points. Provided that his responses are satisfactory—I see no reason why they should not be—Labour Members will not oppose them.
John Penrose
I will endeavour to respond to the points raised by my shadow counterpart, beginning with the question about previous names. He is absolutely right that a number of organisations representing the transgender community were concerned about the impact on transgender people’s willingness or ability to register successfully. We listened carefully to those concerns. There was not unanimous agreement that the accommodation should be made—there were some dissenting voices against it from outside the transgender community—but we decided to go with it, and it has been widely welcomed in the transgender community; I have a long list of organisations with which we consulted in the run-up to the regulations, and broadly speaking, everyone within that community has been pleased. I therefore hope that it will result in higher levels of registration in one of the more difficult-to-reach and less well represented groups on the electoral register.
My shadow counterpart also mentioned that the Electoral Commission provided us with useful advice. He is right that we do not always agree with the Electoral Commission, but we always pay close attention to what it says. In particular, he mentioned its reaction to correspondence on registration. Some Scottish and various other bodies commented as well. The regulations make changes regarding the correspondence that must be sent between electoral registration officers and electors or applicants to be registered. The changes are designed to help reduce the administrative burden on electoral registration officers; the potential for confusion among members of the public, by avoiding multiple pieces of correspondence; and the overall costs of the process of electoral registration.
The regulations amend how EROs can send confirmation of registration to successful applicants, and what information that confirmation must contain. When EROs have conducted a review of an individual’s entitlement to registration, they will require the ERO to notify the individual in writing of the outcome and to provide information about the appeal process. They also require the ERO to send the individual notice in writing of the outcome of a review hearing, and to provide information about any appeal process.
The regulations amend the categories of case in which the ERO does not need to send a letter to any person affected by an alteration to the electoral register. The Government are also taking the opportunity to correct an error in the 2001 regulations about personal identifiers for absent voters. I hope that that clarifies where we have gone in the regulations. It is all relatively detailed, but I hope that it shows that we have been paying attention to many of the comments made and responses to the consultation.
Finally, my shadow counterpart asked about the Sewel convention. I am informed that it does not apply specifically in this case. However, as I hope he would expect, we have consulted with the devolved Governments, and Scotland has certainly indicated that it is happy with the regulations, so we have proceeded on that basis. I hope that that answers the hon. Gentleman’s questions, and that we can move to what I hope is a widely supported approval of the measures.
Question put and agreed to.
DRAFT REPRESENTATION OF THE PEOPLE (SCOTLAND) (AMENDMENT) (No. 2) REGULATIONS 2015
Resolved,
That the Committee has considered the draft Representation of the People (Scotland) (Amendment) (No. 2) Regulations 2015.—(John Penrose.)
Common System of VAT (Vouchers)
(9 years ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chair
It may be helpful to the Committee if I briefly explain how we intend to run this afternoon’s proceedings. The whole thing must last no longer than two and a half hours. Therefore, we will conclude at 7 pm at the latest. First, a member of the Committee who is also a member of the European Scrutiny Committee may, if he wishes, make a five-minute statement explaining why the European Scrutiny Committee has decided to refer the documents for debate. I understand that Mr Mackinlay intends to do that.
There will then be up to an hour of questions to the Minister who may, if he wishes, start with a brief introductory statement, during which time he may not be intervened upon, rather like a statement to the main Chamber. There is then an hour of questions, which, if I wish, I can extend by a further half hour to make it a total of an hour and a half—as long, it says on my note, as it remains edifying. I hope it will be thoroughly edifying. Finally, the remainder of the two and a half hours that the entire procedure takes up is available for a formal debate of the documents on the basis of the motion that the Minister will, by then, have moved.
The Financial Secretary to the Treasury (Mr David Gauke)
On a point of order, Mr Gray, it was my understanding that the Minister was permitted a 10-minute statement, but I will obviously take your guidance. I am keen to anticipate as many of the questions that the Committee no doubt has as fully as I can in my opening remarks, therefore saving the Committee any trouble. I will be guided by you.
The Chair
Knowing the charm and eloquence in which you habitually engage, I am sure that the Committee would be delighted for you to provide a 10-minute statement. If you ask for it, we could, no doubt, agree to 15 minutes, although I think 10 minutes will do. First, does a member of the European Scrutiny Committee wish to make a brief explanatory statement about why it has referred the documents to this Committee?
Craig Mackinlay (South Thanet) (Con)
It may help the Committee if I take a few moments to explain the background to the document and the reason that the European Scrutiny Committee in the previous Parliament recommended it for debate—it has been some time coming. The 2006 principal VAT directive consolidates the legislation governing VAT in the European Union to ensure smooth operation of the single market and equal treatment for all businesses trading across the EU.
The directive lays down rules to ensure a consistent approach to the questions about how much VAT is charged, when it should be declared and to which tax jurisdiction the tax should be paid. However, vouchers can present difficulties in relation to all those questions. The increase in cross-border use and distribution of vouchers, and the differences in treatment between member states, are some of the main causes of double or, indeed, non-taxation.
In May 2012, the Commission issued the proposal for a directive to amend the principal VAT directive to clarify and harmonise the rules on the VAT treatment of vouchers. The entitlements of the holder of a voucher are typically for goods or services or to receive a discount or a rebate in relation to a sale or a supplier. The issuer assumes an obligation to supply goods or services, to give the discount or to pay the rebate. In defining a voucher that way, the draft directive identifies it as an object in itself that can itself be supplied, meaning that the extensive distribution services in place for vouchers would be subject to VAT.
At the same time, a system for vouchers needs to recognise that, although VAT on any distribution service is captured, there is only one payment for the underlying goods or services for which the voucher acts as evidence of the right to receive. Thus, the draft directive would define supplying of the right to receive as a supply and would have subsequent supply viewed as a single transaction.
Negotiations in the Council of this complex—I think the Committee has gathered that so far—and somewhat technical proposal has been long drawn out. It has not been clear what the final shape of the amending directive might be. Accordingly, the previous European Scrutiny Committee recommended this debate to enable Members to explore the details of the proposed solutions to a complex problem, and the possible consequences for UK businesses. The current Committee endorses that recommendation.
Mr Gauke
It is a great pleasure to serve under your chairmanship, Mr Gray. I thank my hon. Friend the Member for South Thanet for his opening remarks. I am pleased to have the opportunity to discuss the Government’s views on the EU Commission proposal on the VAT treatment of vouchers.
Vouchers in that context are the various types of token, paper and electronic card that we are all familiar with. Examples are book tokens, gift vouchers, luncheon vouchers, electronic in-store cards, mobile phone top-ups and internet-based purchase codes. Some vouchers are issued by the business that will redeem them, whereas others are issued by one business and redeemed by another, with reimbursement made behind the scenes.
The vouchers in question are those where a payment has been made and the voucher represents an entitlement to collect goods or receive services. Sometimes, the payment is made by someone else—a friend or relative, or a business—so the beneficiary may not have made a payment. We often call such vouchers “face value” vouchers, although nowadays the voucher’s value may not be physically written on them, particularly electronic vouchers. Neither discount vouchers nor traditional payment systems are affected by the Commission’s work in this area.
The interaction between “face value” vouchers and VAT systems is complex. EU law has failed to keep up with developments in the sector and developments in technology in particular. As a result, rules in member states differ considerably, which has led to many instances of double and non-taxation, and businesses find it difficult to trade vouchers across borders.
The key problem with vouchers is knowing how much VAT to charge. Generally we expect VAT to be charged when a payment is made. That works fine for CD tokens, for example, but for some gift vouchers no one knows how much VAT to charge until they are used to buy something, because almost all retailers sell goods subject to a variety of VAT rates.
The simple answer might be to apply VAT when the voucher is redeemed but, when a voucher is sold through a distributor, the retailer will sell it at a price below its face value to enable the distributor to take a cut. Therefore, the amount the customer pays is often different from what the redeemer receives. As a result, it can be difficult to identify the correct tax base. If we tax all distribution and redemption at the VAT standard rate, we end up collecting too much VAT.
Last year, the UK retail voucher market was worth about £5 billion. UK business leads the EU in developing such opportunities to facilitate business promotion. In the single market, we need harmonised VAT rules to permit effective cross-border voucher distribution. To trade effectively, businesses need rules that are consistent and easy to understand. The current rules for vouchers do not provide that. Each member state seems to have a different set of complex rules that businesses have to learn. Such differences also lead to double or non-taxation. The Government therefore support the initiative to identify some common VAT rules for vouchers.
On the specific details, the Commission’s proposal puts “face value” vouchers into two distinct groups: single-purpose vouchers and multi-purpose vouchers. SPVs are vouchers for which the information needed to apply tax is known when the voucher is issued, such as a CD token. MPVs are the more complex type of vouchers, such as a gift voucher, where the tax cannot be applied at the outset because it is not known what goods or services will be supplied until the voucher is used.
There is general agreement among member states that VAT on SPVs should be charged as if the sale of the voucher is the sale of the underlying goods and services that will be supplied when the voucher is used in the shop. VAT is therefore collected at each stage of distribution. That is how we currently treat SPVs and we fully support the work achieved in respect of them.
It has proved much harder, however, to determine the correct VAT treatment for MPVs. The Commission’s initial scheme was rejected by member states because it was too confusing and unpopular with businesses, who would have had to have shown their margins. Instead, member states examined alternatives. The solution on the table would require the shop to account for VAT on the face value as a default, but would allow the use of the actual payment details where they are known.
The Government are inclined to support that approach because, in the majority of cases, it would ensure that the correct amount of VAT was paid. It is also the approach taken in the UK with many MPVs. Although we think the issue is manageable, there would be an impact on some high street retailers where vouchers are issued and redeemed by the same party, particularly where the distribution is undertaken by intermediaries acting in their own names. We think that that will impact on about 6% of vouchers sold, but the businesses mostly affected will be the half dozen or so large high street chains.
Those few large high street retailers would probably want to adapt their systems. They already account for VAT using a special scheme. They might wish to renegotiate their arrangements with distributors so that they share the burden of collecting VAT more equally. The new scheme allows for businesses to make adjustments where the correct amount of VAT is known. It is also possible for the adversely affected retailers to change their arrangements with intermediary businesses to make it easier for them to identify the correct amount of VAT. We do not think that private consumers would pay any more VAT under the revised approach.
As I have explained in my letter to the Committee, we hope to make some changes before final agreement. Although the Government are minded to agree the revised approach to collecting VAT on sales involving vouchers, there is one aspect that we are keen to discuss with other member states: the VAT incurred by intermediaries that buy and sell vouchers in their own name and that will not, under the current text, be entitled to deduct the VAT on their costs. However, those charging a commission will be able to deduct the VAT incurred on costs, and one can imagine the practical impact of that as one person being able to deduct the VAT on the costs of his van while another could not. We believe that the intermediaries that sell vouchers should be treated as a special case so that their tax position is the same as other intermediaries, and we are continuing to press for those changes to the text.
Finally, having examined many possibilities for changes to the VAT rules, the majority of EU member states agree that the text on the table offers the best compromise against a background of it being impossible to please all businesses if we seek a common rule to avoid double and non-taxation. At the same time, most member states will have to accept at least some changes to their existing rules. Eleven member states agree with us on VAT deductions for certain distributors, as does the Commission. The only exception to that general common position is Germany, which has recently argued the need to distinguish tickets from vouchers for reasons of absolute clarity. We see that as an unnecessary level of detail and note that no other member state has supported Germany on that point. Tickets are outside this area of work, but are treated under VAT rules in the same way as SPVs. We hope that, if all member states can agree the text, Germany will be persuaded that the advantages of agreement outweigh its concerns.
I have set out the broad state of play on the Commission’s proposal on vouchers. Working groups are continuing in Brussels, and we expect that the matter may come to ECOFIN next year. With those remarks, I look forward to any questions from the Committee.
The Chair
With the Minister having explained the matter so clearly, we have an hour for questions. I remind Members that they should be brief and, crucially, include a question. At my discretion, they can ask supplementaries, if they wish.
Rob Marris (Wolverhampton South West) (Lab)
It is a pleasure to serve under your chairmanship, Mr Gray. In past years, you and I have spent many years working constructively, I think, together in this room.
The area is particularly complex. I hope the Minister will confirm whether I have understood the proposal correctly—it is quite possible that I have not—but when we boil it down, it is that single-purpose vouchers would be subject to VAT when they are issued and multi-purpose vouchers would be subject to VAT when they are redeemed. That is what I pick up from the papers. Incidentally, the papers are one of the few places outside church where one hears the word “redeemer” used.
Rob Marris
I understand that the Commission considered four options. One, perhaps unusually for the Commission, was to do nothing. One was what it is pleased to call—I confess that this is a new one on me—the “soft law” approach, which most people would call guidelines. Another was to legislate, and the fourth option was a ban. Which of those four—to do nothing, the guidelines, to legislate or a ban—was the preferred option of Her Majesty’s Government?
Mr Gauke
The first of the UK Government’s objectives was to address a level of inconsistency and confusion that exists under the status quo, so we were not in favour of the do-nothing approach. Equally, we see vouchers as having a role to play. Within the UK, we have one of the bigger markets, as one might expect—although it is perhaps bigger than one would expect based on the proportion of our economy. We would not therefore favour banning vouchers; that would be a very draconian approach.
To get the type of clarity that we think we need, we concluded that guidelines would not be sufficiently strong. Therefore, of the four options, we favour legislating and hope that we can reach agreement among all member states so that the Commission’s proposals can go forward in a legislative form, although, as I said, we have highlighted a couple of areas where we think they can be improved on.
Geraint Davies (Swansea West) (Lab/Co-op)
In the case of multi-purpose vouchers that are issued, for example, in Britain but redeemed in Germany, what account is the Exchequer taking of changes in exchange rates, in terms of the tax take?
Mr Gauke
The hon. Gentleman raises an important point. The reason why we think we need to make progress in this area is that, in itself, this area is complex. When one takes into account the potential cross-border nature of transactions, the need for greater clarity becomes all the more important.
If we want to facilitate cross-border trade—as the Government do, and there is cross-party consensus on that—addressing the VAT treatment of vouchers is an important factor. I have set out the principles of how the Government think that this should work; if we are looking at MPVs, the measure should apply at the end of the transaction as such. That principle would apply, notwithstanding any changes in the exchange rate.
Geraint Davies
In the case of a voucher worth €1when it was originally issued, but €1.20 or €0.80 when it was redeemed, would there be any bearing on the tax situation? Presumably if the voucher is redeemed in Germany, the tax is paid in Germany, is it not?
Mr Gauke
In terms of the principle, if the supply is in Germany, the voucher is subject to German VAT, for example. The exchange rate is essentially not an issue here; the issue is the VAT payable at the point of the transaction, which, in the case of MPVs, is at the end of the process, as it were—at the final point in the shop. That is the rate of VAT that has to be paid.
Geraint Davies
To put it simply, let us say that somebody had a pack of 240 PG tips with a 50p voucher on it and they redeemed that in Germany. Although perhaps it would not be accepted at all, if it was, the amount would be translated into euros and the tax would be paid on it, so it would have a different value than anticipated. I am asking whether that poses any problems.
Rob Marris
I have two further questions, if I may. As the Minister is aware, article 30a—I think it is a draft—defines “voucher”. It defines “single-purpose vouchers”, “multi-purpose vouchers” and “discount vouchers”. Are Her Majesty’s Government satisfied with those definitions?
Rob Marris
As the Minister said, this is a matter of considerable complexity. Were the proposals to go ahead—with, as the Minister mentioned, some fine tuning—would complexity for business increase or decrease? Which is the likely assessment?
Mr Gauke
It would be fair to say that there is some complexity in the current system because of inconsistency. The hon. Gentleman asks whether the draft directive will disrupt businesses because they will have to deal with a new regime. I would argue that it will not cause major disruption to businesses here. The most likely to be affected would be large, high street chains. High street shops that issue vouchers through distributors to other businesses would be most affected. Those that issue vouchers direct to their customers would be least affected.
Whether a business will be affected significantly will depend on the balance between the two types of operation within the same business. Some high street retailers issue both types of voucher. Some distributors might want to change their business model from buying or selling vouchers to arranging the sale of vouchers. That is quite possible.
Officials have had wide-ranging discussions with UK businesses on the changes. Although there may be some changes and disruption, the general feedback that officials have received from businesses is that they would welcome certainty on the matter in the future. Again, I make the point that, for the first time, VAT law would have a specific provision for VAT treatment of vouchers, which would mean that EU member states would have the same rules, making cross-border trading using vouchers far easier. Businesses would no longer have to set up different systems for different countries.
To give a topical example, the provisions would also make the collection of VAT on mobile phone roaming charges far simpler. The new rules would allow the UK to make changes to our law to make it easier to collect the right amount of tax on what the customer pays when using a voucher. Yes, there will be some disruption to and impact on high street retailers but, on balance, if an agreement can be reached, this is a favourable change.
Craig Mackinlay
To try to put into context the type of transaction that might be caught, I am thinking particularly of business-to-business transactions. I am not quite sure whether there is a voucher, but there must be one somewhere along the line. A reverse charge could come into play for some voucher that represents goods that could be redeemable elsewhere.
The rules for business-to-consumer transactions are obviously different. I would have thought that the most relevant example relates to the new digital services one-stop-shop rules that have applied since 1 January. I am thinking about an Apple iTunes or Google Play voucher, which I assume could be used on a computer in Germany to get a service delivered in Germany. The string of transactions could be complicated, but I am trying to understand how that might work under the scheme. I would assume that the German supplier of an iTunes service—whatever it is—would then be deemed to come under the German one-stop-shop arrangements.
I am also thinking about unusual transactions such as a restaurant discount voucher. Many companies in the UK offer diners the opportunity to join for a certain amount a year what is almost a club that allows a discount in restaurants. That would not cause difficulties in the UK, because I would imagine that joining the club is a chargeable supply, as is actually paying the reduced amount in a restaurant. It is just VAT. However, I am struggling to get my head around how it would work across borders. I am sorry to cause difficulties, but I want to understand how things might work in transactions, which makes the issue rather more important.
Mr Gauke
In part, I would go back to the principles that I set out in my opening remarks. As for business-to-business transactions for promotion purposes, to the extent that the reverse charge applies, that would operate as normal. The one-stop shop referred to by my hon. Friend is for business-to-consumer transactions only. There are some issues relevant to the one-stop shop, but I do not think that anything in particular arises as consequence of VAT on vouchers; the two things stand by themselves. To clarify an earlier remark, discount vouchers, to which the hon. Member for Wolverhampton South West referred, were removed from the proposal by member states, so the measure applies to face-value vouchers only. I hope that that is clear.
Resolved,
That the Committee takes note of European Union Document No. 9926/12 and Addenda 1 and 2, a draft Council Directive amending Directive 2006/112/EC on the common system of value added tax, as regards the treatment of vouchers; welcomes the objective of harmonised VAT rules for vouchers to support a smooth operation of the Single Market and fewer possibilities of double and non-taxation; and further notes that the Government is keen that any solution ensures that the right amount of tax is collected on what the customer pays, in line with the principles of taxation of consumption.—(Mr David Gauke.)
Written Statements
Housing Associations
The Secretary of State for Communities and Local Government (Greg Clark)
The Office for National Statistics (ONS) has altered, with retrospective effect, how private registered providers of social housing (commonly known as housing associations) are treated in the National accounts. ONS has concluded that housing associations should have been classified as public rather than private since 2008, due to several of the regulatory requirements imposed by the Housing and Regeneration Act 2008 introduced by the previous Government. ONS will now apply this change retrospectively back to 2008.
This is purely a statistical change. Reclassification makes no material changes to the operation of housing associations, does not nationalise housing associations and the Government have no plans to impose new controls on the sector—including over spending or borrowing. Housing associations will continue to be able to access those existing Government programmes that have been open to them. The Government remain committed to delivering 275,000 new affordable homes.
Housing associations are voluntary organisations and we are committed to reflecting their historic voluntary ethos and strongly believe they should continue to be independent of Government. That belief is reflected in our decision to extend Right To Buy to housing association tenants by accepting a voluntary offer from the sector rather than implementing the policy through legislation.
As set out in our agreement with the housing association sector on Right to Buy, the Government are committed to developing deregulatory measures to help housing associations build more homes and help more people into home ownership. I set out the details of this agreement in my previous written ministerial statement (12 October 2015, Official Report, column 4WS - HCWS222). I now intend to bring forward a package of deregulatory measures that will deliver this commitment while also aiming to return housing associations to the private sector in the future. The regulatory system will continue to ensure the good governance and financial viability of the housing association sector, retaining the confidence of lenders.
I will work with the housing association sector, the social housing regulator and other stakeholders to finalise the deregulatory measures, with a view to delivering them through the Housing and Planning Bill.
[HCWS281]
Scotland Bill
(9 years ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Scotland (David Mundell)
The UK Government are delivering on their commitment to make the Scottish Parliament one of the most powerful devolved Parliaments in the world. Every deadline has been met in bringing forward new powers to the Scottish Parliament, and another milestone will be reached on 9 November when the Scotland Bill has its Report and Third Reading.
The Scotland Bill delivers the Smith Commission agreement in full. The agreement was reached by Scotland’s five main political parties, and it means the Scottish Parliament will have control over around £11 billion of income tax revenues and responsibility over welfare benefits worth approximately £2.7 billion (by 2014-15 figures). For the first time, more than 50 per cent of the Scottish Parliament’s budget will be funded from revenues raised in Scotland.
The Joint Exchequer Committee has met four times since June 2015 to take forward negotiations on Scotland’s fiscal framework. The meetings have focused on key elements of the framework—block grant adjustment and subsequent indexation mechanisms, administration and implementation costs, the no detriment principle, capital and resource borrowing, VAT assignment, fiscal scrutiny and governance. Discussions have been constructive and are focused on securing a fair and workable fiscal framework which delivers the recommendations made by the Smith Commission in its report of November 2014.
Work is continuing and both Governments aim to complete this work as soon as possible in order to give respective Parliaments time for due consideration of both the fiscal framework and the Scotland Bill. This is likely to be after both the UK spending review and the draft Scottish Budget. Since the Scotland Bill’s introduction to Parliament in May 2015 it has been subject to healthy and productive scrutiny, including five days of debate in the House of Commons so far. During this time I have spoken to people from organisations representing the range of Scottish public life about the new powers the Bill contains, as have my ministerial colleagues. I have worked with the Scottish Government to seek their views, and committees of the UK and Scottish Parliaments have taken evidence and reported on the Bill’s provisions.
Throughout this work I have been clear that I would reflect on sensible and constructive suggestions made. Today I am tabling amendments to the Scotland Bill. I have listened to the debate and I am responding with amendments designed to improve the effectiveness of the legislation and to ensure that the new powers for the Scottish Parliament work as the Smith Commission intended. Part 1 of the Bill relates to constitutional arrangements. An amendment will strengthen the clause on the permanence of the Scottish Parliament and Scottish Government by including a provision that includes a requirement that the Scottish Parliament and Scottish Government should not be abolished except on the basis of a decision of the people of Scotland. While the UK Government are clear this is a scenario that has never been envisaged, the amendment is intended to make clear that there is absolutely no doubt: Holyrood is here to stay.
Additional amendments to Part 1 provide technical refinements to the elections clauses, and ensure the Scottish Parliament is responsible for relevant provisions related to the operation of the Scottish Parliament and Scottish Government.
Part 3 of the Bill includes provisions on welfare. The amendments will give further flexibility to the Scottish Parliament on benefits in relation to carers, and will enable the Scottish Parliament to legislate to provide for forms of non-financial assistance with a view to reducing maternity expenses, funeral expenses or expenses for heating in cold weather. There will no longer be a cap on the amount of discretionary financial assistance an individual who is in receipt of a reserved benefit can receive to assist with rental costs. The discretionary financial assistance must still be provided to help the individual with their housing costs and additional spending must be funded by the Scottish Government. The Smith agreement stated that universal credit will remain a reserved benefit to be administered and delivered by the Department for Work and Pensions, and Scottish Ministers to make decisions about varying the housing costs within universal credit for claimants who rent their homes as well as deciding when to pay those housing costs direct to landlords. A co-operative approach between the UK and Scottish Governments will be essential and amendments will clarify the Secretary of State’s role in agreeing to universal credit regulations that can be laid by Scottish Ministers.
Paragraph 54 of the Smith agreement relates to the power to create new benefits in devolved areas. A new clause will be tabled to address this.
The remaining parts of the Bill transfer substantial powers to the Scottish Government and Scottish Ministers. Amendments will be tabled to clarify the approach taken to the devolution of tribunals and to the Crown Estate. In response to feedback from stakeholders the clause on equal opportunities has been amended in order to better set out the powers to be devolved. Other amendments strengthen the delivery of the Smith agreement on the clauses relating to fuel poverty, onshore oil and gas licencing, consumer advocacy and advice and the office of communications. A new clause ensures the destination of Scottish fines, forfeitures and fixed penalties can be made explicit in primary legislation where necessary.
The Smith Commission agreement outlined a number of areas for further consideration, and the UK and Scottish Governments have taken forward discussions on each of those. As a result of those discussions I am tabling amendments to devolve abortion policy and responsibility for welfare foods to the Scottish Parliament. The amendments tabled today will strengthen the Scotland Bill and represent another milestone in making the Scottish Parliament one of the most powerful devolved parliaments in the world. I look forward to this important piece of legislation returning to the House for debate next week.
[HCWS282]
Grand Committee
Enterprise Bill [HL]
The Deputy Chairman of Committees (Lord Brougham and Vaux) (Con)
My Lords, if there happens to be a Division in the Chamber, we will adjourn for 10 minutes.
Schedule 3: Primary authority scheme: new Schedule 4A to RESA 2008
Lord Stevenson of Balmacara (Lab)
My Lords, as we move on to this session on apprenticeships, I want to reassure the noble Baroness the Minister that we are very supportive of what is being planned here generally. We will make a few points and ask some questions of a probing nature, but we do not intend to do anything that would in any sense be too aggressive, and I hope that our comments will be taken in the spirit in which they are intended.
I am slightly short-handed today because, unfortunately, my noble friend Lord Mendelsohn is unable to be here—although I hope he will join us later—so I am largely on my own. I shall be slightly scrabbling to make some of the points that I had thought that others might be making, so your Lordships may find that today has a slightly surreal feel to it, as I gloss over some of the more difficult and trenchant issues. However, I shall be heavily reliant on others who put their names down against the amendments and who, I am sure, will be equally testing and trying for the Minister.
On the group of amendments starting with Amendment 49DA, in which we have a number of amendments and which is on the generality of the new approach to apprenticeships that the Government say that they wish to take—which, as I said, we are broadly in favour of—I wish to make three main points.
First, Amendment 49DA, which is a probing amendment, picks up on an issue that has been raised with us by a number of local government bodies and other agencies. They feel that the powers being taken to set targets for public bodies on the number of apprentices that the Government would wish them to have appointed by the end of the Parliament, in pursuit of this very ambitious target of 3 million new apprentices within that period, will cause real problems. Could the Minister therefore explain what negotiations and discussions she has had with local government and other agencies on these points?
For example, one issue that has been raised with us is that there is quite a range of development in the sector in terms of who is ready to take on an increased number of apprentices and who is not—and we are talking about a very significant increase if we do the calculations. What figure do the Government have in mind overall for the sectors concerned, and would they be receptive to having further negotiations and discussions with those bodies in order to try to arrive at an equitable basis on which this could operate? We are not against the proposal—it is a good thing that everybody should be set stretching targets—but we slightly regret that there is not more in the Bill tying the increase to contracts, procurement issues and other activities in which, in previous Bills, we have discussed how one could lever up the numbers of apprenticeships. Specifically on the target for public bodies, we would like to have a bit more information about how it will work in practice.
Secondly, it is glaringly obvious that the Government feel strongly that apprenticeships will flow only if targets are applied to the public sector—we did not know that targets had come back into fashion, but that is obviously a nice thing to see in a Bill of this nature—but it has been pointed out that there is no target for the private sector. Why is this? Is there some other force here that we are not aware of that is preventing the Government taking what seems to be the logical step? If we are to get to the 3 million target, there surely has to be an obligation—we would perhaps put it no stronger than that—on the private sector, which will carry a large proportion of this. Of course, money will flow in support of those, so there should be no net cost to them in relation to how the targets will be reached. I am sure that it would be to the benefit of the country as a whole if both the public sector and the private sector were jointly engaged in this process.
Thirdly, on Amendment 49EB, there has been a lot of concern, expressed very often by my noble friend Lord Young, about the quality of apprenticeships. Indeed, he mentioned it in the debate in this Room only a few days ago in relation to a statutory instrument that had been put forward. The numbers are one thing but the quality is very much another. Obviously, the quality will be tackled, through the Bill and the Act, by creating the term “statutory apprenticeship”, and that is a good thing. However, the amendment suggests that there may be more return if the restriction on statutory apprenticeships could focus on the higher-quality and the higher-skilled elements. In other words, they should be at levels 4 and 5 in the training schemes and not at levels 1 and 2.
I am sure there are other points that others will wish to make on that, but that gives the flavour of the way in which we want these amendments to be considered. I beg to move.
Baroness Sharp of Guildford (LD)
My Lords, I rise to speak to our Amendment 50 and to the other amendments in the group. Before doing so, I should declare my interests. This is not at present in the list in the register because it is very new, but I am very recently president of the AoC Charitable Trust. I am also an honorary fellow of the City & Guilds Institute and a patron of the 157 Group.
I think we have similar probing questions about this clause and, in particular, about the definition of precisely what is and what is not a public body. That is really what Amendment 50 is about. It raises questions about the slightly odd wording at the end of new Section A9, which says that,
“‘public body’ means … a public authority, or … a body or other person that is not a public authority but has functions of a public nature and is funded wholly or partly from public funds”.
There are difficulties with such a definition. For example, Kids Company is largely funded by public funds. Is that a public body? A lot of charities are largely funded by public funds for one reason or another. Are they public bodies? I certainly would not have thought of them as being public bodies. Or are you going to take the ONS definition? The ONS, for example, is now classing housing associations as public bodies, although a lot of the money they receive does not come from the public sector. However, equally, the ONS does not class the Student Loans Company as a public body in spite of the fact that the Student Loans Company receives all of its funding from a public body. Therefore, as I say, that definition strikes us as being extremely loose, and I think it is necessary to know precisely what the Government have in mind when giving such a definition in the Bill.
In general, I share very much the view of the noble Lord, Lord Stevenson, in asking questions about how far the Government should go in setting targets here, there and everywhere for public bodies—so much for localism, if I might say so. To provide that “The Secretary of State shall set such targets” leaves very little discretion to the locality. One would hope that, actually, the whole thing was done very much in conjunction and consultation with localities. A great many local authorities, such as in Birmingham, work very closely with local enterprise partnerships and do set targets for themselves. Indeed, as I shall go on to explain later, they also set targets for vulnerable young people who should be taken into apprenticeships. This clause raises lots of questions on which we need some clarification.
Lord Hodgson of Astley Abbotts (Con)
My Lords, I have added my name to Amendment 50, and will pursue the point made by the noble Baroness, Lady Sharp. It will not surprise the Committee, given my interest in the charitable and voluntary sector and the reports that I have written for the Government, that my line of questioning follows that which the noble Baroness has just raised.
It is absolutely clear that many charities and voluntary groups carry out functions which the Government find difficult to fulfil. The Government can provide the vanilla flavour, but the more difficult and challenging aspects of our society may often be better addressed through smaller, local voluntary groups. They will therefore have, in the words of the Bill,
“functions of a public nature”,
and be,
“funded wholly or partly from public funds”.
Rather than wait until today’s debate, I asked the Minister’s officials to throw a little light on the matter, and they very kindly wrote back. My question was whether the definition of a public body under Section A9(7) would cover bodies such as the Charity Commission and some charities. The answer was:
“The Charity Commission would fall within the definition of public body (it’s a non-ministerial department and therefore part of the civil service). No targets can be set for charities unless they are also public bodies prescribed in the regulations. We will set out the full list of public bodies for whom a target may be set in regulations. There will be an opportunity for those affected to respond to a consultation on this during the passage of the Bill through Parliament”.
We are discussing it in Parliament today, but I have not yet seen the regulations, although I may have missed them. This is a trifle too opaque. The sector is entitled to greater clarity now so that we can provide the appropriate level of scrutiny.
We are all very much aware of the deficiencies in the process for scrutinising regulations or statutory instruments—we had a clear example of that last week. I very much hope that, if my noble friend cannot give a direct answer this afternoon and tell us where the list is, she will be able to promise us clarity before we reach Report, at which time we could have a further, better and more focused debate on this issue, which means a lot to individual charities and voluntary groups. They need to know exactly what lies in store for them.
Lord Young of Norwood Green (Lab)
My Lords, I support the amendments. I slightly disagree with my friend in this matter, the noble Baroness, Lady Sharp. I do not see anything wrong with setting targets; obviously, there ought to be consultation. The question I wanted to ask is: apart from these public bodies, is each ministerial department to be set targets? Do they currently have targets? In my brief ministerial career, we used to gather departments together and get them to report at least once a month on whether they were meeting apprenticeship targets. I would welcome a comment on that.
The Government have set themselves a big task in reaching a 3 million target over the course of this Parliament. I have on many occasions raised the problem of having a large public target, such as 3 million. The latest figures I have for apprenticeship starts show that there were 444,000 during 2013-14, which is good until you realise that a significant number—some 161,000—were aged 25-plus. I have nothing against adult apprenticeships as such, except that, if we disaggregate the figures again, a significant number would not be new-start apprenticeships but people being reskilled in existing jobs. I still think that the challenge we face is getting more young people into apprenticeships—those numbers are much lower and, in some cases, we have even had a decline. It is not as though the demand for apprenticeships is not there. For example, Semta’s estimation for the number of engineering apprenticeships required over the next period of time is huge—something like 830,000—so we have a huge task on our hands in relation to apprenticeships.
Baroness Corston (Lab)
My Lords, I am currently chairing the Select Committee on Social Mobility and the transition from school to work. Last week, the committee met a number of young people who are either trying to get apprenticeships or going through apprenticeships. I would recommend that to anyone who wants to know what is going on.
When I left school—admittedly, in what some would now think of as the dark ages—apprenticeships were in mechanical engineering, electrical engineering, plastering, joinery and carpentry, and normally they were a few years in duration. I accept that the world of work has changed, but I was deeply shocked to hear young people say that they had had apprenticeships in putting flowers in bunches for a supermarket for six weeks, sweeping a stable floor for six weeks, wrapping vegetables for the same length of time, and working in a fish and chip shop—I accept that there is some encounter with the public there and you could say it is a branch of retail—also for six weeks. I was told of a company where the managing director is the only person who could be called an employee and everyone else is an apprentice who is there for a few weeks.
This practice is an abuse of the term “apprentice”. What it does is massage unemployment figures so that people are seen to be doing something, but those young people were deeply dispirited at what was being offered to them. I am also told that it is now possible to have something called an apprenticeship in plastering for six weeks. You cannot learn to be a plasterer in six weeks and those people are presumably now going out and offering themselves as competent plasters to unsuspecting householders. That is not in anyone’s interests.
I would be very grateful if the Minister would address the question of quality because these young people certainly did not think that they were recipients of anything approaching the term “quality”.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills and Department for Culture, Media and Sport (Baroness Neville-Rolfe) (Con)
My Lords, I am grateful to the noble Lord, Lord Stevenson, for his clarity and succinctness, and for the other comments that have been made in this debate. If I do not answer all the points exactly, I hope to do so during the course of a series of amendments that we have; for example, I shall have some more to say on quality a little further on. I shall try to look at these amendments in the round.
Amendment 50 seeks to remove part of the definition of the term “public body” from the clause, which relates to bodies that are not public authorities but have functions of a public nature and are funded wholly or partly from public funds. The definition gives an overview of the types of bodies that might be covered by the duty. The Government think it right in principle—and I think that there is agreement—that public authorities and other bodies performing public functions should be capable of being subjected to targets. However, this is only a power to prescribe; it does not oblige all those that fall within the other public bodies category to be subject to a target. Therefore, a particular body will be subject to targets only when the Secretary of State makes secondary legislation—just to be clear. Our intention is that bodies with a workforce in England of more than 250 employees will be subject to the duty.
My noble friend Lord Hodgson is absolutely right that bodies are entitled to clarification as to which bodies are in and which are out, and we will set out the full list of public bodies affected in a consultation at that we intend to publish during the passage of the Bill. That will be an opportunity for those affected to respond to the consultation. I am sure that it is not yet available, but this Bill starts in this House, and there is an interplay between what we are doing here, which is perhaps relatively narrow, and the emerging policy on apprenticeships, which coincides with it. The list of bodies will be set out in regulations, and we will bring those forward for debate in both Houses, following the passage of the Bill.
Lord Hodgson of Astley Abbotts
So it is going to be a very long list of a series of charities and voluntary groups, and it will not be available until after the Bill has passed. Is that what the Minister just said, because that is not terribly satisfactory?
Baroness Neville-Rolfe
I shall try to answer on the specifics, to give a feel for bodies that will be in and those that will be out. A key concern was that, for example, bodies as small as Kids Company could be caught, but the receipt of the grant that it used to have, should it still exist, would not suffice to bring the body into scope. That is my understanding.
To respond to a point made by the noble Baroness, Lady Sharp, we are going to use the ONS definitions as a starting point for considering which bodies should be in scope. However, as I have said, we will be consulting. We appreciate that a body may feel that it has good reasons for not being in scope. For example, I know that the noble Baroness, Lady Warwick, is concerned about smaller housing associations. Following the ONS’s announcement on Friday, the Government have confirmed that they will,
“bring forward measures that seek to allow housing associations to become private sector bodies again as soon as possible”.
That would take them out of the scope of this duty, and we will take account of that when preparing our consultation. It is a fast-moving area, so I appreciate the complications, but I am happy to engage with people to give them as much clarity as we can. The scope will be set out for consultation, and the limit of 250 employees will help to some extent to make people less concerned about bodies that might be brought in.
Lord Hodgson of Astley Abbotts
One area causing particular concern is that of the larger charities providing overseas aid, and distributing it for DfID, which come above the 250-person ceiling or floor and are operating not in the United Kingdom but overseas. It would help if officials or the Minister could let us know whether they as a category will be included in the need for apprenticeships.
Baroness Neville-Rolfe
As I said, the list will be available for consultation. It will be available during the passage of the Bill. I can give that undertaking. We will also consider any requests for removal as part of that consultation. However, it is important, for the careers of employees and the effectiveness of public institutions, that the public sector delivers its fair share of apprenticeship growth. We will give some further thought to my noble friend Lord Hodgson’s point, to see whether we can give any greater clarity, but I can give an assurance that we will be consulting.
To respond to the point made by the noble Lord, Lord Stevenson, which was picked up by the noble Lord, Lord Young, about local authorities, officials in the BIS/DfE apprenticeships unit are in active discussion with the DCLG about the public sector target and its application to local authorities. We will consult on the level of the target and who should be in scope. We cannot speculate on the figure, but to do so just as an indication, we are currently working towards 2% to 3% for consultation, but that will be subject to confirmation.
Baroness Neville-Rolfe
Of employees.
To respond to the noble Lord, Lord Young, central government departments will be in scope. We agree strongly that the Civil Service should play its part. Indeed, I have an apprentice in the Bill team. I think that that is leading the way.
I turn to Amendment 49DA, which would remove the power of the Secretary of State to make regulations to set targets for public bodies. I do not think that that is the intention of these probing amendments, but I will say that investing in apprenticeships makes economic sense. In June 2015, research on further education in England indicated that adult apprenticeships at level 2 and level 3 deliver £26 and £28 of economic benefits respectively for each pound of government investment, measured on an NPV basis— the difference between gross benefits and costs. As for the apprentices, to pick up another point, individuals with a level 2 apprenticeship earn on average between £48,000 and £74,000 more over their lifetime than similar individuals with level 1 or 2 qualifications only. Higher apprenticeships could earn £150,000 or more on average over their lifetime, compared with those with equivalent vocational qualifications.
Amendments 49EA, 49EB and 50AB come together. They would extend the scope of Clause 18 to place apprenticeship targets on private sector companies in the UK. They state that the target should be achieved via higher-level apprenticeships. As I have always agreed with the noble Lord, Lord Young, apprenticeships are jobs and depend on employers offering opportunities to young people. Finding the right opportunity is vital for any young person starting out on their chosen career. There will always be competition for the best places, as there is for the best universities. Employers will naturally take the best candidate for the job that they offer. Figures show that, of the 851,000 people participating in apprenticeships in 2013-14, 185,000 were aged under 19.
The positive effects of apprenticeships are clear. They have an economic and social benefit for individuals and society as a whole. The public sector employs fewer apprentices as a proportion of its workforce than the private sector. The Government are therefore keen to place targets on the public sector.
However, we are against red tape and feel we should be careful about imposing new burdens, especially when the desired objective can be achieved in another way. Therefore, 1.3 million private sector organisations that employ people should not suddenly be required overnight to take on apprentices. Instead, via apprenticeship reforms, we are putting employers at the heart of the apprenticeship programme so that they are encouraged and incentivised to employ apprentices. We also judge that it would be administratively impractical for government to monitor whether employers were having “due regard” to the targets and take action where this was not the case. Firms would have to set up a whole compliance system for this, and we believe that their efforts are better used elsewhere.
I shall come to quality on another amendment, but I shall say something about career guidance because I agree with the noble Lord, Lord Young, that it is very important. That is why we have set up the employer-led Careers & Enterprise Company. This area is rightly being actively pursued by DfE, with Ofsted taking a great deal of interest in careers in its inspections. We have discussed before the problem of getting into schools and I will feed back the noble Lord’s observations to my noble friends in the DfE. Like him, I go to schools and, like him, I always mention apprenticeships. As government, we can do a lot, but we can also do a lot individually to help encourage careers in schools.
Noble Lords made a number of observations. We will come on to quality elsewhere. I hope that the readiness to consult and my indications of where we are heading have been helpful and will enable the noble Lord to withdraw his amendment.
Lord Young of Norwood Green
The Minister did not respond on public sector contracts, and I would welcome a response. I do not think I am going to be surprised by it, but I would like one.
I do not disagree with the Minister’s point about the difficulty of setting targets for every company, but we should surely be concerned that we never seem to have got a lot further than something like one in four or one in five companies taking on apprenticeships. We never seem to be able to push the needle on the dial much further than that. If we believe, as I know the Government do, that the vast majority of these apprenticeships should be coming from SMEs, it is vital that we make some impact on them. What plans do the Government have? I heard the Minister say that employers are at the heart of this and will determine the skills required. I do not quarrel with that. The Government have introduced new funding arrangements which not every employer is happy with. That is a bit of a worry because they feel that they will have to claim back. I have heard from employer organisations that there are real concerns about that. That is the problem we face if we want to get significant numbers of young people. Although I heard the figures the Minister quoted, I still think that that will be the challenge and that getting them into these small and medium-sized enterprises will be vital.
Baroness Neville-Rolfe
We will come on to discuss contracting out, which is the subject of the next amendment. I hope it will enable me to reassure the noble Lord on that point. SMEs also come up later. His points are extremely well made. This is a very important area. There is a lot of cross-government consensus that we need to have a step change in apprenticeships. Germany and Switzerland have classically done a better job. With the levy, the change and the move to proper frameworks and at least a full year for every apprenticeship, we are trying to move into a different place.
The provisions in this Bill do not answer all the questions, but they do some useful things. With the noble Lord’s agreement, I hope we can move on to the next amendment and talk about what we are going to try to do for contracting out.
Baroness Sharp of Guildford
Before the Minister sits down, perhaps I could interject briefly. I wondered whether the noble Lord, Lord Young, had actually looked through the list of amendments and noticed that we had the following one, as was rightly said, on public procurement, and the subsequent one, which is on small and medium-sized enterprises. However, I put it to the noble Baroness that she says there is a lot going on with apprenticeships at the moment. I think a very real problem has arisen, which is that the Government are constantly changing the goal posts in relation to apprenticeships and this poses a real problem for a lot of companies.
As is very clear indeed from the Ofsted report that came out last week, what has been happening is not satisfactory and needs to be changed. One of the problems facing the whole sector is constant instability. We have a situation in which the employer ownership pilots were going on, and we have the trailblazer pilots going on, and then suddenly the Government intervene with the apprenticeship levy, which changes the whole game once again. The whole thing is thrown up in the air and a lot of companies are very uncertain as to quite where they are going to be going. Take the construction industry: there is already a construction industry levy—is the other levy to be on top of that? I know there have been consultations about it, but we do not know yet what is going to happen. Therefore, I put a plea to the Government and the Minister: please try to establish a broad framework for setting apprenticeships and then do not fiddle with it for about three years to give it a chance to bed down.
Baroness Neville-Rolfe
I have to say I agree that having a good vision and a good framework for this important area of policy is essential. Obviously we came back in May—to the surprise of some of us—and we are trying to move forward with a new approach to apprenticeships, which does include a levy because we think that that is a good way of getting funding into this absolutely vital area. Of course I, like everybody who used to be a huge employer in their former lives, recognise the importance of certainty for employers. However, I do not think that we should apologise for trying to improve the framework. We should do that. We should then give the new arrangements a clear run. However, we are at that point in the process where policy is being formed. We are bringing in a levy, which is still the subject of consultation. We are rightly in the Bill trying to move forward on a couple of small and important issues, including this business of the definition of apprenticeships, where I feel that having sanctions, as there are for degrees, will actually help to improve the recognition of this vital employment category.
Lord Stevenson of Balmacara
I thank all noble Lords for contributing to the debate. It has done what we wanted, which was to begin to open up this whole area and to get a sense of where the Government are going, and to try to see through to the vision and the framework, which the noble Baroness mentioned.
I think the slight problem we all have around the Room is that we are not quite sure what the vision actually is because we have not seen some of the detail of it. We have some doubts about whether the framework is going to be sufficient to get the country to the point where we can say that we have a competitive environment similar to Germany and others who have been at this for some time. The noble Lord, Lord Hodgson, is quite right to bang on about whether or not large charities doing work for local authorities are going to be included. It will make a huge difference to them. We need to know a bit more about who will be on the list. If the Government are, as we know, changing around the definitions to housing associations so that they are in but they could be petitioned to come out by some other piece of legislation, this is not going to provide the basis of what we are talking about.
I suppose we were being a bit cheeky in trying to delete the first subsection of the first new Section in the clause, but we wanted to draw out from the Minister the rationale behind what we are doing. She says that it makes economic and social sense for bodies to recruit something like 2% to 3% of their workforce, even if they are charities, and that the burden should be on the larger—presumably, the 250 employees threshold will become the standard, as that is the target for small and medium. So it is largely going to be on those that are not SMEs, which is interesting but nevertheless understandable in the circumstances. Where we disagree is that, although it seems to the Government to make economic sense for those bodies to be involved, that does not read across to the productive sectors of the economy, for which there will be challenges and obviously lots of things are still to happen but for which the case is still very strong that there should be some engagement. After all, if the Government are going to levy them for payment of the apprentices that they are going to take on, presumably they are already in contact with them—presumably, they have to write to and communicate with them—so it would not be very difficult to put a target in place in return for the money.
However, a lot of this will come up later. We have had a good start to today’s debates. I am grateful to all concerned. I beg leave to withdraw the amendment.
“( ) The apprenticeship targets set for prescribed public bodies under subsection (1) may include apprenticeship agreements entered into by sub-contractors working for the prescribed public body.
( ) The prescribed public body may in turn set apprenticeship targets for their sub-contractors.”
Baroness Sharp of Guildford
My Lords, in moving Amendment 49E I will speak also to Amendment 50A, which is purely consequential. The purpose of the amendment is explicitly to try to pull in the clout of public purchasing to encourage companies that are contracted to public sector organisations to take on apprenticeships, and to encourage private sector organisations to pick up the baton.
I have two very good examples of where this has been done pretty systematically. One is the Olympic Park in 2012. The noble Lord, Lord Gardiner, knows this example quite well. It is quite an inspiring example. The original target for apprenticeships in the park was 350, but it ended up with well over 450; 12% of them were black, Asian or ethnic minority, compared to 5% generally within the country; 64% came from London and 30% from the boroughs involved with the Olympics, the eastern London boroughs, so apprenticeships were being provided for local people. In addition, 6% were women, whereas in the construction industry only 3% of apprentices are generally women, so they managed to double that even though 6% is pretty abysmally low. They had only a 6% dropout rate from the apprenticeships, whereas nationally the dropout rate at that time was about 25%.
An evaluation was done and it is interesting to look at the success factors. The report says:
“Many activities were undertaken to deliver the Apprenticeship Programme”,
including:
“The tangible ownership and driving influence of senior project leads”.
That is very important. Senior management was involved and absolutely behind it. The report also says:
“Robust and effective working relationships were fostered with a number of colleges and training providers”.
This is what we are all saying these days: partnership between industry and the training providers—colleges, independent training providers and, for that matter, schools—is vital. The report also points to:
“Full stakeholder engagement that included relevant industry bodies”—
it was not just the firms themselves but the sector skills agencies, the funding agencies, national and local government, and the trade unions were all involved in helping to design the programme and get it moving. There was also:
“The implementation of a contractual requirement that three per cent of a new contractor’s workforce be apprentices”—
picking up the 3% that the Minister was talking about and deliberately putting a target on the subcontractors. The report also points to:
“Implementing a follow-up monitoring process, in partnership with the National Apprentice Service”.
It was followed up, it was well monitored and the figures are there. Finally, the report points to:
“The active promotion of construction as a positive career choice”.
The noble Lord, Lord Young, was quoting figures earlier. As he was saying, sadly we have not seen a very considerable increase in the number of apprenticeships in traditional areas such as construction and mechanical engineering. The big growth has been very much in the service sectors, particularly care, retail and hotel and catering.
I also quote this from the evaluation, because it makes an important point:
“Something very positive and supportive was in place in the environment that the ODA”—
the Olympic Delivery Authority—
“created on the build programme and the markedly low drop-out helped to promote apprenticeships among those employers who were reluctant to take on young people, some of whom feared a high turnover and a wasted investment”.
That was a very positive experience.
I also quote another example, which the noble Baroness, Lady Corston, who is sat behind me, will know. Last week we had in evidence to the Select Committee on social mobility and skills a presentation from Crossrail’s director of talent and resources, Valerie Todd. I found her testimony extremely impressive. Crossrail needed some 3,500 skilled workpeople. It realised that it had not nearly enough people, so it set about training them with three main aims: to ensure that those who came on site recognised what safety precautions were necessary; to inspire future talent; and to provide local jobs.
Crossrail has taken on more than 300 apprentices and linked them with local schools. It has gone to the local schools and recruited apprentices from areas where it has been working. Some 39% of them are from black, Asian and ethnic minority groups and 20% are women, quite a number of whom have come in through both the construction and civil engineering areas, but also to some of the secretarial and administrative areas. This also applied to subcontractors. Crossrail worked very closely with its subcontractors. As Ms Todd has said:
“They all knew that if they were going to bid for our work they were going to have to support us in achieving these goals”.
Both these examples of what has been achieved by a deliberate attempt to use public procurement to raise the numbers of apprentices in private companies are very inspiring. They have clearly achieved well. Both are planned examples. As drafted, the amendment purely says that:
“The apprenticeship targets set for prescribed public bodies under subsection (1) may include apprenticeship agreements entered into by sub-contractors working for the prescribed public body”.
It is not a “must”; it is a “may”. We are not saying that they have to, but it is a useful way of doing it and I suggest that it is one we should back. Using public procurement to promote apprenticeships is something that has been widely discussed and approved of. It would be nice to see the Government doing something about it. I beg to move.
Lord Young of Norwood Green
I rise to support the noble Baroness, Lady Sharp. She has quoted two contracts. I had a personal involvement with both, ensuring that there were targets and that we met them. They were both very good, but one of the last points that the noble Baroness made was that Crossrail ensured that not only the main company but its supply chain, which was distributed throughout the country, had an apprenticeship target. I would like to see a “must” rather than a “may”, but if the Government said that they accept the amendment, that would be a step forward and an important signal. I look forward to hearing the Minister’s comments.
Lord Stevenson of Balmacara
My Lords, we have three amendments in this group. The first follows up what the Minister said in response to the earlier debate. Apprentices are in jobs, and if they are in jobs, they should be paid as if they are in jobs, and if they are making a contribution, that would be a good thing to do, so our suggestion is that that should be paid the living wage. I would be interested to hear the argument against that. It has to be not only a training but a way of living. Anybody who does an apprenticeship will get the training, we hope, that will get them into remunerative employment. We heard the figures about how much it will benefit them over their lifetime, but they have to start somewhere. Starting below the current living wage will not be a great advertisement for these areas.
Baroness Neville-Rolfe
Sorry, I had thought that the living wage amendment was in a different group.
Baroness Sharp of Guildford
I regrouped it. Today’s list is different from the one that was circulated at Friday lunchtime.
Baroness Neville-Rolfe
Can we clarify what we are planning to speak about, so that I can answer in due order? I would be extremely grateful.
Lord Stevenson of Balmacara
My only excuse is that, as I explained, I am a bit underbriefed, having been thrown into the spotlight. I am also working from an earlier version. Since the Minister was in a not dissimilar situation in the previous group, perhaps she will bank my comments and reply to them at the appropriate point, if that would be convenient for her. Amendment 49H will come up later.
I want to endorse the points made by the noble Baroness, Lady Sharp, and, in a previous group of amendments, by my noble friend Lady Corston in relation to quality. There will be a transition to the new scenario sketched out in the Bill and put into force by the Act, but at the moment we are starting from a very low background. There are good areas of activity. We have all heard about Crossrail’s good record on this, and there are other employers who do a lot of good. The Olympics are a gold standard for the aspirations we have in his area. However, these groups make the point that it will be important to try to find a way of bridging between the current system and the new system so that only good-quality apprenticeships that extend learning and training opportunities for the young people taking them will be able to benefit from them.
Baroness Neville-Rolfe
I am very grateful to the noble Baroness, Lady Sharp, for explaining her amendment so clearly and for regaling us with the examples. I agree that the Olympic legacy was amazing in many respects, particularly in relation to apprenticeships and the partnerships in east London that she described. There is a debate on the Olympic legacy on Thursday, and I am sure I will be able to use the noble Baroness’s material to good effect.
My favourite example of good practice is Crossrail. I have been down the tunnel. I do not like racing cars, but I like Crossrail. What Valerie Todd said to the committee was extremely well put. Crossrail is good not only at apprenticeships but at giving contracts to firms outside London and to SMEs, so there are three good things coming together there.
I am also extremely grateful to the noble Lord, Lord Stevenson, for agreeing that I may answer on quality under a later grouping. Groupings moving around makes life difficult for those of us who are trying to shine a light into the proposals we are discussing in this Committee.
Amendments 49E and 50A relate to employment by subcontractors. They allow the employment of apprentices by subcontractors of a public body to be included in targets set for the public body. They also allow a public body to set apprenticeships targets for its subcontractors. There is a broad definition of subcontractor. Clause 18 will improve the capacity and capability of the public sector, ensuring that it benefits from the same positive impacts that apprentices bring to the rest of the economy.
Lord Young of Norwood Green
Obviously, I welcome that step in the right direction. When we looked at this issue, we had a figure of something like £2 million. I am not sure whether the Minister’s team will have this information but, if the figure is set as the Minister suggests at £10 million, what will be the percentage of public procurement contracts? There are two criteria—the £10 million and the 12-months criteria.
Baroness Neville-Rolfe
I think the answer is that we do not have the information with us. Perhaps we could take that away in the usual way and see what we can do in terms of an estimate and come back.
While I have the Floor, I will respond to the point about charities that was raised under the previous amendment but is also relevant to this because in the public sector work is often contracted out to charities. To be clear, if charities are not on the ONS list for the public sector, current thinking and emerging policy is that they will not be in scope. In practice, it is very unlikely that many charities would qualify in this process.
Baroness Sharp of Guildford
I thank the Minister for her response, and all those who have participated in this debate.
It is a little disappointing that she is not more forthcoming on this. I recognise that she has made provision for major public contracts but, first, as I understand it, that is to be negotiated with the contractors —it is not mandatory for large public contracts. Secondly, a large number of smaller contracts go through public bodies on which it would be useful for there to be some nudging. The “may” that I would have put in would very much be nudging those subcontractors to think about apprenticeships and think whether they could not carry them through. We are concerned about the lack of apprenticeships in small and medium-sized companies, and this is one way in which to encourage those companies to come up with proposals for apprenticeships. It would be an opportunity for the Government to nudge things in that direction. As the Minister made clear, big contracts began only in September this year, so we have a long way to go. What can be achieved, as is shown by the Olympic Park and Crossrail, is very considerable. I hope that we see something a little more positive from the Government some time. I beg leave to withdraw the amendment.
“( ) An apprenticeship target shall specify what proportion of the number referred to in subsection (2) is to be reserved for apprenticeships for young people—
(a) who were looked after children; and(b) who need help with physical or learning disabilities.”
Baroness Sharp of Guildford
My Lords, this amendment is concerned with care leavers and those with special educational needs and disabilities; its purpose is to open up apprenticeships to those two groups of young people. Some of them are perfectly able to undertake such an apprenticeship—I recognise that not all young people with special educational needs and disabilities are in a position to take up apprenticeships, but some of them are. The feeling is that it is important that they should have the opportunity to do so. Something like 8% of those with special educational needs and disabilities currently have apprenticeships of some sort, compared to 16% nationally.
Looked-after children, it is well known, achieve less highly at GCSE than their counterparts; they often miss out on parts of education, partly because they have a chaotic family background, or there may be a history of abuse in their background, and so forth. Barnardo’s has been very concerned about the issue of these young people leaving care. I refer to evidence that it gave to our Select Committee on Social Mobility, picking up a remark that one such young person made, that school really did not help them at all. We were told:
“These young people often leave school with few or no qualifications and need alternative options outside of the school environment if they are to achieve their potential. Some need provision that allows them to catch up on what they have missed and Barnardo’s services offer a variety of Level 1 courses … These young people also often want the option of practical-based learning, that clearly links to a real job. Barnardo’s services offer a range of qualifications that focus on occupational skills. These include foundation awards … NVG levels 1-3 and pre-apprenticeship programmes. The young people we work with can undertake these qualifications in a range of work areas including floristry; painting and decorating; business; horticulture; hair and beauty; construction; and catering”.
It is important to recognise that some of these young people, because of the chaotic backgrounds that they come from, need time to catch up and move forward. For example, Birmingham sets aside for care leavers a proportion of the apprenticeships that it takes on as a local authority. I think that a number of other local authorities do that.
In relation to those with disabilities, it is a similar story. Some of them need longer to catch up and get themselves ready for an apprenticeship than others, yet they benefit from them. Ofsted’s report states:
“Too few disabled people or those with learning difficulties become apprentices. In all further education and skills providers in 2013/14, over 16% of learners disclosed a learning difficulty or disability compared with only 8% of apprentices. Only one of the providers in our survey demonstrated that they had supported an apprentice with dyslexia to pass their functional skills test”.
We do not have my noble friend Lord Addington here.
Baroness Sharp of Guildford
I am sure my noble friend will talk about dyslexia. Ofsted said:
“Only one of the providers in our survey demonstrated that they had supported an apprentice with dyslexia to pass their functional skills test while one other had made adjustments for a disabled apprentice. However, such examples of providers and employers encouraging disabled people or those with learning difficulties to succeed on an apprenticeship were rare”.
It is important that such people are considered. Figures indicate that the proportion of apprentices who have learning difficulties or disability has decreased. It was 11% in 2010-11, and it decreased to only 8% in 2012-13. The success rate of all apprentices completing their framework rose considerably from 55% in 2005-06 to 73% in 2011-12. In the same period, the success rate for those with disabilities rose from 49.5% to 69.9%. That is a very high rate of success on the part of those with disabilities. The success rate is now 75%. The differential between the two is not very great.
Back in 2012, there was a comprehensive review—the Little and Holland review—Creating an Inclusive Apprenticeship Offer. It made 20 recommendations, including: clarifying funding to support apprentices with learning difficulty or disability; raising the awareness of providers and employers of funding sources, such as access to work and learning; the promotion of on-the-job support in terms of job coaching and mentoring; review and better monitoring of the self-declaration process so that underrepresentation by specific groups can be addressed; and the removal of barriers to access and completion in the form of qualification requirements. The Government seem to have been very slow in acting on those recommendations. Will the Minister update us on what is happening?
On barriers, English and maths remain a major issue. I do not know whether my noble friend Lord Addington will add anything on that. He has been very concerned about the shift to GCSE English and maths and the difficulty that some of these young people face. They used to be able to qualify with more examinee-friendly functional skills. I beg to move.
Lord Addington
My Lords, when I look at the apprenticeship system and the newly created apprenticeships, it is quite clear that there is a degree of fear within the system that the exam will not be taken seriously. This means that various standards have been clung to, particularly in English and maths, so that the apprenticeship will be as good as something else. This is quite clearly inappropriate if you do not take other steps for groups which have struggled in the traditional sector. Dyslexia was a classic example. As I dug into it, it became almost farcical. People were saying, “Employers like it”. Then you had employers saying that yes, they wanted functional skills so that people could do the job, not a qualification. That was said to me more than once. A degree of paranoia was building up because people were not saying, “This is a test that allows you to do a job”.
The groups mentioned here are always going to struggle. If you do not want them in the apprenticeship system, it is about time somebody turned round and said, “It’s not for you”, and provided something else for them. I do so hope that that will not be the case, because it means creating an entire new examination and qualification system. I hope that the Minister will be able to tell us that the Government are taking practical steps to allow people in.
Lord Young of Norwood Green
My Lords, I concur with all that the noble Baroness, Lady Sharp, and the noble Lord, Lord Addington, said. This problem has been raised again and again. I think that the noble Baroness said that there should be some examples of best practice employers. We need to look at why they can take on young people in these circumstances to become good-quality employees capable of completing apprenticeships. Let us look at those employers who are putting this into practice; there may not be many, but there will be some.
Baroness Sharp of Guildford
I cited the example of Birmingham City Council. Both Crossrail and the Olympic park set themselves targets.
Baroness Neville-Rolfe
My Lords, this amendment would require that, when setting public sector apprenticeship targets, the Secretary of State must also impose targets on public bodies in relation to the number of young people who were in care and those with special educational needs or disabilities. I am very grateful to the noble Baroness, Lady Sharp, for bringing the issue alive, for bringing up the findings of the Social Mobility Committee and for talking about Birmingham as an exemplar of good practice—because we must capture and celebrate good practice in all these areas. I was encouraged to hear of the improving completion rate that she mentioned.
The Government do not feel that it is appropriate to specify a proportion of the public sector target for young people leaving care or with physical or learning disabilities. We are trying to keep our targets simple. Apprenticeships are real jobs with training. As with all other jobs, employers have to make the final decision about who they hire for any apprenticeship that they have advertised. I know this having run apprenticeships myself when I was in business. Apprenticeships are employer led, so we are not able to ring-fence apprenticeships for particular groups as to do so would mean requiring employers to hire particular people for their vacancies. I am not sure that that would work.
However, although we would not want to interfere in employers’ decisions about who to recruit, we believe that more can be done to ensure that people from a diverse range of backgrounds are in the best possible place to apply for and secure an apprenticeship. The Government are committed to ensuring that care leavers are aware of the support and opportunities that are available to them. The Government provide full funding for apprenticeship training under the existing frameworks for entitled 19 to 23 year-old care leavers, and a number of local authorities already offer apprenticeships to care leavers, as has been said.
I have quite a long list of what we are doing to help care leavers, but in the interests of time I will set all that out in a letter, alongside information on what is being done in various different ways so that care leavers can access programmes such as traineeships to get the support they need to get ready for an apprenticeship. The noble Baroness also mentioned a review. In turn, I will mention Peter Little OBE, who undertook a detailed review for the Government of the inclusiveness of apprenticeships for people with learning difficulties or disabilities. Perhaps it would be helpful to set out the information I have in a rather extensive note. I have tried to explain why accepting this amendment would be a problem, but I will set all that out.
It is good to see the noble Lord, Lord Addington, here because of all that he has done on support and accessibility. Apprenticeships are accessible. In 2013-14, almost 40,000 people with disabilities or learning difficulties started an apprenticeship. We can do more. We can continue, as he said, to look at English and maths requirements within apprenticeships to ensure that they do not create a barrier, and the use of reasonable adjustments for disabled learners has been promoted through the skills funding rules. The SFA—the Skills Funding Agency—has published an evaluation of a series of diversity and apprenticeship pilots which looked at innovative ways to increase accessibility for underrepresented groups.
We judge that the measures we are undertaking can give confidence that the Government are ensuring in the right way that apprenticeships are accessible for people of all backgrounds, including care leavers and people with special educational needs and disabilities. I hope that noble Lords have found my explanation helpful and will look forward to my letter, and that on this basis the noble Baroness will withdraw her amendment.
Lord Addington
When the Minister does provide that letter, might it include some guidance about compliance with the Equality Act? People tend to say, “Oh no, that is different, that is not for us”. It needs to be stated quite clearly that the colleges and employers that are going through this process know that they are part of the legal framework and are not in some way exceptional. It is my experience that people are hiding behind the fact that we are different.
Baroness Neville-Rolfe
I will certainly undertake to look at that point and discuss it further with the noble Lord, if I need further clarification, so that I can give him a proper answer.
Baroness Sharp of Guildford
My Lords, I am grateful to the Minister for her response and I look forward to the letter that she is going to send me. I hope that she will update us on precisely what is happening in relation to the Little report. My information is that not enough has been done already and it would be very nice to see a spur applied to some of the implementation.
Again, I am a little disappointed by the Government’s response. They do not hesitate to set targets not only for local government but for all kinds of public bodies, yet they are not prepared to write into those targets a much lesser target in terms of taking on young people who we all know need to be offered these opportunities. Access is a recurring theme whenever we talk about apprenticeships and, for that matter, education and training provision for younger people. There is no doubt that access is difficult for them. Opening the doors by means of something relatively gentle in terms of a target for these bodies to aim for need not be as prescriptive as the Minister suggests; it could just nudge them in the right direction.
I look forward to the Minister’s letter and may return to this issue once I have read it. I beg leave to withdraw the amendment.
“( ) The Secretary of State may by regulations require a public body or private body to pay the living wage to those who have an apprenticeship.”
Lord Stevenson of Balmacara
My Lords, I have already spoken to the amendment but, to sum up, the point of the question is that we are asking the Minister to give us a reason why those who join apprenticeships should not be paid the living wage.
Amendment 49H in this group is about the need to ensure that managers supervising apprenticeship programmes have appropriate training. There is a well-established discourse on the question of whether management, particularly in private sector companies, is up to the job of increasing productivity, growing the economy and providing the jobs of the future. That receives its main focus around training and there is plenty of evidence on this issue, which I am sure others will wish to speak to. It would be a sensible Government who thought through all the issues relating to this new duty on the public sector, in particular, if it were also applied to the private sector, to ensure that management was up to the task concerned.
We have other amendments on the details needed to create a better policy on apprenticeships more generally and the role that they play in the development of the economy, but Amendment 50AC sets out—I hope for public bodies and for private companies, but if companies are not included then just public bodies—the sort of information that will be needed if we are to make a good job of this. We hear too much in anecdote and we do not get enough publication. The Minister said that she will write with such a lot of information already. Maybe she has access to the sort of information listed in this amendment, but we are interested in whether we can get a bit more of a sense of the progression, success and value that people are placing on these apprenticeships. This would be a good place to start. I beg to move.
Lord Hodgson of Astley Abbotts
My Lords, I have an amendment, Amendment 50AA, in this group. It is a probing amendment but it ranges slightly more widely than the focused questions that the noble Lord, Lord Stevenson, put to the Minister.
The overall purpose of my amendment is to ensure that all apprenticeships have the appropriate level of quality—an issue that came up in various comments earlier. It does so by adding a subsection to the end of new Section A9 in Clause 18 on public sector apprenticeship targets, requiring the Secretary of State to set out minimum standards for apprenticeships. It also requires the Secretary of State to consult on what is required. In tabling this, I have been helped, advised and encouraged by the Engineering Employers’ Federation, which is somewhat concerned about the lack of clarity on the position as a whole.
That having been said, we had a debate on Tuesday last week on the draft English Apprenticeships (Consequential Amendments to Primary Legislation) Order, which the noble Lords, Lord Stevenson and Lord Young of Norwood Green, have spoken to, and which was replied to by my noble friend Lord Courtown. A number of questions were asked in that meeting, some of which cross over with what we are discussing this afternoon. I received the answer from the department as I came into the meeting this afternoon, so if I am not absolutely up to date with what the responses are to the questions raised, it is because I have only had it for about half an hour.
I very much support the Government’s policy of creating 3 million apprenticeship starts in this Parliament mentioned in paragraph 18 at page 6 of the Explanatory Notes. There is a real need for vocational training. It could equip people better for practical work and give them a more satisfying, satisfactory and long-lasting permanent job than, dare I say it, a 2.2 in media studies, which may not equip them for an enormous amount. This relates to the point made by the noble Baroness, Lady Corston, on the quality of courses available.
The Government’s ambition is very great. It is worth while pointing out that last year there were 696,000 live births in England and Wales and 56,000 live births in Scotland, so a total of around 750,000 live births. Therefore, in a five-year period you have 3,750,000 live births, if those numbers are maintained, and we are talking about creating 3 million new apprenticeships over the next five years. That is 80% of the people who will have been born. I know they are not going to be apprentices in their first few years, but it is the scale of what we are thinking about. Of those currently being born in a five-year period, 80% will be expected to take up an apprenticeship.
Lord Snape (Lab)
It would be helpful to me and perhaps to the Committee if the Minister would indicate whether she intends to refer to the matter arising from the amendment so ably moved by the noble Lord, Lord Hodgson, on which I congratulate him. It is not often that I find myself agreeing with much of what the noble Lord says. Perhaps I may say that I consider him to be on the more progressive side in these matters. After all, we sparred on a Bill earlier this year when he defended resolutely and ably the brewers and their incentives. To find him now speaking in such a progressive manner, albeit on behalf of the Engineering Employers’ Federation, is a pleasant occurrence. Arising from the noble Lord’s amendment, it would be helpful if the Minister could indicate whether she will speak about the quality of apprenticeships on this amendment or, as I suspect, on the next group. My response depends on her further response to the noble Lord on this group.
Lord Young of Norwood Green
I support the intention of the amendment in the name of the noble Lord, Lord Hodgson. I will not damn it with faint praise or criticism of previous actions. That has already been done by my noble friend.
Lord Snape
To be fair, I was praising wholeheartedly the intervention by the noble Lord, Lord Hodgson. I do not think my noble friend should dilute my praise in that manner.
Lord Young of Norwood Green
Perish the thought: my humble apologies to my noble friend. I welcome this, perhaps because I had anticipated this debate. The Minister indicated that she would be dealing with quality, so I presume that this is the occasion on which she will deal with it. In the debate on the statutory instrument, I raised the issue of the Ofsted report quoted in the Times, which states:
“Some apprentices were not aware that they were classed as such, while others did not receive broader training or support to improve their English and maths. In the retail, catering and care industries, inspectors found apprentices cleaning floors, making coffee or serving sandwiches. Other employers used apprenticeships—which are wholly government-funded for those aged 16 to 18 and part-funded for older apprentices—to accredit the existing skills of their staff, Ofsted said. Sir Michael will tell business leaders in the West Midlands”,
where this survey took place,
“that employers, teachers and training providers are among the ‘guilty parties’ who must improve. ‘The fact that only 5 per cent of our youngsters go into an apprenticeship at 16 is little short of a disaster,’ he will say”.
That is a really serious and worrying criticism given the number of apprenticeships in the areas that he described.
The noble Earl, Lord Courtown, gave us a letter today. I have had a chance only to skim through it and think about whether it really does give an assurance that quality will be capable of being achieved in the drive to increase by a significant amount the number of apprenticeships. In the letter he says:
“An ‘approved English apprenticeship agreement’ carries the status of a contract of service. That means that employment and health and safety laws apply. The apprenticeship agreement confirms that the apprentice is undertaking an apprenticeship and specifies the standard they are working towards completing”.
That is good. I will not quote everything in the letter, but he then says:
“In addition to this, we have also introduced a new ‘Statement of Commitment’ which is signed by the employer, training provider and apprentice and sets out the key expectations, roles and responsibilities of each party involved in the apprenticeship and complements the approved English apprenticeship agreement”.
That is okay. However, what I really wanted to know was how we are going to check that, though they may have signed these agreements, they are actually delivering what they say they will. He said:
“In addition, the Skills Funding Agency … runs the apprenticeships helpline which was given an expanded remit in the summer, enabling anyone involved in an apprenticeship—not just the apprentice—to raise concerns about any element of how the apprenticeship is being delivered”.
The next sentence I found really interesting and I would welcome a comment from the Minister:
“The SFA have rigorous checks in place and have embarked on a programme of staff training to ensure that these issues are dealt with effectively”.
What exactly does that mean? There are an awful lot of apprenticeships going on. The noble Lord, Lord Hodgson, talked about mystery shoppers. I do not know whether the SFA will be the mystery shoppers, but a serious point is being raised. How are we going to ensure a number of things: that the quality of an apprenticeship is actually being delivered as per the contract, and that the training provider, in allocating a young person to an employer, is confident that that employer has a track record of delivering apprenticeships? How will we ensure that it is a safe working environment? I raised this issue previously. We had the appalling situation, I think just over a year or so ago, where a young apprentice went to work in the morning and never returned home—they died in an appalling workplace environment. Are we serious about enhancing the status of apprenticeships and ensuring that parents feel confident about the quality of apprenticeships?
The comment in the letter:
“The SFA have rigorous checks in place and have embarked on a programme of staff training to ensure that these issues are dealt with effectively”,
refers back to a point raised by my noble friend Lady Corston, who is not currently in the Room. She talked about young people employed for very short periods of time in what purported to be an apprenticeship but clearly was not. I have not heard of any periods as short as that, but certainly the Government declared that they would not support apprenticeships being described as such if they were for less than a year, which most people would say is about as short as one could get for an apprenticeship. Some might express concern that the period of time ought to be longer. However, my concern is whether the Skills Funding Agency will be able to deliver for the Government in terms of ensuring that there is real quality in apprenticeships.
Baroness Sharp of Guildford
My Lords, we on these Benches broadly agree with what the noble Lord, Lord Hodgson, said. There is no doubt that the push for numbers has meant quantity at the expense of quality. Only 6% of 16 to 18 year-olds go into an apprenticeship and about 80% of the apprenticeships that have been created have been taken up by people who are already in jobs. They have been doing a relatively low-level apprenticeship—what is known as the level 2 apprenticeship—which does no more than rubber stamp, giving them a qualification for the work that they have already been doing.
All that is detailed in the Ofsted report. I point out to the noble Lord, Lord Young, that Ofsted does inspect apprenticeship providers, and a report such as this, which is very damning indeed of the current system of apprenticeships, should wake the Government up to what has been proceeding. My noble friend Lord Stoneham and I have a subsequent amendment about higher-level apprenticeships. It is very sad that the number of apprenticeships at the moment undertaken at higher levels—even at level 3, which is the equivalent of A-level, let alone the proper technician, the old HND level, level 4, or level 5—is minimal. We are talking about 1% or 2% of apprenticeships. Those are the intermediate-level qualifications and skills that we desperately need in this country, but we are just not training people to that level at the moment.
To some extent, the whole business of creating 3 million apprenticeships is pulling the wool over people’s eyes as to precisely what we are doing about skills. I think that the Government are well aware of that and many of the reforms in hand at the moment are an attempt to raise the quality and answer the sorts of questions asked by the noble Lord, Lord Hodgson.
In Clause 19, the Bill defines what is a statutory apprenticeship. That is an important beginning, but we need to keep a wary eye out as to precisely how all this is carried through: what a statutory apprenticeship means and the quality of provision.
Baroness Byford (Con)
My Lords, I apologise to the Committee that I could not be here at the start of the sitting. I shall speak in particular to my noble friend Lord Hodgson’s amendment, because other amendments in this group state “may”, while that of my noble friend states “must”. That may make it more difficult for the Minister, who will probably say that she does not like that wording, but I hope that she will take on board the thrust behind it.
Having listened to the discussion around the Committee this afternoon, we are clearly all concerned about having minimum standards. There is nothing worse than people going into training or apprenticeships and coming out feeling that it was not worth while, there is no job prospect at the end and they have totally wasted their time. That is very bad for the individual, but neither is it good for the employer or the college helping them.
I would like to add two things to what my noble friend said so ably. First, two years ago, the Lord Mayor of London at the time, Fiona Woolf, put a lot of force behind apprenticeships within City livery companies. As people around the Committee will know, the City livery companies were guilds in the olden days and set standards, and many still do today. Secondly, the Minister knows of my interest in agricultural colleges. I was visiting an agricultural college local to me recently, opening new facilities to enable young people to have a better start. I was talking to one or two of the apprentices. It is interesting that one or two who came in, particularly on the engineering side, had not really thought of going on to take further degrees or any further educational training, but had become so inspired by what they were learning at that college that one or two, although not all of them, reconsidered doing a further level of training, which I thought was hugely encouraging.
What I want to add my voice to is the point about the quality of the apprenticeships being offered—and assessing it is absolutely crucial—and the job prospects for those young people afterwards, whether it is going in for further training or whether there is a job at the end. Some I talked to were very clear that, after the training that they were getting, they were very hopeful that a job would follow because they had gained skills that a couple of days earlier they certainly had not got. From listening to the various contributions from around the Committee this afternoon, I am well aware that this is not a common factor among everybody; there are some good training schemes, but some are poor.
In my noble friend’s Amendment 50AA, he calls for,
“minimum standards for an apprenticeship agreement”,
which should be looked at after the first 12 months, and then the Secretary of State should consult those that the Secretary of State,
“considers appropriate on the details of such regulations, prior to publication”.
My noble friend’s amendment has given us a good steer, and I hope that the Minister will be able to give us something positive. Clearly, with my noble friend’s amendment, it is a question not of “may” but of “must”, providing a great direction to this Government on how we need to improve the quality while at the same time encouraging more people to take up apprenticeships as a further step to wherever they go in life. I support my noble friend’s amendment.
Lord Snape
My Lords, in listening to the debate so far, I think that one thing that unites all of us in the Committee is the desire to see proper apprenticeships in future years. Young people are understandably cynical about what they see as the exploitation that has often taken place in many of the so-called apprenticeship schemes that were introduced. As the noble Lord, Lord Hodgson, said, they are not proper apprenticeships as we would understand them. I do not blame the present Government for that situation, or even their predecessor; these things have been going on for many years. I recollect more than 40 years ago, as a very junior member of Harold Wilson’s Government, which dates me somewhat, learning with some degree of concern about what was happening with the youth training schemes. They were introduced in all good faith by a Labour Government but abused by employers, who took on youngsters and promised them jobs in future that never materialised or for which they were not properly trained. In one case that stuck in my mind, they were offered a permanent job, but only at YTS rate, which was, of course, less than the traditional rate for the job. So there is a widespread concern and cynicism among young people about these schemes.
A few weeks ago, we had a debate about apprenticeships on the Floor of the House, and I drew your Lordships’ attention to one or two of the abuses taking place at that time. I do not wish to repeat them chapter and verse, but it is instructive that one scheme in particular—an apprenticeship advertised by Subway, the sandwich maker—reverberated through the technical press around the world. The job had been advertised as an apprenticeship; the description was “a sandwich architect”. I asked whether somebody taking that particular qualification would move from white to brown bread or cut the crusts off or move to gluten-free bread before six months was up. But one thing that that job certainly did not do was qualify any young person in any meaningful way towards a better future.
There was another so-called apprenticeship advertised by a firm of estate agents; the young person concerned was supposed to go around and look at various properties, to check advertisements in the trade press to see where the properties were advertised for sale and see whether it was possible to lure the owners of those properties from the books of one company to another. To do that job one would inevitably need a car. There was no mention. Indeed, the young person who came to talk to me about this said he followed this up and there was no fuel allowance or any other allowance for the time involved in the role. He was supposed to drive around, presumably at his own expense. He was 21 years old and possessed a car, but, as he said, at £2.37 an hour—which was the advertised apprenticeship rate—he did not see that it was possible for him to do it and how it would qualify him for the future.
I hope the Minister can give the Committee some reassurance about the future. I welcome the Government’s intention—I am not quite sure how they will implement it—to outlaw some of the practices. The noble Lord, Lord Hodgson, referred to people looking for grants in the way that they do. Human nature being what it is, that is how certain people react. It does not give young people any great hope for the future. Indeed, I have used this word twice before, but I shall use it again: it gives them a great degree of cynicism about the way their talents are exploited.
As my noble friend Lady Corston said, for those of a certain generation, apprenticeships usually, if not inevitably, meant in engineering, heavy industry and that sort of area. It was accepted that although you might be paid a little bit less than some of your contemporaries, after a five or six-year apprenticeship you were well qualified and could see a way forward in the world of work for the rest of your life. It is not possible to say that under schemes like the one I have just mentioned. I will be interested to hear from the Minister what plans she has to stop that sort of exploitation of young people and to give them some genuine hope that the work they do as apprentices will properly qualify them for the world of work in future.
Lord Hodgson of Astley Abbotts
I place on record my thanks to the noble Lord, Lord Snape, for his very welcome but quite unexpectedly effusive support for what I have been saying. I hope he will forgive me, but when we get to Amendments 53ZC and 53ZD, about the pubs code, at about 7.30 pm, normal service will be resumed.
Lord Snape
I hope that we are not going to do any such thing at 7.30 pm. I understand that we are dealing with pubs on Wednesday, not today. I look forward to the noble Lord adopting his customary reactionary—if I may say so—position as far as pubs and publicans are concerned. Of course, I will adopt my usual progressive position, to use phraseology that would make Jeremy proud of me, I am sure.
Baroness Golding (Lab)
How is this section of the Bill related to late payments, especially for small and medium-sized firms? With the best will in the world, you can have an apprentice for a year and suddenly late payment means that that firm is struggling to maintain the apprenticeship. Is there anything in this section which relates to the first part about late payments?
Baroness Neville-Rolfe
My Lords, I welcome all noble Lords’ comments. It was good to have the contributions of the noble Baronesses, Lady Byford and Lady Golding, and the noble Lord, Lord Snape. I think there is a large element of agreement in the Room that quality is important. I will come on to how we are going to achieve that.
I will start by addressing Amendment 49G, on the living wage. As I have made clear previously, we believe that apprenticeships provide the chance to gain new skills and knowledge, which employers really value. The Government are committed to improving living standards, particularly for the low paid, and from 1 October 2015 the national minimum wage rate for apprentices was increased to £3.30 per hour, which was significantly higher than the £2.80 per hour recommended by the Low Pay Commission and represented a rise of 57p per hour for the apprentice. It is estimated that 75,000 apprentices will be covered by this new rate.
However, that is not a guide to what employers should pay, and employers are encouraged to pay higher where they are able to do so, with many employers choosing to pay more than the minimum rate. But we must recognise that apprentices are, at least initially, less productive than other workers. We do not want to stop apprenticeships—especially in sectors such as crafts, which are close to the heart of noble Lord, Lord Young—by making them unaffordable to employers. As an economist by background and a businesswoman, I assure noble Lords that that can be a risk.
Everyone who is entitled to the national minimum wage should receive it. We recently announced measures that will strengthen its enforcement. The new national living wage is an essential part of moving to a higher-wage, lower-tax, lower-welfare society. Work must pay for hard-working people in the UK. The national living wage will be introduced from April 2016 and will be set initially at £7.20 per hour. Apprentices aged 25 and over who have completed their first year will be entitled to this rate of pay. It will of course be properly enforced.
Amendment 49H is intended to enable the Government to make regulations to put in place apprenticeship training for supervisors of apprenticeship programmes. As my noble friend Lord Courtown said in his famous letter, complaints can also be made to the Skills Funding Agency, which is responsible for running the National Apprenticeship Service, which helps employers deliver apprenticeship programmes within their organisations. This includes a website and a helpline designed to support both employers and potential apprentices. Through the website, both small and large businesses can find a detailed breakdown of how they can best work with training providers to deliver an apprenticeship programme, including what the terms for offering an apprenticeship are. For businesses with fewer than 250 employees, the National Apprenticeship Service has a dedicated small business team, which specialises in meeting and supporting the needs of smaller employers.
Of course, we must remember that the majority of apprentices are, first and foremost, employees, as was emphasised by the noble Lord, Lord Snape. Employment and health and safety law apply to these apprentices just as they do to other employees—I am glad to have the opportunity to say that today—but we want to ensure that apprenticeships are as simple for businesses to offer as possible, as we know that this will lead to more opportunities for young people.
Amendment 50AA would require the Government to make regulations setting out further minimum standards for apprentices within 12 months of the Act being passed. I thank my noble friend Lord Hodgson for his support in this area, and I look back with approbation at the points made by my noble friend Lord Baker of Dorking at Second Reading in this important area about how we change things for the better and how we get quality right.
Turning to quality, it is worth saying that the Government have already taken steps to improve the quality of apprenticeships. Short-duration apprenticeships have been removed from the system; apprenticeships must provide substantial and sustained on- and off-the-job training and last a minimum of 12 months; apprenticeships must be real jobs, leading to competency in an occupation; and they need to deliver transferable skills, including English and maths, so that people can progress their careers.
I do not agree that apprenticeships have to be old-fashioned. I have been struck by the way employers are developing new standards to ensure that apprenticeships meet the skill needs of their sectors and provide quality. The published trailblazer quality statement sets out a range of measures to retain and improve quality, including the requirement for all apprenticeships to last at least 12 months. The new standards will replace existing complex frameworks with short, simple, accessible standards written by employers in language they understand.
The noble Lord, Lord Young, and my noble friend Lord Hodgson rightly referred to the Ofsted report. It criticises the quality of provision as it has been, not that which is being designed and put in place through our reforms. As I was explaining earlier, we are in transition. Putting an end to poor-quality training lies at the heart of our reforms. Ofsted’s report backs up the findings of our 2012 review and provides further evidence in support of our decision to put employers, rather than trading providers, in the driving seat.
My noble friend Lord Hodgson asked if he could offer a bright researcher an apprenticeship. An employer can offer an apprenticeship, providing that the employer satisfies the Skills Funding Agency’s rules and requirements to the approved English apprenticeship standard. People can always complain to the SFA if they are not happy. On the face of it, I think my noble friend should be encouraged, but clearly the apprenticeship must be of the right quality and duration; he must be a model employer.
We are also introducing more rigorous testing and grading at the end of the apprenticeship to ensure that apprentices are reaching full occupational competence—again, the detail was set out in the letter from my noble friend Lord Courtown. I can also confirm that, from 2018, we will use apprenticeship outcomes data to produce performance tables for 16 to 19 year-olds. This will sit alongside apprenticeship success rates, which are already published by BIS, and will help to inform choice for young people and employers and drive up the quality of provision.
The success of the minimum standards and the further provisions to improve quality is beginning to be borne out by apprenticeship evaluation reports. In 2014, they found that 89% of apprentices and 82% of employers were satisfied with the apprenticeship respectively. I mention that, but I do not think that we should rely on it; the quality points raised are important. We do not judge that the Government should be committed to placing further requirements within a set framework. It is important that employers, providers and apprentices have the time to engage with the apprenticeship reforms.
On Amendment 50AC, the information requirements as currently set out in the clause enable the Secretary of State to understand whether public sector organisations are meeting their targets and to ensure that the bodies are publishing that information to increase transparency. The Government intend to minimise the administrative burden associated with reporting under the clause. Any additional information prescribed by the Secretary of State will be related to the apprenticeship target.
We have been discussing the need for more quality here, but people out there are also concerned about potential bureaucracy in the new arrangements, and we must have a balance. We are unable to agree that it is appropriate to mandate public sector bodies to provide and publish the additional information.
Finally, the noble Baroness, Lady Golding, asked about the link with prompt payment. There is no link—except that they are in the same Bill, which is good for us to reflect on—between the apprenticeship clauses and the late payment provisions, but they are both designed to promote enterprise and growth.
I hope that in the light of those comments noble Lords will feel able not to press their amendments this evening.
Lord Morris of Handsworth (Lab)
I bring to the attention of the Minister and, indeed, the Committee that of those affected by the closures in the steel industry among the worst sufferers are hundreds of apprentices. They have not got the same facility or ability to change and move employment. In the periphery of this debate, I ask the Minister to take a very good look and have some consultation on how apprentices can be placed, or give some measure of support for continuity of, if not the practical dimension of their learning, at least the academic dimension.
Baroness Neville-Rolfe
I am extremely grateful to the noble Lord, Lord Morris, for intervening. I can certainly say that this is a very important point. I know that the task forces set up to look at what can be done for employees who, sadly, lose their jobs are on to this point on apprenticeships. I know that in Redcar some new jobs have already been found, but I am certainly happy to talk to the noble Lord further. I am happy to put that on the record.
Lord Snape
Will the Minister disabuse either me or the noble Lord, Lord Hodgson, on our progress today and say whether we intend to move on to the clauses that refer to the pub companies, in the way that the noble Lord obviously feels that we are about to do?
Baroness Neville-Rolfe
Is the noble Lord asking about the target for today’s discussion?
Baroness Neville-Rolfe
I think we are trying to get to Amendment 52Q, not to pass it—so he can go to the pub.
Lord Snape
We can go to the pub after Amendment 52Q, as the noble Baroness said, but I am grateful for that clarification. I hope that the noble Lord, Lord Hodgson, is not too disappointed.
Lord Hodgson of Astley Abbotts
I would be delighted to discuss the issue of a pub code with the noble Lord at any time. All I would say is that he should not describe me as “reactionary”, but as “realistic”.
Lord Young of Norwood Green
I do not know whether the noble Baroness has a copy of the letter that the noble Earl, Lord Courtown, sent to us, but in it he says:
“In addition, the Skills Funding Agency … runs the apprenticeships helpline which was given an expanded remit in the summer, enabling anyone involved in an apprenticeship—not just the apprentice—to raise concerns about any element of how the apprenticeship is being delivered”.
I did not get a response on the concerns expressed in the Ofsted report and in anecdotal accounts. The letter goes on to say:
“The SFA have rigorous checks in place and have embarked on a programme of staff training to ensure that these issues are dealt with effectively”.
I like the promise. I would put against it “CAD”—“check against delivery”. How will it do it, given the vast number of apprenticeships? That is not to dismiss the fact that Ofsted will also do some work on this, but there is a commitment in that letter.
Setting the standards is one thing. Having a defined framework in understandable language is great. The problem we have is those employers that might do that, but fail to deliver. It says in the legislation that they will be punished and fined. I am interested in that because it might help, but I am far more interested in seeing whether the Skills Funding Agency has the ability to monitor apprenticeships to ensure that they are delivering on quality as well as quantity and how it will do it. If the Minister does not have an answer that is okay; I am quite happy to accept it in writing. However, it is a part of the Government’s commitment to raising quality as well as quantity.
Baroness Neville-Rolfe
My Lords, I stand by what my noble friend Lord Courtown put in his letter. I will not delay the Committee by repeating it, although people are very welcome to a copy. Obviously, we understand that ensuring quality is an absolutely key part of our reforms. That is what we are saying. The SFA has an important part to play here. As I have said, Ofsted also has a part to play. We will be bringing in the quality control system that was described.
Although some people were concerned about the changes to apprenticeships, we are changing the system and we will have to make sure that the surrounding infrastructure is appropriate and appropriately resourced —we can certainly discuss that further—but that is why I did not repeat the points my noble friend made about the introduction of registers and quality control over training providers.
Lord Stevenson of Balmacara
I thank noble Lords for contributing to this debate. It has certainly raised a number of issues, which we will probably have to come back to on Report. In the interim, of course, we will look forward to seeing what is now becoming a voluminous correspondence from the Minister. In the previous Parliament, she had to take on the very difficult task of matching the noble Viscount, Lord Younger, who set standards beyond any we had seen before. We look forward to her matching that.
We have given this area a good look. Although we may come back on one or two issues, I beg leave to withdraw the amendment.
“( ) One year after this section comes into force, the Secretary of State shall publish a report on the impact of any apprenticeships levy associated with the new target in subsection (1) on the—
(a) quantity and quality of the apprenticeship scheme offered by public bodies and companies, and(b) the impact on existing funding for training designed for non-apprenticeship trainees.”
Lord Stevenson of Balmacara
My Lords, our Amendment 49J and Amendment 52 in the names of the noble Lord, Lord Stoneham, and the noble Baroness, Lady Sharp, are really two sides of the same coin. The worry we share, I think, is that the apprenticeship levy system, which we have already discussed and which is raising some concerns among those who will be involved in it, may have an impact on existing training and expenditure. Obviously, if the result of bringing in the levy is to reduce the overall quantum of money that is going into training, that would almost certainly be a bad thing. We want to grow the training budget, not reduce it. I look forward to hearing what the Minister has to say about that, as well as about the issues that are raised in Amendment 52. I beg to move.
Baroness Sharp of Guildford
Amendment 52 is in my name and that of my noble friend Lord Stoneham. As the noble Lord, Lord Stevenson, said, both these amendments are asking for a review. We have been talking about the quality of apprenticeships. I say in passing that although many of us have been rather negative, there are quite a number of extraordinarily good apprenticeships in operation.
I spoke earlier about what happened at the Olympic Park, and that is an example of how apprenticeships can be created, but one only has to look at companies such as BAE Systems and Rolls-Royce, which offer an absolute gold standard in terms of apprenticeships. Other companies are aspiring to do the same, and those sorts of apprenticeships are extraordinarily good. They offer not only higher-level apprenticeships but a route to progression. Sadly, there have been some bad examples—picked up by, among others, Ofsted—and it is important that in pushing forward the number of apprenticeships, they aspire to best practice rather than picking up worst practice. The idea of producing an annual review and asking the Secretary of State to report on such an annual review is to pick up this whole notion of the quality of apprenticeships and make sure that they are the sorts of apprenticeships that one would like to see.
The other aspect of this is that this part of the Bill is expressly about creating apprenticeships in public sector bodies. Our Amendment 52 asks for a review of how far this is working within the framework of the public sector and what impact it is having in both public and private sectors. However, I think we have had enough discussion of the general issue of equality and the need to promote equality that I do not need to go any further.
Baroness Neville-Rolfe
My Lords, I am grateful for these amendments and for the noble Baroness, Lady Sharp, saying that there is much that is good. Actually, it is not only at the top end—the engineering apprenticeships that she described—but some of the retailers and the hospitality companies produce superb apprenticeships, which take some of the poorest and least well educated people in society and allow them to get on and progress in an awesome way.
We have discussed many of the issues underlying Amendment 49J because it talks about quality as well as quantity and, of course, Amendment 52 mentions funding. The Chancellor announced the Government’s intention to introduce the apprenticeship levy in this summer’s Budget—a surprise announcement, I think. It will be used to fund and improve the quality of apprenticeships. We need a reversal, as we have all been saying, in the trend of employer underinvestment in training, which has seen a decline in the amount and quality of training undertaken by employers over 20 years. This was highlighted in the report by the noble Baroness, Lady Wolf, published in July this year, which recommended the introduction of a levy to fund the apprenticeship programme.
Past approaches to tackle this decline have relied on voluntarism and a significant government subsidy aimed at encouraging private funding. However time spent by employees in training has continued to decline. The levy is a model that is working successfully in more than 50 countries around the world, which is why we have decided to adopt it here. We will be putting employers directly in control of their apprenticeship training. Employers are currently leading in the development of apprenticeship standards. With the levy, they will be able to decide to which apprenticeship training providers they wish to direct funding.
The Government consulted on the key levy proposals during the summer and we received more than 700 responses. We are currently analysing them and will use what employers and others have told us to try to address concerns and meet employer aspirations for growth and quality. The Chancellor will be announcing further details on the levy as part of the spending review announcement later this month. I believe it is premature to seek to impose a reporting schedule on the impact of the levy. The levy will not be introduced before 2017 and there is further work to be done on the detailed implementation of the policy. At this stage, seeking to impose new reports within a 12-month period would be unlikely to provide robust evidence.
However, I can say today that we will continue to publish comprehensive quarterly data on apprenticeships through the Government’s published statistical first releases, published by the SFA, which include data on learner numbers by age, as well as by region, gender, ethnicity, disability, level and sector. We also publish research into the impact of apprenticeships on employers, including the employers’ survey, which monitors the extent to which apprenticeships are meeting the needs of employers and identifies aspects that are under- performing, with the next survey due in 2016.
When we introduce the apprenticeship levy, we are proposing to put in place a full and structured evaluation programme and publish the results. We expect this to address the points raised by noble Lords in relation to the impact on employer investment, the mix of programmes being delivered and their quality. I ask for patience, as we intend to publish more details on the levy shortly. Amendment 49J also referred to funding for non-apprenticeship schemes; funding for those will also be a matter for the spending review. The noble Lord’s Amendment 52 relates to apprenticeship schemes in England and Wales. While apprenticeships in England are the responsibility of the Secretary of State, apprenticeships in Wales fall within a devolved area of policy.
Lord Stevenson of Balmacara
I hesitate to interrupt, but I want to make sure that I have got my point across correctly. In relation to the non-apprenticeship spending, I was not asking what the Government are spending on that. It was a question of the quantum of spending across the country, which obviously largely is sui generis to every company. The worry is that the impact of the Government taking what is effectively a tax on apprenticeship training may impact badly on that. Although it may be very hard to get since responsibilities are split between BIS and DfE, in the figures that the Minister is talking about, it would be very helpful if there could also be some reporting of the exact quantum at the moment and how that will change over the next few years. I am sure it would be a good thing to do anyway.
Baroness Neville-Rolfe
We always like to do post-implementation reviews. We like good evidence and good figures. The point is well made. Where responsibilities are shared between departments, that can sometimes be difficult. I cannot emphasise more strongly that we are trying to create a successful policy, which will require us to see what is happening. Clearly, the past is the past. We have been spending something like £1.5 billion a year on apprenticeships. In the future the system will be different. There will be a levy. I will certainly try to ensure that in our evaluations we find out how things are changing and how effective that has been. We should be learning on the job.
Lord Stevenson of Balmacara
I thank the Minister for her comprehensive response. I beg leave to withdraw the amendment.
“A10A Public sector support to help establish apprenticeships in small businesses
(1) The Secretary of State, acting in conjunction with the Small Business Commissioner, may by regulations require a prescribed public body to provide arrangements which facilitate small businesses (as defined in section 2 of the Enterprise Act 2015) entering into apprenticeship agreements.
(2) The arrangements specified in subsection (1) may require the prescribed public body to provide resources on an interim basis to help the small businesses establish a joint body to oversee and manage the negotiation of apprenticeship agreements which meet the conditions set out in section A1(3)(a) and (b), and to ensure that the terms of the agreements are adhered to.
(3) Any resources provided under the terms of subsection (2) shall be for a specified period.”
Baroness Sharp of Guildford
My Lords, Amendment 50B relates to an issue on which we touched earlier; namely, the question of small and medium-sized businesses and the availability of apprenticeships. The difficulty is that many small and medium-sized businesses find it quite difficult to organise apprenticeships. The Government have done their best to cut back the amount of bureaucracy involved; nevertheless there still is quite a lot. One only has to read Clause 19 and see precisely what is and is not a statutory apprenticeship to recognise that there is a lot of paperwork, including, initially, the setting up of an agreement, the contract with an apprentice and getting the terms of the contract correct and so forth, and subsequently making sure that the various points in the agreement are fulfilled. If you are a small or medium-sized business employing a dozen people or less, the extra bureaucracy seems formidable.
Until recently, training providers—further education colleges and the independent training providers—often handled the paperwork for a small and medium-sized business in return for them providing the work-based training. But with the development of employer ownership, training providers are no longer encouraged to do this. Another solution lies in group training agencies. This model has been around for 40 years, primarily in the engineering industries, but it has now spread out on a more general basis as a model of industry provider/partnership. As Ofsted put it, they have,
“responded very effectively to the training demands of industry. Training companies”—
that is, independent training providers—
“that are members of GTA England generally provide high-quality training. Of the 23 GTAs that were inspected between January 2010 and April 2015, 21 (91%) have been judged good or outstanding for overall effectiveness. This compares with 79% of the 386 other independent learning providers inspected that were judged good or better over the same period”.
The amendment proposes that a specified public body—probably a local enterprise partnership, or its equivalent; but it could be a local authority or a further education college—should be tasked with the setting up of a GTA in their local area to build up the appropriate partnerships with industry, and especially to bring in the SMEs and their local partners. I note that in some cases where SMEs are part of supply chains, they are organised by the larger companies and may operate on quotas set by them for taking on apprentices, but in any locality, many small and medium-sized businesses could be good trainers. In Germany, on the whole, it is the smaller companies that are doing the training. They could be involved in apprenticeships, but many of them are not at present because they find the barriers to entering apprenticeship agreements too great. I beg to move.
Lord Young of Norwood Green
My Lords, I support the amendment. To pick up the last point made by the noble Baroness, Lady Sharp, about group training associations, I went round a number of them while I was a junior Minister. The Government ought to encourage them. The noble Baroness is right: although the bigger employers use their supply chains, the benefit of the group training associations is that they bring in a much wider group of small and medium-sized employers. I would welcome hearing what steps the Government are taking to encourage the development of more group training associations.
Baroness Neville-Rolfe
Small businesses are of course the cornerstone of our economy, and high-quality training opportunities such as apprenticeships can be key to supporting their growth and success. It is essential that the apprenticeship system works for those employers as well. The majority of existing apprenticeships are in fact with smaller businesses. Significant progress has been made in ensuring that apprenticeships are accessible to them.
Small businesses are directly involved in all phases of the process to develop apprenticeship standards. When new standards are submitted, evidence is required that small businesses have been involved and that they support the development of that standard. I know that from the work that I have done in the electronics sector. A variety of mechanisms is used to engage small business throughout that development—face-to-face consultation events for automotive standards and online consultation for electrotechnical standards. Small firms have been actively involved in the craft trailblazer. We engage with representative organisations that represent smaller businesses. We have even made a small travel fund available, which smaller employers can use to attend meetings to develop standards.
Most important of all, the apprenticeship grant for employers also provides employers with fewer than 50 employees with a £1,500 incentive payment for up to five new apprentices aged 16 to 24. This will continue to be available until 2015 at least.
There is also a wide range of apprenticeship training agencies—ATAs—and GTAs, as the noble Baroness, Lady Sharp, made clear. They employ apprentices and place them with host employers who may be unable to commit to employing an apprentice directly. For employers, this makes it easier to take on an apprentice. Good-quality ATAs will be able to continue to operate once the apprenticeship funding reforms have been introduced. The SFA also runs an apprenticeship helpline.
There are also lots of good examples, including case studies of apprentices and employers, on the SFA’s “Find an apprenticeship” website. I have various publications here which I am happy to share.
We believe that this is the right approach to SME support. We think it would be complex and confusing to require public sector organisations to duplicate the effort and provide additional resource to facilitate small businesses entering into apprenticeship agreements. We are putting small business at the heart of the way we are going forward. For the same reason, we are unconvinced of the merits of involving the Small Business Commissioner, whose main role is to address payment issues, particularly late payments, and to focus on that until we bring about a serious culture change. I hope noble Lords will have found my answer helpful and that the noble Baroness will feel able to withdraw her amendment.
Baroness Sharp of Guildford
I think there is a problem that is missed by the current arrangements; that is, within any locality there are quite often small and medium-sized businesses that are put off by the bureaucracy involved and do not get picked up by any of the current arrangements. Yes, there is masses of information and you have to be proactive in seeking it out. The amendment is very much a “may” amendment rather than a “must” amendment but in some rural areas and areas that fall between the core cities—in which the push is going forward because they are taking over skills—this is often not the case. I see it where I am, in Guildford, because we fall betwixt and between the Coast to Capital LEP and the Enterprise M3 LEP. However, many small and medium-sized businesses might well benefit if they were pushed a little bit in this direction. Neither the independent training providers nor the colleges are really being encouraged at the moment to pick up the tab of going to seek out people to provide apprenticeships for, in the switch to the employment ownership pilots. This is an area where a particular public body—local enterprise partnerships are an obvious example—could be useful in providing the initiative.
I will withdraw the amendment for the moment but we might return to this issue on Report because I am not really convinced that this is an appropriate answer.
“( ) In describing an apprenticeship that is a statutory apprenticeship scheme, P must also stipulate whether the apprenticeship is a higher level apprenticeship or not.”
Baroness Sharp of Guildford
We have already talked about the Ofsted report and the rather negative picture it paints of problems with the present level of apprenticeships, but one thing we have not talked about very much is the importance of trying to fill the skills gaps by the training of those at the higher levels.
The big skills gaps are particularly in engineering and construction and at technician level with STEM subjects. These gaps used to be filled by the concept of the HND, or the equivalent of the foundation degrees, but we have seen an enormous drop in the number of HNDs and foundation degrees being undertaken in the past few years. The number of young people going through to these higher-level apprenticeships—above level 3—is absolutely minute, yet it is vital that many more young people should progress through. Having done a satisfactory apprenticeship, perhaps coming in with their A-levels, they could go directly into a level 4 or level 5 apprenticeship; or those who have started by doing a level 2 apprenticeship, enjoyed it and gained a lot from it, could be given the opportunity to move up to level 4 or level 5, the degree-equivalent levels. We are extremely anxious that the vocational route should be seen as equivalent to the typical academic route. It is very important that it acquires this status. Only if we see a fairly substantial number of young people being able to move through the progression routes in apprenticeships to these higher-level apprenticeships will we see this.
The amendment, which calls for a report on the number of higher-level apprenticeships that shall be stipulated, requires us to concentrate on this issue. I beg to move.
Lord Young of Norwood Green
I support the noble Baroness’s amendment. She is right about the need to increase the number of higher-level apprenticeships. As I understand it, from a briefing I had from SEMTA, part of the problem is getting young people to see that this is not an either/or choice between a vocational and an academic route. People with the highest level of qualification feel that, if they are to progress to a degree, they have to go down the academic route. There are lots of opportunities for them to go down the higher-level apprenticeship route. The apprenticeships are there; we are not getting the take-up. This is another point on which to emphasise the importance of career guidance if we are to solve this problem.
The noble Baroness is right to draw attention to this part of the regulation. It is a useful and necessary emphasis. I referred earlier to the number of engineering and STEM apprenticeships that will be needed over the next five to 10 years. It is estimated to be 830,000. Not all of those will be higher level, but a significant number will.
Baroness Neville-Rolfe
My Lords, this amendment seeks to require that a person, when offering a statutory apprenticeship scheme, must stipulate whether it is a higher-level apprenticeship. This is already a non-statutory requirement for the “Find an apprenticeship” service and is covered through an apprenticeship agreement. The amendment would insert a new subsection into new Section A11 of the Apprenticeships, Skills, Children and Learning Act 2009 to provide that a person commits an offence if, in the course of business, they offer a course of training and describe it as an “apprenticeship”, unless the course or training is a “statutory apprenticeship”. I do not believe that that is the right thing to do.
Improving quality is central to our reforms, as we have agreed. Employers are developing new standards to ensure that apprenticeships meet the skills needs of their sectors, in exactly the areas that the noble Baroness, Lady Sharp, spoke about: engineering, STEM and construction. In STEM, for example, apprenticeships have increased by 42% between 2009-10 and 2013-14. The starts at age 19-plus are up 83%. This is a long-term change programme. We all know how long and difficult those are.
The published trailblazer quality statement sets out a range of measures to improve quality, including the requirement for all apprenticeships to demonstrate progression and to involve sustained and substantial training of at least 12 months. The Government are committed to the expansion of higher apprenticeships, with a fivefold increase in higher apprenticeships since 2009-10. To date, there are more than 50 higher apprenticeships available up to degree and master’s level in areas such as life sciences, law and accounting. We need to get the message out that there are these possibilities and that they can create just as good a career as going to university if someone has the appropriate bent for apprenticeships.
In the circumstances—it is getting late—I ask the noble Baroness to withdraw the amendment.
Baroness Sharp of Guildford
I thank the Minister for her reply. I think that we are very much in agreement here that this is an area where we wish to see expansion. I also agree that it is a slightly strange place in which we have managed to put this amendment. With that, I beg leave to withdraw the amendment.
Lord Stevenson of Balmacara
My Lords, we have heard a lot today about the new world of apprenticeships and the many good things that will happen as a result of this Bill, and, as I said at the beginning, we are not opposed to what is being proposed. There are questions about how it will happen—and we have talked a lot about that—but the key element that we have all agreed on is that these new statutory apprenticeships must be of high quality. However, the question is: who is going to police that and report on it, so that we maintain quality? Obviously, we are aware that the Skills Funding Agency will play a part, but it is not clear to me what its role is. I hope that, when the Minister responds, she can sketch out a little bit what the SFA’s role will be in this area.
We have also heard that trading standards bodies, probably in the form of the Trading Standards Institute, will have some part to play, and that is what this amendment seeks to probe a little bit further. As I understand it, trading standards bodies have accepted a responsibility in relation to universities, but it is important that we also get the issue right here. However, I gather that the TSI’s role there, which is exercised through the individual trading standards bodies at local authority level, is to check whether a particular organisation—mainly, one that exists in bricks and mortar close to the locality of the trading standards officers who are investigating the case—is a registered university in the sense that it has a royal charter and performs all the functions required under the Act. In other words, trading standards provides an institutional check; it is not a question of looking at the individual courses that any university might provide, and it is certainly not looking at the classroom accommodation or laboratories or—heaven forfend—the social facilities that every university must have these days. It provides a one-off, tick-box exercise: does this organisation or building fulfil the requirements of a statutory university?
As I understand it, the requirement on checking whether statutory apprenticeships are working well will be to look at the particular apprenticeship in terms of the training provided both on and off the job. That will involve looking at the individual companies and the colleges that the apprentices attend, so we have a rather different job here, and it is not at all clear to me why the TSI is the right body for this. That may be why the noble Lord, Lord Stoneham, and the noble Baroness, Lady Sharp, put down their amendment suggesting that a more appropriate body might be the enterprise partnership, which will at least have a knowledge of what is happening more generally in the area and will have a concern about the employers who are operating apprenticeships and what sort of services and provision they provide.
There are a lot of questions around this. I am not sure what role the TSI will have, but if it will have a role, can the Minister explain what exactly she has in mind here? Will this duty be placed on all the weights and measures operations in every local authority across the country or will it be taken up by the new Trading Standards Institute? If it is either the former or the latter, what funding will be provided? Will the funding be on a targeted basis, will it be a lump sum, or will it be for a certain number of posts? We need more detail here. We need to be quite clear that, if there is going to be just some sort of notional adjustment to the revenue support grant that goes to local authorities, it will certainly not trickle out in sufficiently large amounts to the actual trading standards officers who will again be expected to pick up an additional duty without the resourcing required for it.
There are a lot of questions there, but the point is made in both my amendment and that in the names of the noble Baroness, Lady Sharp, and the noble Lord, Lord Stoneham, that we need a bit more detail here. I beg to move.
The Deputy Chairman of Committees
I have to inform the Committee that if this amendment is agreed to, I cannot call Amendment 51A by reason of pre-emption.
Baroness Sharp of Guildford
My Lords, the noble Lord, Lord Stevenson, has already made the case for Amendment 51A. When I read this part of the Bill, I was jolted and thought, “Good heavens, why trading standards?”. In the briefing that it provided for us, the LGA was very unhappy about it being trading standards. It said:
“We are concerned about the proposal (clause 19 (7)) in the Bill to make local trading standards teams responsible for enforcing the protection of the term ‘apprenticeships’. The LGA has consistently highlighted the expanding number of statutory duties that trading standards teams are responsible for, at a time when budgets and staff in the service have reduced by an average of 40 per cent over the last four years. Government has recognised the issue and is currently undertaking a review of trading standards with a view to identifying key service priorities, yet in the past month alone it has introduced two new statutory duties for the service”.
It seems very odd for the Government to be introducing a statutory duty in an area where trading standards has no expertise whatever. Local enterprise partnerships have much more knowledge of what is going on with apprenticeships than trading standards. It is really rather absurd that we are looking to a body with no background or expertise in the area. We should be looking for a body that has some expertise and can do the job without too much difficulty.
It should be acknowledged that local enterprise partnerships are at the moment very sparingly funded; they do not have a vast amount of money at their disposal and, whether one likes it or not, this responsibility will require some resources, particularly if the body is required to make regular reports to the Secretary of State about what is going on. If we place that duty on local enterprise partnerships, we should know that they have sufficient resources to fulfil it.
Baroness Neville-Rolfe
My Lords, this is an important area; enforcement is always important. The amendments relate to the enforcement of the measure to protect the term “apprenticeship” from misuse. They would require local enterprise partnerships to fulfil that function rather than trading standards. Noble Lords will know the high opinion that I have of trading standards, and I am glad to be able to put it on the record again.
As the apprenticeship brand grows, so does the risk that the term “apprenticeship” could be misused to refer to lower-quality courses. Therefore, as the noble Lord, Lord Stevenson, explained, we intend to follow the precedent for enforcement that applies to unrecognised degrees, which is in the Education Reform Act 1998. Trading standards has a duty to enforce that legislation using its powers in the Consumer Rights Act 2015. That has ensured that UK-based operations with a physical presence are closed down, and there have been a number of prosecutions over the years. Since 2003, there have been successful enforcement cases against more than 18 offending bodies, with the closure of 10 and prosecution of a further three. In practice, although the duty extends to all trading standards teams, to answer the question asked, cases have tended to be concentrated in a couple of areas.
We are exploring whether it would be sensible to assign one trading standards team to act as the lead authority, with the ability to build the enforcement capability and expertise to deal with the challenge. This would be in line with the approach taken for other functions, such as the Illegal Money Lending Team, which is based in Birmingham City Council—another namecheck for that council—and tackles cases across England.
To respond to the noble Baroness, Lady Sharp, we judge that trading standards bodies would be more appropriate to enforce the measure than local enterprise partnerships because of trading standards’ specialist enforcement powers, history and experience. Trading standards will be there to carry out enforcement as a backstop, but with the SFA there—to respond to the question from the noble Lord, Lord Stevenson—to encourage compliance. As set out in the impact assessment, we anticipate that the number of prosecutions will be very few, because we know from experience of degrees that this can have a totemic effect. We are in active discussions with the Department for Communities and Local Government, the Local Government Association and the Better Regulation Development Office to ensure that the requirements of trading standards in this area are achievable, effective and proportionate. I hope with that explanation of how we plan to take these provisions forward, the noble Lord will feel able to withdraw his amendment.
Lord Stevenson of Balmacara
I thank the Minister for her very comprehensive response. Given that the Government are consulting and in discussions, would it be possible to get a bit more information before Report, and for the Minister to tell us wherever they have got to on that level? This is a recurring theme: one of the great advantages of starting a Bill in the Lords is that one gets to have first go at it but the bad news is that you do not get all the detail that would make our jobs much easier. With that slight aperçu, I would be grateful to have any more information.
Baroness Neville-Rolfe
The noble Lord summarises it very well. We will send an update ahead of Report. I think that noble Lords can see the general direction of travel, and it is fair to press us to try to make up our minds.
Lord Stevenson of Balmacara
After that gracious acceptance of my proposal, I beg leave to withdraw the amendment.
“Insolvency: pre-packs
Where a company enters pre-pack proceedings the following conditions must be met in order to protect the company’s creditors—(a) the owners of the company must approach the company’s investors for approval prior to entering any pre-pack proceedings;(b) any personnel advising on pre-pack proceedings shall not become the administrator in subsequent pre-pack sales;(c) any administrator undertaking a proposed pre-pack sale to connected parties must justify that the prospective sale price represents the best value for creditors; and(d) the administrator must make provision for at least three days’ notice to be given to creditors of the terms of any such proposed sale if there has been no open marketing of the assets.”
Lord Stevenson of Balmacara
We now leave apprenticeships for the time being and turn to a familiar topic from previous engagements with enterprise and related matters: the sad side of things when matters go wrong. I am afraid that the areas covered in this amendment are familiar territory for those who were on that journey, but I make no real apology for that, although I was hoping that my noble friend Lord Mendelsohn would be here to introduce the amendment and that I would not have to do it myself. However, I shall struggle on, and hope that I shall cover the ground, even if not as well as he does.
The first amendment is on pre-packs, which comes at a rather interesting point, because there is a press release dated today that sets out arrangements for how pre-packs will be looked at by the Government on a voluntary basis, following the review carried out by Teresa Graham in 2014. Why would we want to interfere with that? We are talking about a relatively small number; the figures that I saw in the press release suggested that about 20,000 businesses went through insolvency in a year, with less than 5% involved in pre-packs. Doing maths in my head, I think that is about 1,000 instances of pre-pack in a year, so it is not a lot.
The issue with pre-packs, which is worth repeating, is that uniquely in the British insolvency system—the British insolvency system is largely admired around the world, so we do not want to attack it in generality—is that creditors have a pretty bad deal. We have argued in Committee and on the Floor of the House that more protection should be given to creditors when a pre-pack is considered. The argument made by my noble friend Lord Mitchell last time was that you can have a situation whereby, on a Friday afternoon, a company known as Smith and Jones is operating, but by Monday morning it has become Jones and Smith, with the same people running it and many of the same directors and perhaps even the same bank. But the creditors—and probably one of those creditors will be HMRC, along with a few other people—have been dumped.
The argument in favour is that businesses that have a future will continue; the bad news is that those who are involved in supporting the previous business, which is going to disappear—particularly trade suppliers and others who might be on credit terms with Smith and Jones—will not be able to pursue Jones and Smith, because it is a different company. Does that matter? I think it probably does because the creditors will probably be small companies employing people. If they are suffering, the economy is suffering as well, so there is an issue there.
Lord Hodgson of Astley Abbotts
My Lords, I am very concerned about the pre-pack administration idea. I understand that it has a superficial appeal in terms of saving jobs but the reality is that jobs can also be lost among the creditors. The appearance is that jobs may have been saved but very often the creditors—the small businesses that are the suppliers of the company in pre-pack administration—can be out of work. They are below the water—the part of the iceberg that you do not see. The noble Lord said that creditors have a bad deal in a pre-pack. They do not have a bad deal; they have no deal at all. Not only do they have no deal at all but the pension obligations pass to the pension regulator, which in turn is passed on to other firms.
In my experience of pre-pack administration, the arrangements are, frankly, utterly superficial and exceptionally difficult to police in terms of whether or not a fair value is being achieved for the assets that are being sold. I am not clear yet that we have got to the bottom of what I call repetitive pre-packs, in that directors and managers who are not very good businessmen go through the pre-pack arrangements at reasonably frequent intervals. I hope that this is something that the Small Business Commissioner might be able to think about because I think he will have some role to play here and we did not pick up on this point when we were discussing that part of the Bill.
I have not seen the new proposals that have been produced today but I think that the issue that the noble Lord has raised in Amendment 52ZA is something that we need to consider very carefully. I have a couple of questions for him about his amendments. Amendment 52ZA(a) states that,
“the owners of the company must approach the company’s investors for approval prior to entering any pre-pack proceedings”.
What is the difference between an owner and an investor? The investors own the company. I am not quite clear what the distinction is. I may be missing the point about what the distinction is between those two categories in terms of what the noble Lord is seeking to achieve, but I understand the force of some of the other points he is making in Amendment 52ZA(b), (c) and (d), and I think they are of interest.
Under Amendment 52ZD, which concerns the “debtor in possession”, one issue is how the company continues to trade in the circumstances, because it has to take on new obligations. One of the things most feared by company directors, and quite rightly, is trading while insolvent. Therefore, will Amendment 52ZD give directors protection because as you approach the edge of the company’s solvency, your lawyers, advisers and accountants will say, “If you cannot prove that you had thought that you could make good and pay the creditors as they fall due, you are committing a criminal offence and the law takes a very serious view of that”? Perhaps the noble Lord could explain a bit more in a minute as to how that protection is going to be provided under Amendment 52ZD and, in particular, where the company is expected to continue, how security is going to be given to suppliers working for the company and providing further services or goods for which they may or may not get paid at some date in future.
However, there is a central point in Amendment 52ZA. Notwithstanding what may have been proposed today under the new regulations, we have been slightly seduced by the attraction of pre-packs. I think that the hidden damage that they do to a lot of suppliers and smaller companies is something that we have tended to overlook. The noble Lord made an interesting point in the amendment, but there are some issues to be clarified.
Lord Leigh of Hurley (Con)
I rise to talk about this clause, which comes at a strange place in the Bill. We did actually discuss much of this in the Small Business, Enterprise and Employment Bill, and I made the probably too political point then that we have not seen much of insolvencies recently, but that does not mean that we will not—we will, because the cycle will turn round and there will be more insolvencies. So now is a good time to think about how to avoid some of the mistakes that were made last time round.
I had not realised that this report had been published today. I think it might be the Teresa Graham report. Teresa Graham has come up with some extremely helpful ideas, which we discussed during the Small Business, Enterprise and Employment Bill. The best ideas included having a panel appointed to approve any pre-pack and that panel comprising people either of the R3 Group or the Turnaround Management Association or some such other organisation. I think there is a need for a panel. The other suggestion was that a review needs to be undertaken by an independent third party to assess the viability of any business going through a pre-pack.
I think there are not that many pre-packs in number, but they can be extremely helpful. I declare an interest as I am on the board of a retailer—not that my business has done this. For many retailers, they are particularly helpful because of the peculiar nature of UK property law, which is that people get stuck in these long-term contracts under different conditions and the only way they can get out of these contracts is to use a pre-pack. Therefore, they have a purpose and they have a role.
If I can help, because I shared the confusion of my noble friend Lord Hodgson, I think what is meant in Amendment 52ZA by “the owners” is the majority owners, the shareholders, who must approach the minority investors. In the absence of the noble Lord, Lord Mendelsohn—if I can read his mind—that clearly makes sense but, of course, it is going to be extremely difficult where public companies go through a pre-pack, which does happen, for them to contact all the investors. In paragraph (b), where it says,
“any personnel advising on pre-pack proceedings”,
I am not sure whether that is meant to include accountancy firms, and whether personnel means internal or external. I have argued for many years that there should be much greater investigation into the role of accountancy firms in insolvency situations. They are often called in by the banks to investigate a company, but they have an incentive for their report to recommend an insolvency procedure because they are immediately subsequently appointed as the administrator, receiver or liquidator. I can see the economic argument for and benefit of that, but I have also seen instances where, frankly, the accountancy firm concerned has just pushed a perfectly good company into administration and extracted millions of pounds of fees—I do not exaggerate—through that insolvency procedure.
These amendments are welcome to the extent that they raise these questions. There is a particular problem with the interaction between current insolvency legislation and the current employment legislation, which leads to the sort of situation discussed earlier. There needs to be a much more holistic approach to both employment and insolvency law because people in such circumstances are often under extreme pressure of all sorts. It is difficult for them to clarify their legal position at extreme speed. We must try to find a way to assist people.
I particularly welcome and am interested in Amendment 52ZD, which seems to have its roots in Chapter 11. That is a proposal that merits further discussion and reflection, perhaps on another Bill at another time, but it is good to see it raised in a Bill that has the title “Enterprise”.
Baroness Neville-Rolfe
My Lords, I welcome the spirit of these amendments, which intend to improve the functioning of insolvency. I am delighted to be able to confirm that today a number of industry reforms to pre-packs, recommended by Teresa Graham and her review, have been introduced. I am glad to hear support for those changes from my noble friend Lord Leigh of Hurley. Creditors will inevitably lose some money when a company fails, and this is unavoidable. However, in delivering these voluntary pre-pack reforms, creditor bodies and the insolvency industry have come together in a good way to support the reforms. I agree with my noble friend Lord Hodgson that creditors need confidence that the best deal is obtainable.
Another cause for celebration is that from today a further reform introduces new guidance on marketing to ensure that creditors can be confident that they are receiving the best price for the sale of the insolvent business, but these changes need to be given time to take effect before yet further changes are considered. The Government will undertake a review once these have bedded in.
On small businesses, the redundancy payments scheme provides valuable assistance to employees when their employer enters insolvency. All employees can access the scheme. There has recently been consultation on collective redundancies and the outcomes for employees in an insolvency. The findings will be published in due course.
The existing law on the priority of payments to creditors in an insolvency seeks to ensure that there is a fair distribution of a company’s assets. Any change to give preference to the types of small business set out in the amendment would, of course, have to be at the expense of other creditors. Giving priority to such creditors would have wider consequences, such as increasing the cost of suppliers from other creditors, or higher costs of borrowing for businesses in general. The Government do not consider that an evidence-based and sufficient case has been made for changing the long-established order of priority in that respect.
On Amendment 52ZD, it is obviously important that, if a viable company is unable to pay its debts, it is given an opportunity to continue as a going concern. That is why the insolvency regime already provides for a moratorium. It is important that any extension of the existing moratoria offers appropriate safeguards and protections to creditors. Otherwise, there is a risk that businesses will find financing more difficult.
I am so sorry that the noble Lord, Lord Mendelsohn, is not here, because he has made a valuable point with his work on “debtor in possession”, elaborated in a helpful note that he sent me over the summer. I agree that viable businesses should allow sufficient time to develop a rescue plan, and I am therefore very pleased to be able to say today that, while we cannot accept an amendment to this Bill, the Government are already reviewing this area and we will announce our proposals in due course.
I hope that the noble Lord has found my explanations reassuring in this area, and on that basis feels able not to press his amendment.
Lord Stevenson of Balmacara
I cannot really call these probing amendments, because they were not really probing anything—they were really there to stick pins into people to get them to take a bit more interest in this area. But I think that my pins can now be removed. As has been said, the amendments are of interest and, where appropriate, they can be looked at again. I am delighted, and I am sure that my noble friend Lord Mendelsohn will be particularly pleased, that the ideas behind the proposal of a business debtor in possession can be given a bit more thought—and they certainly need it, since they were not meant to be finished in any form.
I was slightly trembling when the noble Lord, Lord Hodgson, said that he had a few questions that he wanted me to answer, because I am not the sort of person who can answer them, but I was lucky to have friends in the Room and did not get too far behind.
I thank noble Lords for the debate, which was meant genuinely to add something in the medium term. With that, I beg leave to withdraw the amendment.
The Earl of Kinnoull
The Earl of Kinnoull (CB)
In moving the amendment, I shall speak also to Amendment 52C. I declare my interests as in the register. I am seeking to carve out business that is placed today in London’s international insurance and reinsurance markets from the insurance-related clauses of the Bill—Clauses 20 and 21. In tabling the amendments, I have had a lot of help from the Lloyd’s Market Association, or LMA, and the International Underwriting Association of London, or IUA, which are the two market associations representing all the insurers involved in those markets in London. We have the LMA’s CEO and his legal director here today, watching. I also very much appreciate the help that I have had from the noble Lord, Lord Flight, who has been full of enthusiasm and interesting points. Finally, I thank the Minister, who saw us all in her room, armed as she was with a formidable team, which included people from the Treasury and the Law Commission. It was a very helpful discussion on a tricky area, where the businesses involved mean the Government and the country well. We promised to supply the Minister with some further evidence, which has started to appear at the LMA, and we hope to communicate that evidence to the Minister later in the week.
Late payment of valid claims by participants in the insurance markets is something that the vast majority of those markets strongly dislike. It is very irritating as an insurer trying to do a good job to see someone doing a bad job and making a business out of not paying their valid claims on time. The ombudsman and regulators have done quite a good job here in reducing the size of the problem over the years, and have certainly helped a lot in making the annualised impact benefit be assessed at £1 million, as it was in the impact assessment for the Bill. I am sure that it would have been a lot bigger in older years.
The London market is peculiarly big. In November 2014, the Boston Consulting Group did an assessment of the market and thought that it had annualised gross written premiums of £60 billion; 48,000 people worked in it; and it represented 20% of the City’s GDP, about 8% of London’s GDP and approaching 2% of the UK’s GDP. I should say that of the £60 billion, about £8 billion is affected by the Bill.
International insurance is a highly competitive world. The London market is much the largest in the world, but we should be aware that other markets are constantly nipping at its heels. Business comes to London not just because of London’s 300-year record of paying claims on time and its infrastructure but because the capital is here. I want to concentrate on the reason that the capital is here. Most players active in the London market are active in at least one other market around the world, if not all of them. They can meet from time to time to decide where to deploy their capital. Obviously, they will try to deploy it in whichever market they think it will have the easiest ride and present them with the opportunity to make the best profits.
Insurance is just like any business, in that a percentage of claims give rise to disputes. Unamended, the Bill could, the LMA, the IUA and I feel, lead to an “unreasonable delay” cause of action being introduced as an extra part of many disputed claims, leading in turn to extra claims costs and a lot of aggravation for the insurers concerned—in other words, grit in the machinery. That would naturally be less attractive to capital. Many factors decide where you want to deploy your capital as an insurance group, but I put it to the Minister that one wants to try to ensure that we do not have grit in the London machine, because any redirection of capital elsewhere would be damaging to the London markets.
The amendments carve out two things. The first is reinsurance, where the only parties involved in the transactions are insurers. I very much hope that that is uncontroversial. The second thing is large risks. Large risks is a concept that we have tied to a European Union definition which is pretty well understood by the professional insurance market—certainly everyone in the London international markets would understand it. We thought that that was a reasonable starting point to discuss how to arrange a carve-out so that there was none of that grit in the London machinery.
The impact assessment for the unamended clause is for a gross benefit of £1 million per annum. In this intensely competitive international market, international insurers find that they are being consistently marked by brokers and other insurers, so someone who does not pay his valid claims on time is very unlikely to be shown a lot of business in future. It is self-policing. It is for that reason that I submit that, of the £1 million gross benefit, not much would come from the international insurance markets. One would have nearly the same gross benefit even with the carve-outs.
I end by saying that my career has been in risk. I look at the upside and downside of things, try to assess probabilities and act accordingly. The upside here of the unamended Bill is some portion of the £1 million per annum annual benefit—I have tried to say that it is a small portion. The downside is needless damage to a £60 billion market that is of great benefit to the United Kingdom.
Lord Flight (Con)
My Lords, I support the amendments of the noble Earl, Lord Kinnoull. I do not have any direct interest in Lloyd’s, but I endeavour to keep my eyes and ears open to things that come through Parliament which may be acutely damaging to our financial services industry and the City of London. As many noble Lords will know, I raised precisely the same point at Second Reading.
It is important also to note, as the noble Earl, Lord Kinnoull, pointed out, that the whole of the Lloyd’s industry is behind him on these points. The various trade bodies and organisational bodies, several of whom are here today, are as concerned as he and I—he more particularly—about the risks here. My understanding is that the Minister has taken on board pretty much the Lloyd’s reinsurance situation, which is covered by paragraph (b) of Amendment 52C, but certainly wants more evidence relating to Amendment 52C, which is the potential risk of damaging the large risks market. Amendment 52C spells out what the large risks market is and its definition under the 2009 EU directive.
Baroness Noakes (Con)
My Lords, I have not spoken before on this Bill and, indeed, I would not have spoken had I not seen the amendments tabled by the noble Earl, Lord Kinnoull. I was very happy to see Clause 20 in the Bill and I would not have spoken had it not been threatened in some way. I should explain that I was a member of the Special Public Bill Committee which considered the Insurance Bill which became the Insurance Act 2015. As noble Lords may be aware, that was a Law Commission Bill, which is handled under the special procedure in your Lordships’ House, which means that the Law Commission produces technical amendments to the law and they go through on the basis that they are uncontentious.
Clause 20 that we have before us appeared in the draft legislation which the Law Commission put forward, but when the Government tabled their Bill for consideration by the Special Public Bill Committee it did not include that clause. We examined that very carefully as part of the Insurance Bill Committee. I believe the Government deemed the clause was contentious because of lobbying by the Lloyd’s Market Association and the International Underwriting Association. At the final stage of the Special Public Bill Committee, I introduced an amendment in precisely the terms in Clause 20, which is not my cleverness in drafting but the drafting of the Law Commission in the original Bill. I should say that the Law Commission contacted me last week, and it remains of the view that this is an important change to the law which it fully stands behind.
Needless to say, in the Special Public Bill Committee—which is a version of Grand Committee, in effect—that was not pressed. I was then leaned on—noble Lords may be shocked at this—by the powers that be in my party organisation not to move the amendment again on Report. The Government then managed to schedule the business on a day when I was not able to be in the House, so that was an end to it, so the Insurance Bill went through without properly considering the issue. While the Lloyd’s Market Association and the IUA remain against the clause, others in the insurance industry are quite content for it to go through, and we were quite clear in the Special Public Bill Committee that the weight of opinion in the insurance industry, setting aside the two organisations that the noble Earl mentioned, was in favour of this amendment, even though the Association of British Insurers thought that there might be a possibility that it would lead to claims management company activity, which is one of the scourges of the financial services industry at the moment. While that might have an undesirable consequence, it was not a good reason not to legislate for something that was right.
I find it difficult to understand why there could be an objection to a clause which just states,
“the insurer must pay any sums due … within a reasonable time”,
with reasonable time being well defined to cover what one would think would be a reasonable prospect of excuse for non-payment and therefore not imposing any particular amendment. The noble Earl’s amendment seeks to knock out reinsurance contracts—I rather take the view that they are between consenting adults and need not form part of this—and large risks. Large risks might sound as if they are huge things that are of no concern to small companies, but they are well within the ambit of many medium-sized companies in this country. One piece of the evidence that the Mactavish Group produced in the context of the Special Public Bill Committee and for the Treasury when it was considering what to do with this showed that in the previous four years 40% businesses with a turnover of more than £50 million had suffered strategically significant losses, that 45% of their claims were disputed and that the average time for resolution was three years. If you are a medium-sized company with a strategically significant claim which is being held up and takes a long time, it could be the difference between survival and business failure. It seems only right and proper that we should have within insurance law, fully in line with the Law Commission’s recommendations, an implied term of reasonableness of payment. I hope very much that the Minister will resist these amendments.
Baroness Hayter of Kentish Town (Lab)
My Lords, like the noble Baroness, Lady Noakes, we were rather sorry to see these amendments tabled by the noble Earl, Lord Kinnoull, as we support Clauses 20 and 21, which help consumers and businesses facing delayed payment of insurance claims to get damages for resulting losses. We certainly do not want to see these provisions watered down. Indeed, as the noble Baroness, Lady Noakes, recalled, it was the Law Commission and the Scottish Law Commission which recommended that insurers should be under a legal obligation to pay valid claims within a reasonable time. I thought it was the Law Commission which drafted these clauses and I am delighted to be in the Room with the true author.
The Bill puts the current FOS practice, which is to award compensation for unfairly refusing or delaying insurance claims, on to a statutory footing. Importantly, it will provide small businesses with recourse to the courts to claim such damages. As we have heard, Amendments 52A and 52C would remove the insurance of large risks from the provisions of Clause 20. That would effectively exclude many SMEs and their risks from the very protections that the Government—in our view, quite rightly—are seeking to introduce.
As we have heard, it is not just the Opposition who resist these and indeed the later amendments, which bring insurance contracts into line with any other normal contract. Some 80% of those responding to the Law Commission’s consultation agreed that insurers should be under a legal obligation to pay valid claims within a reasonable time. Our understanding is that not a single member of the ABI was against the clause. Indeed, some were strongly supportive, pointing out that for their SME customers, a claim being paid in a few months can be the difference between survival and failure.
It is almost a legal fiction which means that the normal contract law—that is, if one party breaks a contract, the other can claim damages—does not apply to insurance law in England. It is time to change this. The Law Commission is clear that this is appropriate for the London market and it opposes the attempt in these amendments to exclude it. Any carve-out for “large risks”, as defined in Solvency II, would exclude many consumer and SME risks. I leave the Minister to take the Committee through the finer details of the Law Commission’s argument, should she feel it necessary. I would just add that, in regard to excluding some forms of large risk, the Law Commission found that stakeholders were keen to see a single regime for all non-consumer contracts and did not support defining somewhat arbitrary boundaries, which add to transaction costs.
Baroness Neville-Rolfe
My Lords, I thank the noble Earl, Lord Kinnoull, for his amendments and for taking the trouble to meet me and representatives from the London insurance market, and welcome my noble friend Lord Flight, who is an expert in this area. I am also very glad that my noble friend Lady Noakes is with us and thank her for her support for the late payment of insurance provisions; that nicely complements the discussions we have had on other days on late payment for small firms by big firms and retentions. The provisions are, as she says, intended to address a legal anomaly in the current law; that is, that insurers currently have no legal obligation to pay sums due within a reasonable time.
Where late payment does occur, however frequent or infrequent that may be in different parts of the market, it is appropriate that the policyholder should be able to recover any losses suffered as a result. That is why the Bill builds into every contract of insurance an obligation on insurers to pay sums due within a reasonable time. Breach of that obligation may give rise to damages for breach of contract on normal contractual principles.
With his Amendments 52A and 52C, the noble Earl seeks to restrict the types of contracts to which this obligation would apply, excluding reinsurance and certain “large risks”. The clauses in the Bill are the product of a long Law Commission project involving years of engagement with the insurance industry. Stakeholders argued strongly in favour of a single regime for all non-consumer insurance contracts, avoiding boundaries which, by their nature, are complex and arbitrary, and add to legal expense. If different rules applied to different types or sizes of business, insurers would have to identify which side of the boundary each prospective policyholder fell before entering into the policy. This would severely slow down and add expense to the placement process.
The Earl of Kinnoull
I thank all noble Lords who have taken part in the debate and I thank the Minister in particular. As ever, she has put forward very beguiling logic. With her notable business career she must understand that industry associations with the reputation of those at the centre of the London insurance markets do not lightly make suggestions like this.
There was no intention in anything that we did to get at the basis of the Bill, which is to ensure that SMEs and consumers in Britain get a fair deal from valid insurers. We genuinely have a concern. I put to the Minister that the trouble with logic in a business context is that sometimes beguiling logic does not quite fit in the business world. I know that she will have many examples of that. We will put further proposals to her on the basis of the reinsurance carve-out, but we will need to regroup. I hope that she will read that and consider it again. On that basis, I am happy to withdraw the amendment.
“(1) An officer of the Valuation Office of Her Majesty’s Revenue and Customs may disclose Revenue and Customs information to—
(a) a qualifying person for a qualifying purpose;(b) a ratepayer for a hereditament.(1A) Information disclosed under subsection (1)(b) may—
(a) be disclosed for the purpose of providing the ratepayer with all information used to assist determination of the valuation of any hereditament for which the ratepayer is responsible for the non-domestic rating liability, and may be retained and used for that purpose, and(b) include information relating to hereditaments not owned by that ratepayer.”
Lord Stevenson of Balmacara
My Lords, I have been beguiling the Committee with the fact that I have had to act for several other proposers of amendments because sicknesses have left us a bit bereft. On this occasion, I can switch track slightly because here we are doing a decent thing in allowing some amendments on valuation to be debated on behalf of someone who cannot be present which I think he would certainly have tabled if he were here. We agree with them, so we have tabled them in our own right.
The noble Earl, Lord Lytton, has provided us with a brief which I will be drawing heavily on. However, as with the other amendments, I do not have the expertise to do justice to some of their individual elements. I suggest to the Committee that we take all the amendments that relate to valuation and the Valuation Office Agency together, which, if we do it cleverly and efficiently, will take us neatly to the witching hour of 7.30 pm, when we will be able to feel that we have done a good job. I will be imposing heavily on the good will of the civil servants briefing the Minister, but I hope that that will be sufficient. I am joined by the noble Lord, Lord Stoneham, who has put his name to one of the amendments.
The issue that unites all the amendments is that everybody involved in valuation agrees that the current arrangements for the business rates system, particularly the appeal system, are simply unsustainable. What is missing from the Bill is a balance between the need to remove ill-founded and speculative appeals with the need to preserve fair access to justice for those who feel that they have a case to argue.
At the heart of this, unifying all the amendments, is information, although I will speak specifically to the question of festivals, which arises in Amendment 52R. Therefore, most of my remarks will be about the generality of the VOA and how we may deal with it in future, but I will spend a few minutes on festivals.
We have drawn on work done by the Federation of Small Businesses, which also feels strongly about this. I think there is an alliance out there on this issue, and I look forward to hearing the Minister’s response.
Amendment 52F and those which are grouped with it, Amendments 52H to 52K and 52N, relate to whether information currently withheld by the VOA should be made available to those who have a genuine interest. I will not say much more than that, because that seems to be a point of fairness rather than a point of law: those who are being rated and having rates applied to them should be able to know the basis of that and to make judgments with their professional advisers fully informed.
Amendment 52G moves us to the billing authority and makes provision for disclosure of information about issues relating to a business improvement district scheme, which is a slightly different point but involves the same issue, which is that there is unlikely to be any way to judge what the non-domestic rates yield would be in a BID if you do not have access to that information. Again, limited disclosure would be in the best interests of all concerned.
There is no provision for an ADR ombudsman or other suitable arrangement in the VOA system, and Amendments 52L and 52P suggest that that gap needs to be filled. We would be grateful if the Minister would take that into account. Because of the way in which the UK has implemented the ADR legislation, a range of options is open, and we are not producing one solution against another, but it is fairly clear that there should be an outlet to an external agency such as an ombudsman.
The question of appeals more generally is raised in Amendment 52Q, in which we are also joined by the noble Lord, Lord Stoneham. The proposal in the Bill is that there should be an upfront fee for any appeal. That seems an odd thing to require. The people who will likely be most affected are small businesses, particularly those who are struggling to get started. It does not seem in the best interests of enterprise to require fees to be paid upfront which will not necessarily be returned if an obvious injustice is being done and redress for justice denied is not being provided.
On the question of festivals, we have become aware of the fact that the VOA has begun to raise invoices and seek money from people who have used agricultural land and buildings for cultural events and festivals. One can understand that, when previously rarely used assets are being used for a different purpose, there is obviously a question of whether fair taxation is being applied. It would be hard to argue that using land that was not being used for anything else for a business activity would raise a rateable question.
I hope that the amendment will set off in the Minister’s mind the suggestion that there is something a bit bizarre about constantly asking farmers and others to develop new ways of raising income and then, when they find one in the readymade form of a festival ready to come in on the site, not only to require them to pay rates for it but also to have a retrospective element. That seems rather unfair. I hope that, if only on the question of equity, the Minister might consider favourably the suggestion made by the festivals group that there should be no backdating. The situation may have changed, but that does not necessarily mean that those one-off festivals that have happened should suddenly be faced with very substantial Bills—we are talking about £50,000 or £60,000—when people have budgeted on the basis that there would be no such cost. In future, consideration should be given to some form of derogation for short-lived festivals of this type, when clearly there are economic benefits to the whole of the country and to the locality, and a good cultural effect that would be completely lost if the cost exceeded the income. We might be cutting off our noses to spite our faces. I would be grateful if the Minister could consider the amendment. I beg to move.
Lord Stoneham of Droxford (LD)
The noble Lord, Lord Stevenson, has masterfully summarised the amendments. I put my name to Amendments 52F and 52P in the interests of trying to improve the processes. In the interest of brevity and trying to improve the timescale, I am happy to give my support formally.
Baroness Neville-Rolfe
I thank my noble friends for proposing these amendments with such swiftness and efficiency, and I shall try to do them justice. The noble Lord, Lord Stevenson, has done fantastic work today in covering so many areas that are usually addressed by others on the Front Bench. As always, I thank the noble Lord, Lord Stoneham, for his involvement.
I appreciate that there are concerns, which I share, that an effective business rates system should be based on businesses having a good understanding of their tax bill, underpinned by shared and transparent information. The amendments are about sharing information with the payer. Business rates are determined by taking account of a comparison with other properties. However, it follows from this that the Valuation Office Agency collects and holds commercially sensitive data. For example, it may hold information on the precise terms of rental agreements reached for a group of properties. The VOA has a legitimate duty to protect that information and the interests of the ratepayers who have provided it. That is in everybody’s interests, so we make no apology for having a rigorous system for handling and protecting sensitive information, an important general principle in life.
Lord Stevenson of Balmacara
I am very grateful to the Minister who I think sent a message of cheer to the association that looks after festivals. I am sure that it is delighted. Landowners, some of whom may be present, may also be very pleased at the result. That is a very good response to that issue. I am sure that there are other things touched on in the Minister’s response that we will want to look at but, again, that is a measure of progress and I am sure we can make a way forward on that. I beg leave to withdraw the amendment.
Lord Hunt of Wirral (Con)
My Lords, in declaring my interests as set out in the register, I welcome the opportunity to discuss the circumstances in which HMRC may disclose information. Although Clause 22 is drafted specifically to deal with the disclosure of information in connection with non-domestic rating, there are other circumstances in which disclosure by HMRC to certain other bodies is not only necessary but desirable.
The Employers’ Liability Tracing Office is one such example. ELTO was established in 2010 to assist injured people in finding the employers’ liability insurer which covered their employer at the relevant time. Since April 2011, it has been a regulatory requirement for EL insurers to provide details of all EL policies issued, as well as some historic data. ELTO’s aim is to create a comprehensive database of insured employers and the compulsory cover provided to them. The drive behind the creation of ELTO was to build a historic record of past insurance, particularly for victims of diseases with a long latency period, such as those caused by asbestos exposure.
However, the main long-term purpose of ELTO is to create a comprehensive and easily searchable database of current policies, which can avoid problems many years into the future. In order to make the database accurate, so that in 30 years’ time a person injured by past exposure to substances at the hands of their employer can trace the right insurance cover which should meet that claim, the database needs to find what IT people know as the “unique identifier”, which confirms beyond doubt that the right company has been identified.
In the case of employers, that unique piece of information is provided by the employer registration number used by HMRC. The ERN is the number now used in the Pay As You Earn system to identify individual employers. Armed with the ERNs, the database would become truly fit for purpose. ELTO has been pressing HMRC for disclosure of ERN data, but HMRC claims that the law prevents it doing so. Assuming for the moment that HMRC may be right—it rarely pays to argue with the taxman—there is a simple solution, and Clause 22 shows us the way. Where the law is an obstacle to better working, it can be amended. That is, after all, the main purpose of this Bill.
I am therefore considering whether a short amendment to the Bill could resolve this problem. I would welcome a further discussion if the Minister and her hard-working team ever have time to do so to see how best we could proceed. The ELTO database has been introduced precisely because people suffering genuine injury in the future as a result of their employer’s negligence will need easy access to details of the insurance policy that will meet that claim.
Finally, speaking as president of the All-Party Parliamentary Group on Occupational Safety and Health, I would like noble Lords to know that the all-party group is very supportive of the need to make the database accessible, accurate and searchable.
Baroness Neville-Rolfe
My Lords, I am grateful to my noble friend for raising the issue of data sharing between HMRC and the Employers’ Liability Tracing Office. HMRC has already specifically amended its processes to provide employer reference numbers and employment histories when requested by individual applicants. Further, I believe any amendment to allow data sharing between HMRC and the Employers’ Liability Tracing Office would be outside the scope of this Bill.
I understand that, as well as the normal concerns about taxpayers’ confidentiality, HMRC is concerned that disclosing all employer reference numbers would raise issues regarding proportionality and, of course, in today’s circumstances, the potential for fraud. Therefore, I do not think the Bill is the best place to bring forward such a widespread change, but I would be happy to meet my noble friend to understand more about the issue. However, I believe that Clause 22 should stand part of the Bill.
House of Lords
Royal Gallery: Daniel Maclise Paintings
Lord Trefgarne
To ask the Chairman of Committees what progress has been made on the restoration of the Daniel Maclise paintings in the Royal Gallery.
The Chairman of Committees (Lord Laming)
My Lords, I congratulate the noble Lord on his timing, because I am pleased to tell the House that the Works of Art Committee has agreed to a conservation programme to clean, conserve and improve the presentation of the two Maclise paintings. The work will be carried out over a four-year period and will start in the summer of 2016.
Lord Trefgarne (Con)
My Lords, I am most grateful for that excellent Answer from the noble Lord. After the pictures have been restored, will they be protected for future generations?
The Chairman of Committees
Yes, my Lords. We are very grateful for the research project that was undertaken by the students of the Cologne University of Applied Sciences and by the Curator’s Office here. A great deal more has to be done to find out exactly what damage has been done to the paintings from environmental factors, such as coal and the like, and from work that has been done since on varnishing the paintings. Once that has been done—we believe that a great deal of the original paint is intact—we will make sure that we preserve the paintings for future generations.
Lord Berkeley of Knighton (CB)
My Lords, there is a very powerful artistic reason for undertaking this conservation. These pictures are not simply triumphalism; they have a kind of visionary humanitarian quality to them because they depict the suffering, and what Wilfred Owen called the pity, of war. However, because the colours have faded so much, that precise aspect is very downgraded, so this is very welcome news.
The Chairman of Committees
My Lords, that is so. Not long after the paintings were completed, there were complaints about the degree of dirt, which affected the quality of the paint. We will be carrying out pilot studies with a view not only to doing as much as we possibly can to preserve the original paintings but to making sure that they are as good as they possibly can be, given their age.
Baroness Maddock (LD)
My Lords, does the Chairman of Committees agree that it is because we have this unique works of art collection that reflects our heritage that so many people want to come and visit the Houses of Parliament? Does he also agree that over the years it has been the hard work of many Members of this House in raising, and indeed donating, money that has enabled us to carry out conservation work without drawing considerably on the public purse?
The Chairman of Committees
The noble Baroness knows a great deal more about this than I do, but she is of course entirely right. As a House, we are very dependent on fundraising for this work. In recent times, it has not been possible to provide money from the Budget for it, so we are very dependent on fundraising to carry on the excellent work that this House does, not only on these Maclise paintings but on some of the frescos that are very much in need of preservation.
Lord Foulkes of Cumnock (Lab)
My Lords, can the Chairman of Committees tell us whether we will still be here when this work is completed, or is this building continuing to fall down around us—as I found this morning when I could not get in at the normal entrance? One of our colleagues pointed out to me that Red Benches states that work is being done on re-cant accommodation for the House of Lords? Will the Chairman of Committees give us a brief update on how things are going in respect of re-canting us somewhere else?
The Chairman of Committees
My Lords, it is true that there is a major programme of work across the whole estate and that there will have to be decanting from building to building, but this is being handled with the Chief Whips of the political parties and the Convenor. We are handling it as carefully as possible. I hope I will be here when the work is finished. Whether I shall be in this position I know not.
Lord Howell of Guildford (Con)
My Lords, I do not think that we need worry about the triumphalism. President Valéry Giscard D’Estaing once told me that, at school, he was taught as a little boy that the Battle of Trafalgar was a minor naval engagement in which the British were stupid enough to lose their admiral.
The Chairman of Committees
Well, we all have different perspectives on these matters.
Lord Dobbs (Con)
Does the noble Lord agree that those frescos are a true inspiration—one of the greatest inspirations in this Palace? Can Maclise’s story act as inspiration for the current House of Lords? After all, he was treated appallingly by the Government of the day. He suffered disgraceful financial meanness on the part of that Government. His instructions were ill prepared and badly handled. He was taken for granted, and when he protested, they responded simply with abuse and outright threats. And yet, his work proved to be of immense service to the nation. Does the noble Lord think that we, the current House of Lords, can draw inspiration from that prominent example?
The Chairman of Committees
Well, this is a new experience for me. It is true that many artists are not valued until they are long dead. Maclise deserves great credit because he had to research the water-glass method that had been developed in Germany but had never been used here. He wanted to make sure that it was possible to convey not just the drama of war but the complexity and the tensions. To do that, he had to paint bit by bit. That was where the water glass came in, because it was able to preserve the paintings. On the rest of the noble Lord’s question, I hope he will excuse me if I pass.
Lord Bilimoria (CB)
My Lords, is the Chairman of Committees aware that I hosted a dinner in the Peers’ Dining Room for Sidney Sussex College, Cambridge—my college—which was founded in 1596, and that the oldest painting in Parliament is the one of Queen Elizabeth which is located in that Room and was painted in 1596? Is that painting being preserved well enough?
The Chairman of Committees
Oh, my goodness me. I think that I will do some homework—I hope the noble Lord will allow me a little time to do that. I will then write to him, and I will put a copy of the letter in the Library.
Baroness Trumpington (Con)
I wonder whether I might trespass on the Chairman’s knowledge a little further and ask him whether he knows what has happened to Lord Carrington, who was hanging quite happily outside the Bishops’ Bar but has now disappeared. Can the noble Lord tell me where he has gone?
The Chairman of Committees
My goodness, I can see that my weekends will have to be devoted to these paintings. I am afraid that I am not well placed to respond, but I will make sure that the noble Baroness gets a reply.
Hinkley Point: Chinese Investment
(9 years ago)
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Baroness Jones of Moulsecoomb
To ask Her Majesty’s Government what assessment they have made of the employment and environmental records of the Chinese companies involved in developing Hinkley Point, and whether either company has been involved in developing nuclear weapons.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, all companies operating in the United Kingdom nuclear industry do so in accordance with the stringent requirements of the United Kingdom’s independent nuclear regulators. These include environmental protections. Likewise, all companies are required to conform to United Kingdom employment law. China is a nuclear weapons state under the Treaty on the Non-proliferation of Nuclear Weapons. China General Nuclear, which will hold a minority stake in Hinkley Point C, is not involved in the development of nuclear weapons.
Baroness Jones of Moulsecoomb (GP)
I thank the Minister for his Answer to my Question. I am sure he is aware that there is a lot of concern outside this place about inviting China to be such a large partner in such a complex deal. If we take into account the fact that the Chinese imprisoned 300 human rights lawyers and activists just between July and September this year, we start to see the size of the problems. In addition, Members of Parliament have only another week to voice their concerns about the Bill. I feel that the whole thing is being rushed through.
Lord Bourne of Aberystwyth
My Lords, the noble Baroness is right to say that concern has been expressed about China’s involvement. As I have said, the Office for Nuclear Regulation regulates the security of civil nuclear programmes, including companies from overseas, and the security services will also be involved. As she will understand, there has been a long-standing convention under successive Governments not to comment in any detail on that surveillance.
Lord West of Spithead (Lab)
My Lords, I am delighted that we are now moving forward and doing something in civil nuclear power generation. It is super that the Chinese are risking their money on this EPR reactor. Both of the types for Hinkley Point are being built in Finland and France, and the costs for both are twice what they were; they are taking twice as long and are still not finished. However, the Minister will be aware of my security concerns. Historically, 70% of the supply chain for nuclear work has come from United Kingdom firms, but there is evidence to suggest that when the Chinese start building the third of the reactors—the Bradwell reactor—they plan to provide all the supply chain material, at a cost to UK manufacturers. Will the Minister ensure that we get that sort of percentage to our UK firms rather than letting the Chinese monopolise it?
Lord Bourne of Aberystwyth
My Lords, I thank the noble Lord for his welcome of the project. It is true that 60% minimum is guaranteed on the supply chain in relation to Hinkley Point C, as I am sure he will be aware. It is very early stages for Bradwell yet; it has not really been discussed. I am sure that the aim will be to get at least that, but as yet pen has not been put to paper at all.
Lord Wigley (PC)
My Lords, as only four EPR reactors are currently being built—one in Finland, one in France and two in China—and none have shown that they work safely or efficiently, why was that technology chosen for Hinkley, ahead of the proven advanced boiling water reactor developed by Hitachi, which is currently being used successfully at three different locations?
Lord Bourne of Aberystwyth
My Lords, the noble Lord is right that the projects in France at Flamanville and in Finland to which he referred, and indeed in China—although the model is slightly different there—are ahead of what is happening at Hinkley Point C. This has been subject to detailed scrutiny, and we are satisfied that it is the best way forward. These are the first nuclear reactors that will have been built in this country for 25 years, and we are satisfied that this is the best way forward.
Lord Teverson (LD)
My Lords, given that Hinkley will almost certainly be followed by Bradwell in Essex in due course, what conversations have we had with the Chinese Government about the safe disposal of nuclear waste on nuclear sites? This is clearly important not just for world security but for our own security.
Lord Bourne of Aberystwyth
My Lords, the noble Lord is right about the disposal of nuclear waste. It is an issue that we have to address. We have much nuclear power at the moment and it is being addressed. It is an integral part of the discussions with the Chinese and EDF. It has to be remembered that the project at Hinkley Point C is not a China lead: one-third of the project is Chinese and two-thirds is EDF. However, it is central to the project.
Lord Stoddart of Swindon (Ind Lab)
My Lords, is the noble Lord aware that when I worked for the Central Electricity Generating Board, a nationalised industry, we built our own nuclear reactors and the CEGB was a leader in the provision of advanced gas-cooled reactors, which are still working. Why on earth is it necessary for this rich country to employ French and Chinese nationalised industries to build our nuclear power stations?
Lord Bourne of Aberystwyth
My Lords, I was not aware of the noble Lord’s background in this field but I readily acknowledge it. It is true that in the past this has been the case. Sadly, over a period of time under successive Governments, the research and development in this area was run down. We are now making agreements which are subject to stringent security and safety precautions to ensure that we move forward with what most noble Lords will acknowledge is an important part of the energy mix—namely, nuclear. We already take 20% of our energy needs from nuclear. That will continue. We are satisfied, with the conditions that we have in place, that this is the best way forward for the country.
Lord Hunt of Kings Heath (Lab)
My Lords, surely the point raised by the noble Lord is exactly why the integrity of the future UK supply chain is so important. My noble friend Lord West raised the issue of Bradwell and future developments. Can the Minister assure me that the UK Government will have enough leverage to ensure that, in relation to Bradwell, the size of the UK supply chain contribution can be protected and enhanced? That is a security question as much as it is a question about the industry and jobs.
Lord Bourne of Aberystwyth
My Lords, I readily acknowledge and accept that it is important on both bases. In answering the question I sought to say that we have not yet begun any detailed negotiations on Bradwell. However, new procurement rules are in place which help us in Europe and with the supply chain. We have got a good deal in relation to Hinkley Point C. I have indicated that I hope that that will be a template for what we do in Bradwell. However, it is very early days and I do not want to mislead people into thinking that we are already in that degree of discussion—we are not.
Copyright Hub
Lord Clement-Jones
To ask Her Majesty’s Government what future financial support they intend to provide to the Copyright Hub.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills and Department for Culture, Media and Sport (Baroness Neville-Rolfe) (Con)
Since 2012, the Government have provided £1.3 million to the Copyright Hub in start-up funding and through the Digital Catapult which is developing the underlying technology of the Hub. We are currently assessing the hub’s need for ongoing funding and will be considering various options for the future.
Lord Clement-Jones (LD)
My Lords, I thank the Minister for that reply. Of course, most of that has been in kind from the catapult. The Minister is well known for her enthusiasm for the Copyright Hub but when is she going to turn that into real hard financial support? This could be a fantastic resource of huge benefit to our creative industries. It is a licensing infrastructure that could be international. Would it not be extraordinary if Singapore, the US and Australia gave more support than the UK Government?
Baroness Neville-Rolfe
My Lords, as we have said from day one, the Copyright Hub needs to stand on its own feet in the longer term. It is linked to the wonderful creative industries worth £77 billion. However, we want the Copyright Hub to succeed, as the noble Lord knows, and that is why we recently agreed to provide an extra £100,000 to cover the core costs for the next four months. We are also financing an independent assessment to examine options for the long-term sustainability of the hub and its development.
Lord Howarth of Newport (Lab)
My Lords, does the Minister recognise that copyright is a form of monopoly and that, while it is desirable that innovation should be recognised and rewarded, it should always be the object of policy to keep the period of monopoly as short as is reasonably possible so that new ideas can circulate freely and rapidly? Does she also recognise that in the digital era such monopolies are increasingly impossible to enforce?
Baroness Neville-Rolfe
My Lords, the regime that we have introduced for copyright reflects a far-sighted report by Mr Hargreaves, many of whose provisions we have implemented. He was very aware of the balance between creators, rights holders and the consumer. The Copyright Hub is great, because it removes one of the excuses for piracy by making it easy and relatively cheap for potential users to seek and obtain permission to use works that are subject to copyright.
Lord Razzall (LD)
Is the Minister prepared to give a categorical answer to the question from my noble friend Lord Clement-Jones? Is she genuinely enthusiastic about supporting the Copyright Hub, or are her hands tied by the Treasury?
Baroness Neville-Rolfe
My Lords, I am genuinely enthusiastic about this, because it is like a switchboard for rights. It has huge potential. However, all government projects must provide value for money, and that is why we are looking at the work done so far. We have a prototype—I actually opened it—but we need to make sure that the flight path for the project is good. I agree with the point that this could be extremely positive internationally. We have spent a lot of time with the US and Australia, which are interested in this project going forward.
Lord Bilimoria (CB)
The Minister mentioned £100,000 of support. I declare my interest as an ambassador for the British Library. Is she aware of the work that the British Library’s Business and IP Centre carries out? Are the Government providing enough support for initiatives like that, which encourage entrepreneurs, creativity and innovation?
Baroness Neville-Rolfe
My Lords, I am well aware of the great work that the British Library does on this. When I visited, I was delighted to discover that more than 50% of the entrepreneurs using it were female. We certainly support having a network across the country for IP for small entrepreneurs, who can look at, buy and register IP around the country.
Lord Stevenson of Balmacara (Lab)
My Lords, the Minister has several times expressed the very welcome view that she is on the front foot, leading IP debates and policy in Europe. Does that mean that we can hope to see a British-based EU copyright hub in the very near future?
Baroness Neville-Rolfe
My Lords, we are talking to the EU, but at the moment the EU is interested in how we are leading the way on the Copyright Hub. However, where the noble Lord, who knows so much about intellectual property, is right as usual, is that digital knows no boundaries and therefore having hub arrangements across the EU is an idea whose time will come.
Lord Clement-Jones (LD)
My Lords, if I may interject again, the Minister mentioned £100,000 for ongoing support for the next few months, plus £100,000 for a study of financial viability. Is this not analysis paralysis? Is it not time we just got with the job and the Government put their money where their mouth is?
Baroness Neville-Rolfe
It is not analysis paralysis at all. Without the catapult and the money the Government have put in, the Hub could not have been launched, despite the great work done by the creative industries. There have been teething problems—for example, in recruiting the right staff and in ensuring that picture agencies and others are equipped and linked to the Hub. We need a proper project study and that is what we are financing. I talked to Richard Hooper about it and he is supportive.
President Sisi: Visit
Baroness Kennedy of The Shaws
To ask Her Majesty’s Government what assessment they have made of whether it is appropriate for the President of Egypt, General Sisi, to visit the United Kingdom, in the light of the state of the rule of law and human rights in that country.
The Earl of Courtown (Con)
My Lords, Egypt is key to our national interests. We must work together on the immediate issues facing us, such as bringing stability to Libya, combating ISIL and countering extremism. The United Kingdom is also committed to supporting political progress and economic development in Egypt, which will be the foundations of its future stability. President al-Sisi’s visit to the United Kingdom will be an opportunity to hold an open and frank dialogue on all these issues and to develop a programme of practical co-operation.
Baroness Kennedy of The Shaws (Lab)
Is the Minister aware that al-Sisi has been responsible for the murder of at least 1,000 unarmed protestors; used torture and rape on dissidents; imprisoned tens of thousands of political opponents, including elected MPs; denied medical aid to people in prison; and been responsible for a large number of disappearances? Egypt is becoming an incubator for ISIL because of his tyranny. He has also employed extrajudicial killing, corrupted the judiciary and held very swift trials, after which—and on very little that could be called evidence—the death penalty has been passed, including on a young woman studying for a master’s degree at Oxford, who was tried in absentia and has now been forced into exile. Is this a man who should be invited to Downing Street? Are we going to confront him with his tyranny?
The Earl of Courtown
My Lords, the noble Baroness has mentioned a number of different issues, all of which are serious. It is in Britain’s interests to work with President al-Sisi. Together, we need to combat terrorism and counter extremism, and thus help bring stability to Libya. We also need to talk candidly about Egypt’s long-term future. Reforms that revitalise the economy and political progress are the foundation for long-term stability.
Lord Singh of Wimbledon (CB)
My Lords, we have recently lavished hospitality on the President of China, where, as we heard in the answers to an earlier Question, there are gross abuses of human rights and the ruling clique presumes to tell people how many children they can have. We will shortly be lavishing similar hospitality on Narendra Modi, who until recently was excluded from this country and the United States for possible genocide against the Muslim community in India. We are rushing around trying to sell arms to Saudi Arabia, which is one of the most barbarous regimes in the Middle East. Would it not be discriminatory even to think of excluding President al-Sisi from these human rights abusers?
The Earl of Courtown
My Lords, the noble Lord has mentioned a number of different areas which are a little wide of the subject of this Question. We want to see more progress in Egypt, including better protection of Egyptians’ constitutional rights and freedom of expression, along with more space for NGOs and civil society, all of which are key to long-term stability. Our relationship with Egypt lets us raise these issues, and Ministers and officials regularly do so. The President’s forthcoming visit is a further opportunity to raise issues of concern.
Lord Wallace of Saltaire (LD)
My Lords, the Minister has said twice that we are going to discuss political progress with President al-Sisi, and I think many of us would agree that Egypt will be stable only if it allows political progress to be made. Can he tell us what sort of political progress for Egypt we have in mind?
The Earl of Courtown
A number of issues have been raised by Peers around the House and we want to see progress on all of them.
Baroness Kinnock of Holyhead (Lab)
My Lords, can the Minister confirm that the UK will unequivocally raise concerns about the flagrant and wide-ranging abuses of human rights presided over by President al-Sisi? Can he also confirm that there will be absolutely no negotiation or agreement on the transfer of any arms or equipment that could be used for internal repression?
The Earl of Courtown
My Lords, as I said before, we will raise these issues with President al-Sisi and his Ministers. On the arms situation, as the noble Baroness will be aware, this is a highly regulated regime and we try to ensure that Egypt remains subject to the EU Foreign Affairs Council-agreed suspension on arms exports. The suspension means that licences are suspended if we judge that they might be used in internal repression. We assess all applications from Egypt against the EUFAC suspension threshold and the consolidated criteria.
Lord Cormack (Con)
My Lords, is it not always the prime duty of the British Government, of whatever party, to protect the interests of the United Kingdom? That often means talking to and welcoming people of whose internal policies we may not wholly approve. The noble Lord, Lord Singh, has just mentioned one or two. This visit should go ahead and the President should be made welcome, but he should also be in no doubt that there are concerns in this country about certain internal aspects of his policies.
The Earl of Courtown
My noble friend is quite right. Egypt is on the front line in the war against ISIL and other forms of extremism. It is the biggest country in the Arab world and the biggest destination there for British tourists, with almost 1 million visitors per year. It is also hosting people who have been displaced by crises in neighbouring countries.
Baroness Afshar (CB)
My Lords, are the Government aware that in the name of Islam the Government of Egypt are abusing the rights of women, hence the attraction of other resisting groups who are promising to respect Islam, although we do not know that they will do it? What the Government of Egypt are doing is unIslamic. They are not granting women their rights. What will this Government do at least to demand that the Government of Egypt act according to what they state their aims are?
The Earl of Courtown
My Lords, the noble Baroness mentioned women’s rights. We welcome the provisions for the protection of women’s rights under the new constitution adopted in January 2014 and a law passed in June 2014 criminalising sexual harassment for the first time. The new law has led to several convictions. We have also deployed a regional gender adviser to our embassy in Cairo to strengthen the quality of our programmes in Egypt and across the region by focusing on gender equality.
Lord Winston (Lab)
My Lords, taking into account what the noble Lord, Lord Cormack, asked earlier, does the noble Earl agree that in a progressive democracy it is in everybody’s best interests if the Government’s concerns are expressed openly and transparently so that we all know of those concerns publicly?
The Earl of Courtown
The noble Lord is right in so many ways. President al-Sisi will be visiting the United Kingdom later this week and no doubt there will be reports on what is discussed.
Baroness Symons of Vernham Dean (Lab)
My Lords, I declare an interest as the chair of the British Egyptian Society, which is a cultural organisation dealing with educational and cultural links with Egypt. Does the Minister accept that it was under the previous regime of the Muslim Brotherhood that many women in Egypt lost their rights? Many of the women I know told me—perhaps the noble Earl has had similar experiences—that they were asked to wear the hijab when they had never worn it before; warned not to apply for jobs in public services; and told not to expect the same pay rises and promotion opportunities as their male counterparts. They said that under this regime that, at least, has improved.
The Earl of Courtown
With her great knowledge, the noble Baroness makes some very interesting points and I agree wholeheartedly.
Flood Reinsurance (Scheme and Scheme Administrator Designation) Regulations 2015
Lord Gardiner of Kimble
That the draft Regulations laid before the House on 1 July be approved.
Relevant documents: 1st Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 27 October
Motions agreed.
Maximum Number of Judges Order 2015
(9 years ago)
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Lord Faulks
That the draft Order laid before the House on 7 September be approved.
Relevant documents: 4th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 27 October
Motion agreed.
Asian Infrastructure Investment Bank (Immunities and Privileges) Order 2015
The Earl of Courtown
That the draft Orders laid before the House on 21 July and 12 October be approved.
Relevant documents: 3rd and 6th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 27 October
Motions agreed.
Byelaws (Alternative Procedure) (England) Regulations 2015
Baroness Williams of Trafford
That the draft Regulations laid before the House on 21 July be approved.
Relevant documents: 3rd Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 27 October
Motion agreed.
European Union Referendum Bill
(9 years ago)
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“( ) any United Kingdom citizen who does not fall within paragraph (a), but is resident in the European Union and has registered to vote in the referendum,”
Baroness Miller of Chilthorne Domer (LD)
My Lords, I remind the Committee of my interests as declared in the register: when Parliament is not sitting, I live in France, where my husband and I have a vineyard and a wine business. We have many friends there who are UK citizens, a number of whom have lived there for more than 15 years.
I am very grateful to the other noble Lords who have put their names to my amendment. I am sure they will have many good examples to bring before the Committee. Last Tuesday, when we discussed elections, the noble Lord, Lord Dobbs, asked for examples of real people. I am very happy to provide them. Indeed, I gave a couple of examples at Second Reading. But, first, I want to talk about the principle. I make it absolutely clear that I am not arguing for votes for life in general or local elections. Those elections involve different arguments about whether someone has invested in another country emotionally and financially more than they may have done in the country of which they are a citizen. What is before us today is a totally separate and different matter of whether British citizens who have lived in the EU for more than 15 years should have an exceptional franchise in this EU referendum. I am sure that they should.
If we can make a rule that exceptionally, Peers can vote in this referendum, we can surely make the same exceptional provision for a group with at least as great an interest in the matter as anyone in your Lordships’ House—and a group, I submit, with a lot more at stake. These British expats in the EU will face a giant step into the unknown, should the vote lead to an exit from the EU. They will face a mass of questions. Will they need to apply to become a citizen of the country in which they live? Will that even be possible? Will they pass any financial or language requirements? What will happen to their healthcare arrangements? How quickly will reciprocal arrangements cease? These issues have all been raised with me by very worried people. Even driving a motor car is not a given. My American friends Hank and Cindy, who live in France, have had real difficulty passing the French driving theory test, which comprises some 3,000 questions, all in a foreign language. I am not sure that many British expats of 70 and over would be able to do that.
Then there are those with businesses. For them, the implications are immense. Brian Cave from south-west France, who has long campaigned on this issue, says: “There are another half million or thereabouts in business on their own account or employed who are likewise concerned. It hardly needs expressing but they are concerned about the possibility of work permits—free movement around the continent. Free movement of capital for their businesses and for their own future pensions”.
With all these massive questions hanging over their future, surely these expats are absolutely entitled to a vote on whether or not the UK should remain in the EU. The fact that they have lived abroad for more than 15 years does not diminish that right but increases it. Years ago, they took to heart in an especially personal way the idea of the EU as a place in which to live and work, and so they have much more at stake. Many moved to the EU for employment after university. Those people often now have children at a critical stage in their schooling, and they will face upheaval in their own careers. In November 2012, a Home Office study showed that the majority of British citizens who emigrated abroad between 1999 and 2010 did so to work. Therefore, they moved abroad for a good reason and do not deserve to be penalised for it.
At this point I will give one example. Jane Golding says, “I now work in Germany as a lawyer under my home title practising EU law. I can do this because EU rules on mutual recognition of professional qualifications allow me to practise under my own title throughout the EU”. She has had an international career spanning four different EU countries. She says: “If the UK leaves the EU I could face losing my livelihood, because those rules no longer apply to me. Changing my citizenship, which I do not want to do, would not help. The worst-case scenario would be that I would need to requality. In short, having relied on my freedom of movement to leave the UK to find work in my field I now find myself deprived of a say in my future ”.
Lord Hannay of Chiswick (CB)
My Lords, I support this group of amendments. Amendments 17 and 19, which are mine, are of a similar thrust to that of noble Baroness, Lady Miller, whose amendment has been clearly and compellingly introduced.
When the Minister replies, I hope he will recognise that we are in calmer waters than we were last Wednesday in discussing the franchise. There is no difference of principle between those moving these amendments and the party of which he is a member, which stated in its manifesto that it believed that this category of person—people who have lived abroad for more than 15 years—should get the vote. I heartily support this view.
I hope that the Minister will also recognise that this class of voter—as I hope it will be—in the European Union countries has a greater interest in voting in this referendum than he or she ever had, or will have, in national parliamentary elections. It would be extraordinary if the Government did not exert themselves to ensure that these British citizens have the vote on this occasion, when their own rights and livelihoods are at stake. The Government have made a great deal of the saying, “the people must have their say”. Surely these are people who ought to have their say. They and their futures are directly involved in this. Frankly, it would be appalling if the Government, later in this Parliament, in an act of supreme generosity, gave them the vote—but after the referendum in which they wish to vote. I hope the Minister will give serious consideration to this issue.
Lord Spicer (Con)
When the noble Lord said that all UK citizens living abroad should get these rights, did he mean “abroad”? The first amendment in this group refers just to Europe. If he meant “abroad”, that is very interesting.
Lord Hannay of Chiswick
Naturally, since I rose to speak to some amendments on the Marshalled List, those are the amendments I am speaking to. If I did not repeat on each occasion, “Those citizens living abroad in other EU countries”, then I am sorry but that is what I intended.
Lord Flight (Con)
My Lords, this is clearly controversial territory and I look forward to hearing the Government’s rationale as to why the line has been drawn where it has. I have to say that I cannot see the argument for allowing British expats in EU countries to have the vote, but not all expats. There does not seem to be much difference between your career taking you to Berlin or to Singapore. Indeed, those who have gone to Singapore are often more likely to return to live in the UK in due course. Where to draw the line is a tricky question. The Scottish referendum was arguably wrong to exclude Scottish citizens who were at that time living in England. If we are to have expats, we should have them all, not just a particular category.
Baroness Royall of Blaisdon (Lab)
My Lords, I support the amendments which are on the Marshalled List and which have been comprehensively introduced. I note what the noble Lord, Lord Flight, says, and I would probably have no problem in widening the scope of these amendments to all expats. However, it is clear that people who have moved to the European Union to work are much more directly affected by the European Union than people working in Japan or America, for example. UK citizens who go to work in other member states are specifically worried about their personal and professional status, which will be directly and seriously affected by the EU referendum. As has been said, some face losing their right to work under EU mutual recognition rules, and thus their livelihoods. Changing citizenship would not help them. Of course, if British citizens work for British companies they might also pay national insurance and taxes in the UK. Retired former public servants such as police officers, military personnel, teachers and nurses receive a government pension, taxed at source in the UK, and make a contribution to the UK Treasury. All these people deserve and need a say in the referendum.
Like others, I ask the Minister: if the Government believe it right for British citizens to vote in future general elections, as announced in their manifesto, and will be introducing such legislation, why is it not right to give these people a vote in a referendum that will have a greater impact on their lives than any general election? Perhaps I am being terribly cynical, but I wonder whether the main reason why the Government wish to give Brits abroad a vote has nothing to do with principles or democracy, but with the fact that polling tends to demonstrate that the Conservative Party would gain more than other parties from receiving the votes of British citizens living abroad.
The Minister often cites what happens in other member states to support the Government’s case regarding extending the franchise. They say that it is not done in other member states and therefore should not be done in this country. I respectfully point out that 23 member states provide lifelong voting rights for their overseas voters. While I am on my feet, I pay tribute to the many members of Labour International who have campaigned on this issue for many years. I will specifically mention Harry Shindler, a 94 year-old resident of Italy who is an Anzio veteran, and who has campaigned tirelessly to scrap the ban.
Lord Garel-Jones (Con)
My Lords, I support this group of amendments. We have had some quite intense debates on this subject already. Many of the amendments debated previously were perfectly respectable but, some might argue, a little far-fetched whereas with this group of amendments, as the noble Lord, Lord Hannay, pointed out, we seem to have moved into calmer waters. We are talking about British subjects who happen to be retired or working in the European Union. The effect of the referendum on their lives would be quite substantial. As the noble Baroness has already pointed out, many of those who are retired are taxpayers here in the United Kingdom. Consequently, given that we have already made a concession to enable members of your Lordships’ House to vote in the referendum, I can see no possible reason why we cannot make a similar commitment to British subjects who are working or living abroad.
Lord Tugendhat (Con)
My Lords, may I say how much I agree with my noble friend Lord Flight? It is right that expatriates should have the vote, not just in the referendum but in general elections as well, whether they live in Singapore or the EU. When one looks at the way in which Australia, for instance, to take a Commonwealth country, or France, to take another European country, enable their citizens to do that, it seems extraordinary that we are unable to do so.
However, on this occasion we are talking about the EU referendum Bill and what should happen in the case of the EU referendum. I think the most important points have already been made by the noble Baroness, Lady Miller, and by the noble Lord, Lord Hannay. If we want the referendum to be fair, to express the will of the British people and to take account of the interests of British people of all sorts, it would be wrong to exclude those British nationals who are living and working in the European Union. We are members of the European Union. We have been encouraging our firms and citizens to take full advantage of the economic opportunities it offers, and for many that involves working elsewhere in the European Union. These people have been contributing to the British interest and British economy.
Other British people living in the European Union have retired—in Spain, Malta, Cyprus, or places of that sort. They too have rights. They have spent a lifetime in this country working, paying taxes and earning their pensions, and their lives will also be greatly disrupted.
We will come, in due course, to an amendment dealing with the consequences of leaving the European Union. We do not yet know what they will be. It will be a jump into the unknown—the start of a period of great uncertainty. But one thing is clear: we cannot be sure that the free movement of people will remain. A lot of people in this country want to prevent free movement. If they are successful, British people who are working, living and retired elsewhere in the European Union will find that their rights are restricted and their lives will be changed. This underscores the considerable interest that they have in the amendment.
Finally, mention has already been made in this debate, as in others, of the Scottish referendum and the lessons that we can learn from it. One of the things which struck all of us, even those who are as non-Scottish as I am, was that a great injustice of that referendum was the exclusion, not just of Scottish people living in England and elsewhere, but in particular of Scottish soldiers in Scottish regiments, let alone in other regiments who were outside Scotland at the time and who could not vote. That was an injustice and we do not want a repeat on this occasion. I hope the Government will look with favour on this group of amendments.
Lord Green of Deddington (CB)
My Lords, I have one question. Some very powerful points have been made and I do not dissent from the case for granting the vote to British residents in the EU. But we need to be clear that we are talking about a very substantial number of people here. The number of British citizens in the EU is about 1.3 million, according to the UN Population Division; maybe a couple of million, according to other estimates. We do not know the number of adults, but it is likely to be quite high because of the very high percentage of retired people in certain countries, so we could be talking about something like 1 million potential voters. Some of them will have been abroad for less than 15 years and would therefore have the vote under the present arrangements, but we could none the less be talking about pretty substantial numbers who, under this amendment, would get the vote in this referendum.
What is the justification for confining the vote only to those British citizens in the European Union instead of conferring it more widely? It seems to me that if the 15-year rule is to be abolished—and there are good reasons for that—it should be abolished for everybody. Otherwise, there is a clear risk that passing this amendment would look as though it was an attempt to skew the franchise, with damaging consequences for the longer term. The key thing about this referendum, surely, is that it must be fair and must be seen to be fair. If we are going to do this, let us do it for all overseas citizens.
Lord Anderson of Swansea (Lab)
My Lords, with respect it is easy to distinguish between those in Singapore and elsewhere, and those within the European Union. The essential principle should be not only to avoid anomalies or absurdities but to ensure we include those British citizens who have a clear and direct interest in the outcome—those who are clearly stakeholders because of free movement and because they perhaps still have pensions here, and so on. Because of the network of arrangements between us and our partners within the EU, they will be very closely and directly affected, far more than those in Singapore or various other areas. We should seek if possible to try to meet them.
I know from personal experience of having a residence in a part of south-west France that many people there keep a very close interest in what is happening in this country and have a direct financial interest. It seems to me that they have as great an interest as, for example, someone who may come here from outside the EU as a result of marriage, who may have very limited English and who may know very little about our culture and our history. Quite rightly, if they assume citizenship through marriage, they have a say, and so also should those who have perhaps spent a lifetime in this country until they go abroad in retirement. They have very close links with this country and a direct interest in it. Yes, those in Singapore may have that as well, but no one can seriously argue that they have as great a stake as those who live in the EU and keep very close links with us.
Lord Shipley (LD)
My Lords, I support this group of amendments, as I did in the Private Member’s Bill last year and also at Second Reading and on the first day of Committee. They represent a very major issue of principle. The Minister said on the first day in Committee that the Government had decided to use the Westminster franchise. I think the reasoning was that it is an established system that is easy to implement. The problem is that it is actually a very weak system because of who it excludes. We have heard all the reasons for that in the debate so far. The Government have accepted the principle of votes for life, and planned legislation to amend that anomaly, so I find it very puzzling to understand why the Government feel unable to implement it in time for this referendum, given that there is a fairly good chance that the referendum will not be held until early 2017. I hope that the Minister will explain in some detail why the timetable for legislation cannot permit the votes-for-life legislation promised in the Conservative manifesto to be implemented in time for it to apply.
One point that has not been made so far in the debate is that it is not difficult, in administrative terms, to resolve this problem. All those who qualified for a vote in this year’s general election and who may exceed the 15-year limit when the referendum is held are known to electoral registration officers, and extension of their right to cover this referendum would be straightforward to implement. Those not registered to vote in a general election who have lived outside the UK and the EU for more than 15 years could be invited to register using passport, national insurance number, evidence of current residence and evidence of their last residence in the UK.
The noble Lord, Lord Green of Deddington, talked about the numbers involved. Of course, this is an issue of principle—there may well be a lot of people, but the issue of principle seems to me to transcend the issue of how many people might be entitled to vote and how many people might register to vote. I agree with the noble Lord that if the votes-for-life Bill is for all those who live outside the United Kingdom, whether in the EU or elsewhere overseas, that is an issue we need to address. I would be very happy to support an extension to all UK passport holders wherever they live in the world. However, this group of amendments relates to those who live within the European Union. Of course, I accept that an extension of the kind proposed by this group of amendments would give the Government a bit of work. However, set against that should be the rights of all UK passport holders living in the EU to have a say in their future.
We have heard of the concerns that people have. I am particularly concerned as to whether the UK Government will continue to uprate pensions. In many parts of the world, pensions are not uprated. They are uprated within the European Union, because it is part of our agreement as a member of the European Union. Other issues have been raised, but this is really important to those living within the EU outside the UK. It is very important to be clear about these matters, and very important to acknowledge the right of those with a stake in the outcome to have a say. I hope, when the Minister comes to reply, that he will explain why the Government think it is appropriate for them not to have a say.
Lord Lexden (Con)
My Lords, the noble Lords who have tabled these amendments have performed a most valuable service which has wider international dimensions, as my noble friend Lord Flight and others have pointed out. I have strongly and consistently supported the removal of the arbitrary 15-year limit on the right of our fellow countrymen and women living overseas to vote in our parliamentary elections—a right first conferred by Margaret Thatcher’s Government. I urged its removal in my first speech in this Chamber in early 2011. I tabled amendments to the Electoral Registration and Administration Bill in 2013 in order to press the case for change. I took part in subsequent discussions on overseas voting arrangements in a cross-party group chaired by my noble friend Lord Norton of Louth—a group in which my noble friend Lord Tyler played a conspicuous part.
I was delighted when my party included an unambiguous commitment in its recent general election manifesto to sweep away the iniquitous 15-year bar. Swift implementation of that commitment would have dealt with all the aspects of this issue, both as regards the parliamentary franchise and, as a direct consequence, the forthcoming EU referendum. However, the Bill to give effect to the unambiguous Tory commitment has not even been published. I was greatly taken aback to be told, in answer to an Oral Question in July, that there was no certainty whatever that the Bill would reach the statute book before the referendum took place—and it has become even less certain since then. This is deeply disappointing. Nothing could have been more precisely predictable than the emergence of the huge problem with which we are now confronted if swift and early action was not taken.
It is extremely unfortunate, to put it mildly, that work was not set in hand at the earliest opportunity. The Tory pledge was made in September last year. A branch of the Conservative Party’s organisation with which I am closely connected, Conservatives Abroad, has two outstanding experts on all the issues involved in extending the right to vote to all British citizens living overseas. They could have helped prepare the way for the Bill, which, if it were now before Parliament, would have prevented the wholly foreseeable problem that the amendments seek to address; unresolved, it will inflict great injustice on a significant number of our fellow countrymen and countrywomen overseas.
It simply cannot be right to hold a referendum in which some British citizens living in another EU member state or elsewhere in the world are able to take part, while others are excluded because they happen to have been absent from our shores for more than 15 years. The outcome within the EU will affect them all equally and profoundly. It will surely be incomprehensible to our fellow citizens living abroad that an election manifesto commitment cannot be implemented by one means or another in time for them to participate in a vote of such overwhelming importance for the nation to which they belong.
We need to imagine ourselves in the shoes of Harry Shindler, to whom the noble Baroness, Lady Royall, paid tribute, and our other fellow countrymen and countrywomen who have been living overseas for over 15 years and have retained a strong sense of British identity. How would we feel about being excluded from this momentous referendum while those who have not reached the 15-year limit can take part? The Bill should be returned to the other place and amended in order to include British citizens who have been living overseas for more than 15 years. In that way, we would uphold the principle enshrined in the Conservative election manifesto.
Lord Bowness (Con)
My Lords, I added my name to two amendments in this group. I speak in support of the amendments and of the principles that have been enunciated today. The franchise as envisaged in the Bill is full of anomalies, and it was quite clear from the first day of Committee that not all those anomalies will be removed. This, however, is a very simple point, and it is one of justice and fairness. We are speaking of people who have made possibly lifetime decisions to go and live and work in the European Union, and we are proposing to have a referendum that will determine whether or not the state of affairs of the United Kingdom being within the Union continues. In my submission, those people must in fairness have the right to participate.
On the first day of Committee I heard words to the effect of, “a decision to be made by British people”. I hope that it is a decision to be made by all British people, not just those whom we are going to be selective about. We have heard that there is a promise to extend the franchise. That makes it even more unjustifiable to deny those British citizens the right to vote in this referendum.
It would be wrong for those who are opposed to it to see British citizens abroad as somehow tax exiles. Many British citizens living abroad may well be non-resident in terms of not living in this country but they will not be non-resident in the eyes of HMRC, whose grasp is tight and long. Those who have family, properties, sources of income or other matters that bind and tie them to this country remain within its net. Therefore, that is justification for enabling them to have the vote.
Putting it into context, we are seriously proposing that they should not have a say in this decision, in contrast with the arrangements of some other member states which ensure that their citizens who live abroad are represented in their legislatures by members specifically elected by those expatriate communities. I do not suggest that we move in that direction, but I think that it helps us to see the context in which this argument is taking place. I support the amendments in this group.
Lord Grocott (Lab)
My Lords, I would like to make a brief intervention, having heard the words “matter of principle” used by a number of contributors. As someone new to this particular debate and this group of amendments, it is slightly odd—is it not?—that a British citizen living in Stockholm under this amendment would be able to take part in the referendum but a British citizen living in Oslo would not. I certainly cannot see an issue of principle that would establish why that should be the case other than what seems to be a weak argument—certainly a very weak argument if it is elevated to being an argument of principle—which is that somehow or other one’s entitlement to vote in an election, whatever the election happens to be, should be dependent on someone else’s assessment of how significant the outcome of the vote would be for the individual concerned.
We do not do that in any other election that I am aware of. If you have young children at school, you are more likely to be affected by the outcome of a local government election than if you do not, because, as we all know, the bulk of local government expenditure goes into education. A person’s right to vote is simply not dependent—or it could never be described as a matter of principle to be dependent—on our estimate of how greatly or significantly the outcome of the vote will affect them. I wonder whether in the rest of the contributions we could acknowledge the validity of that argument.
Lord Hannay of Chiswick
My Lords, just before the noble Lord sits down, could I possibly correct him in so far as my own reference to a principle was concerned? When I introduced the amendment I said that I did not think that there could be any difference of principle between those of us moving this amendment and the Government who represent a party which in its manifesto said that it was going to give these people a vote. That was the issue of principle which I said did not exist between us; I did not widen the reference.
Lord Grocott
My Lords, I was not pointing the finger at any individual and certainly not at the noble Lord, Lord Hannay; I was simply making what I think is a very valid point that it is not for us to judge how significant an election outcome is to someone when we are proposing either to give them the franchise or to withhold it from them.
Lord Dobbs (Con)
My Lords, I very much welcome the Government’s manifesto commitment to give votes to all expats, no matter how long they have been abroad. It is a very welcome commitment which I look forward to seeing being put into place—but whether it is iniquitous that they have not yet been given the vote, as my noble friend suggested, I am not sure. These are matters of balance and practicality and it is to the practicalities that I will refer very briefly.
I take the point of my noble friend Lord Flight, who asked why, if we are giving votes to people in one part of the world, we should not give them to British citizens in all parts of the world. The Oslo and Stockholm example that the noble Lord, Lord Grocott, offered is very telling. There are something like 5 million British expats living abroad and 2 million of them, give or take a few, live in the European Union. For a very long time they have had the right to vote if they have been there for 15 years or less and I find it deeply distressing, because I believe that they should take an active role in their democracy, that fewer than 20,000 British expats in the European Union have taken up that right to vote. Despite all the efforts and the funding that has been given to advertising by the Government to get them involved, as a group they have shown a very sad lack of willingness to get involved.
Lord Lexden
My noble friend is right about the situation that existed in 2013 and 2014, but a magnificent effort was spearheaded by Conservatives Abroad, though not on its own, which helped greatly to increase the number registered to more than 100,000—not all in the European Union—at the last general election, which was the largest number ever registered.
Lord Dobbs
I am delighted to receive that update, although as my noble friend says, they were not all in the European Union. However, even if we take the figure of 100,000 around the world, that is not an overwhelming example of enthusiasm by that group of 5 million. I wish it had been more—let me put it that way. That is not a criticism. I just wish that it had been more.
Lord Anderson of Swansea
Even a figure of 100,000 is lower than one would like it to be. However, could it be that the small number who have registered for general elections believe that they have a stronger interest in this momentous decision in the referendum than they have had in general elections in the UK, and therefore may be more inclined to register?
Lord Dobbs
I have to grant that that is a possibility. However, this referendum has not exactly been a hidden secret: we have been campaigning about it for years. I would have hoped that if they had a real interest in the referendum, they would have taken the opportunity, as has existed, to sign up. This is not as simple an issue as some noble Lords have made out. It is a matter of great principle. It is a balance. Sadly, we do not know where these people are, in which countries, or how many they are. We will have difficulties contacting them because we do not know where they live. I am nervous that if we make a commitment that we cannot meet, it will end up in a mess. We are all concerned with making sure that this referendum—
Lord Green of Deddington
It is most interesting that the noble Lord should say that the number of registrations is so low. Of course, it will be higher if there is actually a referendum. But if the numbers are relatively small, perhaps I should turn my argument on its head and say that if a large number of people are not concerned here, why take the risk of appearing to alter the franchise in your own direction?
Lord Dobbs
I would hate to turn the noble Lord’s argument on its head, and I ask him to forgive me if I have encouraged him to do so. I am simply trying to set out some of the practical difficulties. This referendum could be held as early as September of next year, and I believe that this legislation could not be implemented until the early part of next year. It imposes extraordinarily difficult practical problems, and the last thing that any of us wish is an outcome that looks like a mess because of unsatisfactory registration. I ask my noble friend to consider that. If there were a sensible way of ensuring that all British expatriates abroad could be put on the register by the first possible opportunity of September next year, I would very much welcome it.
Lord Tyler (LD)
Is the noble Lord aware that the Electoral Commission does not anticipate any great difficulty? As a result of the very considerable efforts made before this year’s general election, to which the noble Lord, Lord Lexden, has just referred, the arrangements are hugely improved—not least, of course, because of online registration. If the noble Lord, Lord Dobbs, has information from the Electoral Commission that is adverse to that particular advice that it has given previously, perhaps he will give it to the Committee.
Lord Dobbs
I will be delighted to, and I thank the noble Lord for his intervention. I talked to the Electoral Commission just a little while ago, before the vote last week on individual electoral registration. It emphasised that if we were, for instance, to offer 16 and 17 year-olds the vote, which is a position, as he knows, that I have put forward, it would have exceeding difficulty—the noble Lord shakes his head. I am not quite sure what I have said that he could possibly disagree with, as I have not yet come to a conclusion. Maybe he has already made up his mind. The commission said that it would have exceeding difficulty in making those arrangements for 16 and 17 year-olds who are in this country before the autumn of next year. How much more difficult would it be for people when we do not know who they are or where they are? I ask this Committee to consider the practical difficulties of what we are asking for and not to end up passing bits of legislation that make the referendum a mess.
Lord Wallace of Saltaire (LD)
My Lords, I think that the noble Lord, Lord Green, was implying that we would expect expats living elsewhere in the European Union to vote in one direction rather than another. Certainly during my most recent visits to southern France, southern Spain, Portugal, Italy and Cyprus, it became clear that the two British newspapers that are most readily available are the Daily Mail and the Daily Telegraph. The Guardian is the most difficult one to obtain, so I am not sure that one should assume that people will naturally vote one way or another.
Lord Dobbs
Again, I am grateful for the intervention, but I hope now to be able to sit down. I do not think that the noble Lord was listening because I do not believe that I made the slightest indication as to whether expat voters would vote one way or the other. That is not our concern, and the decision should not be based on whether they are likely to vote in one direction or the other. It is a matter of rights and of practicality.
Lord Hamilton of Epsom (Con)
My Lords, I support the remarks of my noble friends Lord Flight, Lord Dobbs and Lord Lexden, and indeed the noble Lord, Lord Green. It seems to me that if you are going to enfranchise British citizens living in the EU, you must spread that across the whole world. It is only on the margin that you can argue that somehow a citizen living in the EU has a much greater interest in the outcome of this referendum than one who, say, works in financial services in the Gulf, Singapore or Hong Kong and has every intention of coming back to the United Kingdom.
Lord Tugendhat
As my noble friend will recall, I supported the contention of my noble friend Lord Flight that everybody should have the franchise, but surely there is a very big distinction between somebody working or living in the EU and somebody living or working outside the EU. If we leave the EU and we inhibit freedom of movement for people coming into this country, then freedom of movement for people going out from this country will be affected. Therefore, the people living in the EU will perhaps have their lives very materially affected, which those living in Cape Town or Sydney will not.
Lord Hamilton of Epsom
Of course, when we come to debate whether we should stay in or go out, this is really going to be the basis of the whole campaign: there will be all these wonderful scare stories about how barriers are going to be put up. I remind my noble friend Lord Tugendhat that there are probably just as many EU citizens living in the United Kingdom as there are British citizens living in the EU, and therefore in the inevitable negotiations that will take place after a decision to leave—if such a decision is made—something will need to be done to cater for these people so that they can travel without visas between both countries.
I also remind my noble friend that we are not part of the Schengen agreement, so there is not free movement of citizens directly from the EU into the United Kingdom. They have to show their passports, which they do not have to do when crossing borders in the EU, as we have discovered through the inordinately large number of immigrants now coming into the EU.
I also want to pick up on the point about the timing made by the noble Lord, Lord Shipley. This is obviously of major concern to the Government, and I know that my noble friend will be covering it in his response to the debate, but we must know exactly what is involved in getting these people to register. I make it absolutely clear to the Committee that if an amendment on this is tabled on Report, I shall certainly ensure that another amendment is tabled to enfranchise all citizens around the whole world.
Baroness Smith of Newnham (LD)
My Lords, I had planned to keep my comments incredibly brief. Obviously I support the amendment in the name of my noble friend Lady Miller and the amendments in the names of the noble Lord, Lord Hannay, myself and others. Like the noble Baroness, Lady Royall, I feel that we should speak to the amendments that are listed to be dealt with today. While there may well be a case for enfranchising British people who have been abroad for more than 15 years wherever they live, that is not what we are discussing today.
One issue that has come up several times is the number of people. Frankly, I do not believe it matters whether there are 1 million or 2 million British people living in the European Union or EU nationals living in the United Kingdom, or how many 16 and 17 year-olds there are—which was the subject of debate on our first day in Committee. We should be talking about the principles and whether we believe that EU nationals resident in the UK and British citizens who are resident for more than 15 years in the EU or elsewhere should be allowed to vote. Those are matters of principle; the actual numbers really do not matter greatly. Although it was interesting to hear the noble Lord, Lord Green of Deddington, turn himself round on this issue, I am not persuaded that the numbers matter.
Lord Green of Deddington
The reason why the numbers matter is that if we get a close vote, as is possible, and if we are discussing here matters that involve potentially significant numbers, we will need to understand how that would be perceived afterwards.
Lord Spicer
It is notable that pretty well every speaker has spoken in support of what the noble Lord, Lord Flight, said. It was the reason why I intervened on the noble Lord, Lord Hannay, when I asked him whether he really meant “abroad”—because if he had, it would have been a very significant thing. However, we are where we are. I hope the Government—
Lord Hannay of Chiswick
I am sorry; I think the noble Lord has misunderstood yet again what I said. In my opening remarks I said that I welcomed and supported what was in the Conservative manifesto. When it is brought before this House, I will vote in favour of it. I am in favour of the vote being given to all British citizens who live abroad, irrespective of where they live. However, in the context of this Bill, which is about an EU referendum, I have advanced an amendment which is designed to give people who have a serious interest in that referendum the vote. But there should be no mistaking it: I am not distinguishing between the two except in the context of this Bill. I shall be there to vote with the noble Lord when the Representation of the People Act comes forward.
Lord Spicer
I very much understand why the noble Lord makes a distinction, because—I will say it again—the amendment that he has produced in its form will hope to skew the results. One point made in this short debate is that the reason for having this rather skewed amendment is that people who live in the European Union like living there. Well, fine, but it gives a perspective on the answer that they might give in a referendum. I have no doubt that the noble Lord has that in his mind. I therefore say to the Government, who are meant to be neutral in all this, that in the interests of fairness and neutrality, and if they are going to extend the franchise, they should listen to the arguments for doing so on a worldwide basis.
Viscount Trenchard (Con)
My Lords, I, too, wholly agree with what my noble friend Lord Flight said—that if we are going to extend the vote in the referendum to those United Kingdom citizens who live outside the United Kingdom, it should be extended to all of them. However, I do not feel that those who live outside the United Kingdom have quite an equivalent right to vote as those who live here. As democracy was being extended in this country, it was often said, “No taxation without representation”. I seem to remember that when I went to live and work in Japan, I stopped paying United Kingdom income tax fairly immediately, although I did have to pay Japanese income tax, which was at rather a higher rate.
I later became chairman of Conservatives Abroad in Japan, and asked for the franchise for those of us who were abroad for a relatively short time with the clear intention of coming back. If you have been abroad for a long time and made your life abroad and have no intention of coming back to the UK to live, your right to have your voice heard in a general election or referendum is somewhat less. There may well be a case for extending the franchise beyond 15 years to United Kingdom citizens abroad, but there are practical difficulties in tracing who they are. On which electoral register would they be if they no longer have any family members living in the area where they previously lived? It seems rather complicated, so I cannot support the amendments.
Lord Liddle (Lab)
On the point about British citizens living in the EU, of course I go along with the principle of no taxation without representation, but many of our citizens who live on the continent worked in Britain all their lives, paid taxes all their lives and have gone to the continent to retire. So it is a bit hard to deny them the vote on the no taxation without representation ground.
Lord Dobbs
If they have gone to the continent to retire after an active working life in this country, the chances are that many, if not the majority of them, will still have the vote under the existing 15-year legislation. Not all of them, but very many.
Baroness Morgan of Ely (Lab)
I hate to break the cosy consensus that is obvious here in the Chamber today, but the Labour Party does not believe that the vote should be extended beyond 15 years to people living in the EU. We are intensely aware that some British people who live abroad, especially in EU member states, have maintained a close connection with their mother nation. As we have heard, many of them continue to contribute through taxation or simply feel that the UK is still their home. But the fact is that they do not live in this country, and we argue that 15 years is a reasonable amount of time to take into account short-term work contracts, for example.
The issue of citizenship and the responsibilities of citizens is a complex and difficult area, especially in the UK. We heard last Wednesday about the report written by the noble and learned Lord, Lord Goldsmith, on the six different categories of citizenship in this country. It would be appropriate for this House to have a broader discussion on citizenship at some point. However, if in principle, as we were discussing on Wednesday, we want people who have been in this country for more than 15 years integrating, taking part in their communities and setting down roots, should we not ask British people to do the same in their adopted countries? That was part of the point made by the noble Viscount, Lord Trenchard.
It is also worth taking note of the remarks made by the noble Lord, Lord Grocott. If we introduce a system whereby we look at who is going to be impacted, and whether they therefore get a vote, we are on a pretty dangerous path.
It is also worth taking note of the practical issues set out by the noble Lord, Lord Dobbs. How do we register these people? We are keen to see the franchise extended to 16 and 17 year-olds. How do we start rounding those up across the EU or the whole world?
We are particularly aware, however, that there are people in the EU who have remained there because they are flying the flag on behalf of our country. I know that people who have worked in the EU institutions for many years are upset that they are going to be disfranchised following years of service in the European Commission or the European Parliament.
We know that many people have lived in the EU for more than 15 years. They will feel very vulnerable at this vote because the one thing we cannot be sure about if the UK votes to leave is what their status will be in the countries in which they have made their homes. Will they be able to stay in some countries but not others? Will they be able to use the health service in their adopted nations?
Lord Hamilton of Epsom
Will not the noble Baroness accept that there are large numbers of EU citizens living in this country? There will be a period of prolonged negotiation if the vote is made to leave, and obviously the status of EU citizens living in the United Kingdom will be addressed in the same way as British citizens living in the EU. All these matters will be resolved through negotiation.
Baroness Morgan of Ely
That is easier said than done. The suggestion is that this will be a prolonged period. However, the reality is that the negotiation would have to be concluded within two years. That is not a long time for people to look at their status within a nation and for us to look at the status of EU citizens within this country. You have to understand the practicalities of the mechanism for disentangling our relationship with the EU if people were to vote to leave it. It is important to understand whether people would be able to get their pensions transferred if we were to leave the EU.
We have had no answers from the UK Government on these issues but there must be no question whatever about the legitimacy of this referendum. We believe there should be a cut-off point in terms of when people should lose their entitlement to vote if they have made their home abroad. We think the current cut-off point of 15 years is about right. However, let me make it absolutely clear that there is no inconsistency in the Labour position on this. The Conservative Government have said clearly that they want to see it extended; that they want British citizens who move abroad to be able to vote for ever. We do not believe that and we will object to that Bill when it comes to this House. I hope the House will agree that at least there is a degree of consistency in the Labour Party position on this issue. We do not want to see this franchise extended beyond 15 years.
The Minister of State, Ministry of Justice (Lord Faulks) (Con)
My Lords, the purpose of this group of amendments is to allow British citizens resident in other EU member states to vote in the EU referendum irrespective of the time they have been resident overseas. This would lift the current 15-year time limit on voting rights for British citizens resident overseas, but only for those Britons resident in the EU. The noble Lord, Lord Hannay, said that with this group we were entering calmer waters. The waters proved to be calm-ish. As noble Lords will be aware, the Government are committed to lifting the 15-year rule. I trust that some of the support that has come from various quarters of the House will be extended when we bring forward a dedicated Bill in due course.
We should not make novel changes to the franchise lightly. Both Houses will need to consider it very carefully. It would require complex changes to the electoral system; we would need to take decisions about how to deal with potential fraud, and how to update electoral registration and ensure that changes are fair and robust. The principle—though I hesitate to use that word in this debate—is simple, but there is real complexity here as well. Critically, we want to include all British citizens living overseas, not only those living in other EU member states. The noble Lord, Lord Grocott, pointed to differences that might arise between Stockholm and Oslo with this amendment; my noble friend Lord Flight compared Berlin and Singapore. I know that the noble Baroness, Lady Miller, is not concerned with those outside the European Union, and that the noble Lord, Lord Anderson, said that things are rather different if you are not in the European Union. However, it may not be easily justifiable to distinguish between those living within and outside the European Union. The noble Lord, Lord Grocott, was right to say that degree of interest—either specifically or in terms of effect—is not the criterion for deciding whether somebody is allowed to vote. Some who live within the European Union may be entirely indifferent to what happens in Europe; some who live outside the European Union may be either directly affected or significantly concerned with the outcome.
Lord Hannay of Chiswick
Is the Minister seriously suggesting that, if and when the piece of legislation we are now discussing goes on the statute book—which I hope and think will probably be around Christmas—the Electoral Commission will have any inhibition at all in getting on with it, should it contain a provision that this group of people should have the vote? Surely he is not suggesting that the Commission has to wait until the Government decide the date of the referendum before it starts work.
Lord Faulks
The date of the referendum is of course unknown. No doubt the Electoral Commission will fulfil whatever the existing legislative obligation requires it to do. It may require a great deal of energy and expenditure, and while I am not saying from the Dispatch Box that it would be impossible, one should not underestimate the complexities involved in the process.
The noble Lord, Lord Shipley, said in effect that he is concerned that there was some form of delay by the Government. Perhaps I may reiterate that the Government are committed to scrapping the 15-year rule and they are currently considering the timetable to do this. The date of the referendum is not known, so I am afraid that I cannot make any commitment that votes for life will be in place in time for the referendum. However, we should remember that many British citizens living abroad will be eligible to participate in the referendum vote.
Baroness Royall of Blaisdon
My Lords, forgive me, but I am bound to ask this. The Minister has cited the complexities of introducing new legislation, which I accept entirely. But knowing of the complexities involved and the organisational challenges mentioned by the noble Lord, Lord Dobbs, and knowing that we are going to have a referendum, why was the legislation to extend the franchise to all citizens living abroad for the forthcoming elections not introduced as one of the first Bills of this parliamentary Session?
Lord Faulks
The Government have their priorities and a considerable amount of legislation has been introduced, some of which has moved fairly slowly through your Lordships’ House. I cannot speak for the Government’s assessment of their priorities. This is an important matter and it will no doubt take its place in due course.
The noble Baroness, Lady Royall, suggested that the Government’s enthusiasm for UK citizens having a vote outside the EU might be motivated by their apparent desire to vote Conservative. As I have said consistently from the Dispatch Box, we have no idea how people would vote, whether they live in the EU or outside it. The Government are simply not concerned with trying to second-guess anything. They are concerned only with legitimacy—here, I agree entirely with the noble Baroness—that people feel there has been no manipulation and no sense that there has been an attempt to skew the result, however illegitimate they might think it was. We suggest that the best criterion is to have the Westminster franchise. Of course, I am sympathetic to much that lies behind the amendment, having regard to the Government’s commitment in respect of votes for life.
I should finally point out that many British citizens living in the EU and elsewhere in the world will be able to vote in the referendum as long as they have not been living overseas for 15 years or more. The parliamentary franchise already allows them to vote. So while I am sympathetic to the amendment, I do not believe that this is the time or place to make those changes.
Baroness Miller of Chilthorne Domer
My Lords, I warmly thank all those who have spoken in this interesting debate, which I think has fleshed out some of the major questions. I would like to make a couple of points. The noble Lord, Lord Grocott, asked what the difference is between someone living in Oslo and someone living in Stockholm, and other noble Lords had that question in their minds. The difference is that the people living in EU countries, when they decided to work or to retire abroad, for example, did so on the basis of being EU citizens, not citizens of anywhere else. What we are possibly about to remove in the EU referendum, if it goes the other way, is that EU citizenship. That puts them into a totally different category.
Lord Grocott
But, my Lords, as soon as you start speculating about other people’s motives, you end up in pretty deep water. It might be that someone has gone to live and work in Oslo because Norway is not a member of the European Union. You simply cannot make those kinds of judgments about people’s motivations.
Baroness Miller of Chilthorne Domer
I am clearly not going to agree with the noble Lord on that one. I think that there is a basic difference between us in our understanding of what being an EU citizen is. However, I was not as depressed by that argument as by the one put forward by several noble Lords—notably the noble Lord, Lord Dobbs—that it really all seems to be much too difficult. There are too many people and how would we reach them? That is not a reason for not giving people the vote.
Lord Dobbs
The noble Baroness really must not misunderstand me. I was not saying that it would be too difficult; I was simply saying that there are practical issues which need to be taken into account. They cannot be swept aside by somebody’s passion for a principle that they have suddenly grabbed on to in opposition, but seemed to be rather quiet about when they were in the coalition Government.
Baroness Miller of Chilthorne Domer
I think what the noble Lord said when he referred to Hansard was that there were too many practical problems. That comes back to the Government’s attitude, too. I can see that we are not likely to agree at this stage, but I am very glad to have discovered the true objection to the reason for giving people a vote. Before Report, it would be very useful if noble Lords dissociated votes for life, which is a totally different issue, from the right to vote in the EU referendum. I respectfully say to the noble Baroness, Lady Morgan of Ely, that she talked a lot about what is effectively a votes-for-life issue. When we come back to the Bill on Report, we need to concentrate solely on the EU referendum and not get diverted by something the Government seem to offer as a sop, saying that there is going to be a Bill on votes for life, if there is time, in this Parliament. Most of the EU ex-pats I have come across are Conservative voters—so I am not batting for them because I think we will do well out of it in the long run—and they are appalled at being given such a short straw.
Finally, several noble Lords who oppose these amendments seem to draw comfort from the fact that lots of EU citizens have been in the EU for less than 15 years and therefore would have a right to vote. That is no reason to feel better, because noble Lords themselves have discovered the inequity in their argument. I will come back to this issue on Report, but in the meantime I beg leave to withdraw the amendment.
Lord Hannay of Chiswick
“Report on the consequences of United Kingdom withdrawal from the European Union
(1) No later than 12 weeks prior to the appointed date of the referendum, the Secretary of State shall publish, and lay before each House of Parliament, a comprehensive report on the possible consequences of withdrawal from the European Union, taking into account the reports published under the Review of the Balance of Competences.
(2) The report provided for by subsection (1) shall include information on—
(a) the effect of withdrawal on the rights of individuals within the United Kingdom, including the effect on employment rights;(b) the rights of European citizens living in the United Kingdom following withdrawal; (c) the rights, following withdrawal, of United Kingdom citizens living in another country that is a member of the European Union;(d) the legislative and statutory consequences of withdrawal for each government department and for the devolved governments of the United Kingdom, including for social and environmental legislation; and(e) consequences of withdrawal for law enforcement, security and justice in the United Kingdom and in the devolved jurisdictions.”
Lord Hannay of Chiswick
My Lords, we have now moved away from the franchise—and not before time, as we have spent quite a lot on it. I suspect the Minister will be able to pass on the baton at this moment, but we are moving on to a matter of substantive policy. Above all, these amendments seek to address what most debaters on both sides of the argument in this House, the other place and the country recognise as being a genuine problem: the lack of objective information about the implications of the referendum vote. All the opinion polling over many years has demonstrated that there is a great deal of misunderstanding, and sometimes misrepresentation, of the facts of our membership and what would be implied by our leaving the European Union if the vote goes in that direction.
Lord Grocott
I am grateful to the noble Lord for giving way. I do not disagree at all with what he is saying about providing as much information as possible on the consequences of withdrawal. As other amendments propose, that information should also address the consequences of remaining in. Both sides should be presented. What I am not absolutely clear about is his suggestion that there can be an objective set of propositions on these matters. How would one present an objective position on, for example, the costs of the common agricultural policy?
Lord Hannay of Chiswick
I am sorry to disappoint the noble Lord but the amendments to which I am speaking do not relate to presenting anything about the common agricultural policy. That is not in the list of areas provided here. These amendments, and the request for a report from the Government, address factual areas where people’s rights or responsibilities will be affected by a vote to leave. The previous Government provided a lot of evidence-based material of that nature in the balance of competences review—a review which the present Government seem to prefer to forget that they had any paternity interest in, but they did. It was, I thought, a pretty good piece of work and there is a huge amount of material there. However, it is not yet addressing satisfactorily some of the factual areas. What are those factual areas? First, there is the question of the rights—
Lord Grocott
I am sorry to interrupt the noble Lord again and I am grateful to him for giving way. He slightly threw me by saying that this has nothing to do with the common agricultural policy. However, subsection (2)(d) of the proposed new clause refers to,
“the legislative and statutory consequences of withdrawal for each government department”.
It would be very strange for the information on the consequences of withdrawal for the department concerned with agriculture not to include a reference to the common agricultural policy.
Lord Hannay of Chiswick
I am sorry. I will get to that. I hope that the noble Lord will be patient and wait until we get to that part of the amendment. I will then explain what it is intended to suggest.
The first area where it is suggested that it would be valuable for the electorate to have a factual assessment of the consequences of a decision to withdraw relates to the rights of individuals, including their employment rights. It is not important to tell them how these rights would be affected by a decision to stay in as in that case the rights would be the same as they have now. The second area concerns the effect of withdrawal on the rights of EU citizens in this country, many of which are secured under EU law. They also need to know what the consequences would be.
The third category is the rights of British citizens in the rest of the EU, the people about whose ability to vote we were discussing in the previous set of amendments, but who have serious rights bestowed on them under EU law that they would lose if we left. I am afraid that it is no good, as the noble Lord, Lord Hamilton, kept saying in stating that it is sure to be all right on the night, and that there are an awful lot of EU citizens here and an awful lot of our citizens there, and that it will all roll out. That is the leap in the dark proposal. People who leap into the dark sometimes find that they have fallen rather a long way.
Then there is the point raised by the noble Lord, Lord Grocott, which is a further category—the legislative and statutory consequences of withdrawal, department by department, and addressing the legislative burden. That asks the Government what they would have to do in order to replace the common agricultural policy if we withdrew. Presumably nobody in this House seriously believes that the British agricultural economy could survive without any governmental involvement. There would have to be a British agricultural policy and that would have to be enacted by Parliament. There would have to be a British policy on research and on business regulation, and a whole range of things, many of which are contained in European Union law. This amendment asks the Government to set out what those requirements would be in the circumstances that I am describing.
Lord Hamilton of Epsom
Does the noble Lord accept that there would indeed have to be a new policies on these, but that there would be plenty of money to pay for them as we would not be paying our net contribution to the EU any more?
Lord Hannay of Chiswick
I do not know whether the noble Lord, Lord Pearson, is intervening in my speech. Perhaps I could reply to the noble Lord, Lord Hamilton. That is the normal practice. The point that he raised is perfectly valid, but it is not called for in this amendment. The question of the financing of these policies would as usual escape the control of your Lordships’ House and be dealt with in a Budget. I imagine that British farmers need to know under what regime they would live, what the rules and regulations would be, and above how all that regime would be brought about in time.
Lord Pearson of Rannoch
My Lords, perhaps I can put a little flesh on my noble friend Lord Hamilton’s question. I do not know whether the noble Lord, Lord Hannay, saw the Pink Book figures that emerged on Friday. They state our gross contribution for 2014 as £20 billion, of which the mandarins in Brussels were graciously pleased to send back to us a mere £7.5 billion. In the spirit of the noble Lord’s question, does the noble Lord, Lord Hannay, agree that we would have at least £12.5 billion clear to meet any financial difficulties arising from the points that he is making?
Lord Hannay of Chiswick
No, I do not agree and I do not have to address it in this debate, because it is not what we are debating. I remind the noble Lord, Lord Pearson, that in the most recent certified figures, which were produced for 2013—I am not aware of the ones to which he has just referred—the British net contribution per capita was ninth, behind that of France, Germany, Italy, Sweden, the Netherlands, Belgium and Luxemburg, and a few other countries.
Lord Hannay of Chiswick
No, I will not take more interventions on the budgetary issue. That is not what this is about.
Lord Dobbs
It is not about the budgeting—I am grateful to the noble Lord for giving way. I want briefly to draw his attention to a Legatum Institute report today which ranks the prosperity of various nations in the world. Britain happens to have the best record in the last year of any major European country. Interestingly, according to that report the first and second most prosperous countries in Europe turned out to be Norway and Switzerland. I do not know what the noble Lord reads into that but I thought that it would be of interest to his discussion.
Lord Hannay of Chiswick
I will probably cause the noble Lord, Lord Pearson, apoplexy if I say that what I read into it is that we are probably paying less into the European Union than we ought to, if we are so prosperous and yet only ninth in our per capita contribution.
Lord Spicer
Can I ask one question about what is in the noble Lord’s amendment? In Amendment 21, subsection (2)(e) of the proposed new clause refers to comparing what the effect will be on jurisprudence, criminal law and so on. How dynamic will be the base from which this assessment will be made? It is always argued, for instance, that we will never have a totally Europe-wide criminal law but we all know that that is the direction we are going in. What is the baseline from which this assessment will be made?
Lord Hannay of Chiswick
I think that the noble Lord is referring to the last paragraph of the subsection, which is on law enforcement. The situation there is fairly easy to follow. The present situation is that we have opted back into, I think, 36 justice and home affairs measures—no, it was fewer than that. It is Protocol 36 but the number is somewhere in the 30s, and those measures are the ones that apply in this country now. The ones that we did not opt back into do not apply and would therefore not be affected by a decision to withdraw. The ones that we did opt back into and which do apply in this country would be affected by a decision to withdraw. They include things such as the European arrest warrant.
If I may skip on to this part of the amendment, the implications for law enforcement, security and justice and, above all, for the European arrest warrant are extraordinarily serious. We discovered at the time of the Protocol 36 discussions, which were pretty intensive in this House, in the other place and in the public press, that the consequences for law and order on the island of Ireland could be extremely serious if the European arrest warrant did not exist. It has in fact managed, for practically the first time in recorded history, to depoliticise the issue of extradition between the two parts of the island of Ireland. It is now possible to get back criminals, including terrorists, who are wanted for trial in Northern Ireland from the south without a highly politicised process, and very expeditiously. That would be lost if the European arrest warrant ceased to apply in this country and, I suggest, that would have pretty serious implications for the rule of law in Northern Ireland.
Lord Hamilton of Epsom
Does the noble Lord not accept that there are extradition treaties with other countries that are not in the EU, so there is absolutely no reason why they should not go on within the EU after we had left?
Lord Hannay of Chiswick
I really do not think that we should delay the Committee with a replay of the Protocol 36 debates. The noble Baroness, Lady Anelay, is looking quizzically around. She was the Chief Whip at the time and was very familiar with the arguments. The fact of the matter is that every legal body in this country—the Bar Council, the Law Society and anyone else noble Lords might like to think of—came forward at that time and said that to renegotiate extradition agreements with each of the other member states of the EU would be defective and slow, and that it would not work as well as the present arrangements.
In any case, this is not a request to go around that course again. Parliament has decided that we are in the European arrest warrant and in the other wings that we opted back into. This is a request for the Government to provide factual information about what would be at stake if the electorate were to vote to withdraw from the European Union. It is surely reasonable for that information to be provided and along with it, naturally, the implications for law and order, law enforcement and so on—and for Northern Ireland.
On the need to introduce new legislation, I mentioned the agriculture and fisheries policy. We would have to construct a new tariff. We would have to decide the tariff we were going to apply, rather than the common external tariff of the European Union. That is no small matter. It affects every single business in this country. The level at which we would apply the tariff would have to be decided. It could be lower than the common external tariff, which would be helpful to freer trade; or higher, in which case we would have to pay compensation to every other country in the world; or the same, in which case, what the hell were we doing? These are important points and I hope that the Minister in her reply—
Lord Pearson of Rannoch
My Lords, if the noble Lord is referring to our markets in the European Union, we happen to be its largest client. Is there any reason why we should not continue exactly as we are in our mutual interest?
Lord Skelmersdale (Con)
My Lords, before the noble Lord replies, can we get back to some sort of order, so that we can have the points explained with some degree of logicality? If the noble Lord, Lord Hannay, has finished his original speech on presenting the amendment, could he perhaps move it so that we can get on in the normal way?
Lord Hannay of Chiswick
Yes, I would be delighted to do that. I have been interrupted rather a lot of times. I will reply to the noble Lord, Lord Pearson, before following that sage advice. I was not addressing just the question of our trade with other member states. There will be plenty of other opportunities to do that. I was talking about our trade with the rest of the world. If the vote goes for withdrawal, we will have to construct a new British tariff. If that tariff is above the level of the common external tariff, we will have to pay compensation under the WTO rules to every other member of the WTO. These serious matters need to be brought out into the open. I beg to move.
Lord Wigley (PC)
My Lords, I support the noble Lord, Lord Hannay. I cannot see how any reasonable person could possibly object to the amendment, in terms of getting the information that is needed to enable people to come to a balanced decision. Of course, whichever way they vote, the information should be neutral and factual.
My Amendments 28 and 29 are linked to this group and refer to two specific areas, including agriculture, which the noble Lord, Lord Grocott, addressed a few moments ago. Amendment 28 raises the issue of European Union structural funds. This area is of great significance to two-thirds of Wales, which are within the structural fund area and which, since 2000, have received several thousand million pounds, first from Objective 1 funding, then convergence funding and now the current round that runs to 2020.
Currently many organisations in Wales in the public and private sector look to these sources of funding to make a vital difference. If leaving the European Union during this time is going to change the entitlement to such funding, it clearly has a direct, immediate effect on such organisations, whether universities, local government or people in the private sector. They have a right to know about this.
It is not unreasonable to ask for an assessment in the generality but also specifically with regard to the regions that have a direct entitlement to such funding. Some areas, such as South Yorkshire, Merseyside, Cornwall and Northern Ireland and, in the past, the Highlands and Islands of Scotland have benefited from such funding. It is of material consequence. It is made available on the basis of the low level of the economic performance in areas such as Wales. Our GVA per head now stands below 75% of the UK average, because of the failure of successive economic policies. We will not go into whether that failure is on account of what has been done here at Westminster or in the Assembly, but the funding is because of that failure. We are entitled to such funding to try to trigger the economy. Cornwall has undoubtedly succeeded to a considerable extent by using this funding, perhaps better than we have in Wales. Although the authorities in Brussels say that the way in which Wales has used the funding has been an example to other parts of Europe, none the less, we still have these economic problems. People in Wales deciding whether to vote to leave the European Union or to remain in are entitled to some assessment of what effect a loss of this funding might have.
I take the point that was made in the context of the earlier exchanges that perhaps the Treasury would make up for this loss. But history does not fill us with a lot of confidence about that. Until 2000, we were not getting anything at all, because the Treasury refused to put forward proposals to Brussels that would entitle Wales to such funding. It drew a map, divided from north to south, and made sure that neither side of that line was entitled to get the money. It was only when a new map was put forward that we got our entitlement.
Then there was the experience even after we started getting money from Brussels. In 2000, when the Objective 1 money was coming through, we found that it was not being passed on by the Treasury to the National Assembly. We were expected to spend the money but were not getting the contribution from the Treasury because we were already being looked after very well indeed. I went off to Brussels with a delegation to see the then Commissioner for Regional Policy about this. When we explained the situation to him, he turned to his officials and asked in French, “Could this possibly be true?”. His officials confirmed that, yes, Brussels was passing the money over to the Treasury in London and it was not being passed to those areas that were entitled to get the funding. It was outrageous. To his credit, the Commissioner took the matter up with the then Chancellor of the Exchequer, Mr Gordon Brown, and in the financial review a few months later—in July 2000 or 2001, if I remember right—an adjustment was made of the £442 million that had come from Brussels which was meant for Wales but had not been passed over. How on earth can we be expected to have full confidence that London will step in and fill the breach when that has happened in the past? At the very least we should have an assessment made as to what the effects would be, not just in Wales but in the other areas that might be affected by this.
Amendment 29 moves on to the question of agriculture. Whatever the pros and cons in various parts of the United Kingdom of the common agricultural policy may be, the farming unions in Wales have no doubt whatever what the impact will be, as 80% of farm incomes in Wales are dependent on Brussels. Of course, we will be told, “Ah well, that will be made up for again”. Are we going to go back and have something like the Milk Marketing Board regime or the type of sheep meat regimes that we had prior to the European Union? So much of our market for sheep meat is in Europe and the dependency of sheep farmers in particular on the European Union is very considerable indeed. I am not saying that I know all the answers to these arguments—I do not—but the farmers and those in the universities and other sectors of the economy are entitled to know them. At the very least, clear and unbiased statements about the factual reality should be put out by a Government who have looked at both sides of the argument.
At present, Wales gets a net advantage of some £40 per head per annum from the European Union. It is not a tremendous sum but it is an advantage—other areas will no doubt have a disadvantage. People should know, to the best of our ability to tell them, what the effect of pulling out would be. That is the point of these amendments, which have the same objective as the earlier amendment that has been moved. I very much hope that the Government will give some firm commitment on these matters.
Lord Blencathra (Con)
My Lords, I will speak to my Amendment 27. I agree entirely with the noble Lord, Lord Hannay, that this group of amendments and the consequences of leaving or staying in are among the most important that we shall debate in this House. The noble Lord, Lord Hannay, has moved an amendment asking the Government to report on the possible consequences to the UK if we vote to leave. I believe it is equally important that we have an assessment of the likely consequences if we vote to stay in. Some might ask how one can report on that when one has no idea what the EU might agree to in a future treaty. That is true, but only to a certain extent. There is a track record here; the EU has a bit of form on this. It is not as if we have not been here before on numerous occasions.
In 1989 we had the Delors report, calling for full European integration. It was pooh-poohed by the UK Government and press as something that was never going to happen, but that ignored the inexorable drive to ever-closer union—though that was not the terminology then—that led to the Maastricht treaty. We got qualified majority voting and the start of interference in justice and home affairs measures, as well as a host of other unexpected consequences. Of course, the British people were given no say in a referendum. So we got the Delors report, warts and all.
About 10 years later, we had the Valéry Giscard d’Estaing grand report, the draft treaty establishing a constitution for Europe. This, again, was pooh-poohed by EU supporters as not being a radical change, and nothing to worry about. If I recall, the UK Government and press condemned it and said that it should not and would not happen. It was vetoed by France and then the EU did what it always does; it reintroduced it in slightly different clothes as the Lisbon treaty. Some 95% of the EU superstate constitution proposed by d’Estaing was incorporated into the Lisbon treaty and the name was changed from “constitution” in order to deceive the electors of Europe. Once again, the British electorate were given no say.
The point I am trying to make with these two examples is that that there is a track record of the EU taking ever more power from national Governments and vesting it in the Commission. Now we come to the core of my amendments, based on the five presidents’ report, published in June or July this year. If we say to the British people, “Look at this report; this is what you can expect if we stay in”, the response of the BSE campaign will be that it is just some vague suggestions; it may not happen and if it does, it will be years away and will apply only to the eurozone members in any case. In other words, these are the same lines we were spun about the Delors report and the d’Estaing report, but a few years later they became binding treaties.
Baroness Falkner of Margravine (LD)
The noble Lord might not know that this House’s EU financial affairs sub-committee is looking into the five presidents’ report. He might like to see the conclusions of that before he draws these conclusions here.
Lord Blencathra
I thank the noble Baroness. I would be delighted to see the conclusions of any of our august Select Committees. I was privileged to serve under the notable chairmanship of the noble Lord, Lord Hannay, for a while, but I am afraid that the conclusions that this House may draw as to what will happen to the five presidents’ report may not accord with the opinion of the five presidents—Jean-Claude Juncker, Donald Tusk, Jeroen Dijsselbloem, Mario Draghi and Martin Schulz. I am sure that the noble Baroness will show her conclusions to them; I only hope that they will pay some attention to some of them. My amendment does ask the Government to look at the five presidents’ report. My worry is that it is not a question of if some day it will happen but of when it will happen, because that is the track record of previous reports.
A key objective is EU representation on the IMF in place of nation states. Theoretically, the UK, not being part of the eurozone, would keep its seat and independent voice, but that is not the case. We might still have our seat but we would have to sing the EU tune. Under Article 34(2) of the Treaty of European Union, member states are required to,
“concert and keep the other Member States and the High Representative fully informed ... defend the positions and the interests of the Union, without prejudice to their responsibilities under the provisions of the United Nations Charter. When the Union has defined a position on a subject which is on the United Nations Security Council agenda, those Member States which sit on the Security Council shall”—
I thought it might continue with “obey”, but it is not quite that—
“request that the High Representative be invited to present the Union’s position”.
That is the position on the United Nations Security Council, where our independent voice now has to be somewhat muted to comply with the EU position. Exactly the same would apply to the IMF.
Lord Hannay of Chiswick
I am sorry to interrupt the noble Lord, but I think I might have been responsible for some of the language there and I have to tell him that it was explicitly put into the treaty to safeguard the British position as a permanent member of the Security Council. If he reads it carefully, he will see that we are under no obligation whatever to follow a European decision unless we participate in it ourselves, and these decisions are adopted by unanimity. The saving clause is that our responsibilities under the UN charter are preserved despite the move forward on common foreign and security policy. So I am sorry to say that this fox is just about as dead as it could be.
Lord Blencathra
I am grateful to the noble Lord, and of course I bow to his incredible knowledge of the workings not just of Europe but of the United Nations. Nevertheless, part of the treaty of the European Union has conditions asking all the contracting states, the members of the union, to concert with the EU high representative. That is not the position that we had 20 years ago, and it shows the inexorable move to the EU wanting to take more and more power. I give way to the noble Lord, Lord Kerr.
Lord Kerr of Kinlochard (CB)
I see this as quite a difficult amendment because it asks the Government to speculate. The amendment that the noble Lord, Lord Hannay, introduced a moment ago asks the Government to give information; this one is asking them to predict the future course of the European Union. Down the years men have dreamt dreams and had visions, and an awful lot of it has not happened.
The direction is not all one way. If the noble Lord, Lord Blencathra, looks very carefully at the draft constitutional treaty that was rejected by the French, for example, he will discover that it does not include any aspiration to ever-closer union. Does he really think that the French are about to give up their seat in the IMF or on the United Nations Security Council? Many think that there should be reform of the Security Council but the day that the French give up their seat, flying pigs will be seen over Whitehall.
Lord Blencathra
My Lords, that is the one safeguard we may have: the French will always want to retain their seat on the Security Council. I think that we can detect that the day the French wish to give that up, we can rest assured that the whole EU foreign policy will be dictated by the Élysée Palace. I also say to the noble Lord, Lord Kerr, that it is no more speculative to ask the Government to report on what is in my amendment than it is to ask them to report on, as subsection (2)(c) of the proposed new clause states,
“the rights, following withdrawal, of United Kingdom citizens living in another country”.
We have no idea what those rights may be. I do not think there is any EU law at the moment that says that the moment Britain or any other country withdraws, citizens living in that country will be immediately expelled or that conditions X, Y or Z would apply. It would be negotiated.
Lord Spicer
Is the answer to the intervention on my noble friend’s speech not that the factual evidence of things moving one way is the embedding in the treaty of the acquis communautaire, which insists legally that we move in one direction?
Lord Blencathra
I agree entirely with my noble friend. And it is one thing for a treaty to say something, but we know how the European Court interprets treaties—towards ever-closer union. I give way to the noble Lord, Lord Kerr.
Lord Kerr of Kinlochard
The noble Lord is very generous. Actually, the Government could publish what the effect would be on citizens’ rights of our leaving the European Union. It is completely clear what their rights would be: they would no longer be EU citizens. Therefore, British citizens resident abroad would no longer benefit from the right of being EU citizens. Similarly, of course, citizens from other EU countries in this country would no longer benefit from any rights that we chose not to confer on them. It would be for the Government to say what would be conferred. The principles of the negotiation with the EU—which would be with the EU collectively, not with individual member states—would be international law, not EU law, and reciprocity. It would be reasonable for the Government to tell us what they would be trying to secure for British citizens in EU countries in the knowledge that exactly the same rights, under reciprocity, would have to be granted to EU citizens living in our country.
Lord Blencathra
I think I detected a slight change in the noble Lord’s argument as he was talking. Of course, the Government could easily say that if we leave the EU we will no longer be EU citizens and 56 million people will say, “So what? What are the consequences of that?”. The noble Lord went on to say that the Government could then spell out what they would aim to achieve in any renegotiation of people’s rights, but that is speculative. That is the point I am making. Of course we can say that people will no longer be EU citizens, but we have no idea, if we were to stay in or leave the European Union, exactly what the rights negotiated by the British Government and EU countries would be. I do not want to get bogged down. I have perhaps given way too much to the noble Lord, Lord Kerr of Kinlochard, because I really like his accent.
Where the EU has a position under European law, we are under an obligation to co-operate with it and support it. For years we have watched the EU desperately trying to take over the negotiating positions of member states in all international fora. That is a trend. It has taken our place at the World Trade Organization. The result is that we have free trade agreements with little countries but nothing with the big power blocs that matter—nothing with the ASEAN countries, nothing with Japan, nothing with India, nothing with the Gulf Cooperation Council and nothing yet with the USA, although we are apparently close. These are all things that the UK could have negotiated years ago on its own.
Lord Wallace of Saltaire
I do not know whether the noble Lord reads the newspapers, but has he seen the recent speech by the US trade representative who said they would have no interest whatever in a separate trade negotiation with the UK?
Lord Blencathra
Absolutely. I saw that and one must distinguish between US political talk and UK factual reality.
Lord Dobbs
Does my noble friend not agree that officials and bureaucrats are there to do as they are instructed by their political masters, not to lay down the rules for everybody else?
Lord Blencathra
I have to agree with my noble friend. The United States will do what is in the financial interests of the United States and its companies. It may talk tough about not doing a trade deal with the sixth largest nation on earth—the United Kingdom—but, when it comes to pounds, shillings, pence and dollars, the Americans will trade when it is in their financial interest to do so.
Lord Hannay of Chiswick
Will the noble Lord consider carefully whether he is falling into the best-known trap for British commentators on American policy, which is to think that we know what American interests are better than they do? In fact, that statement last week was made by a member of President Obama’s Cabinet. I happened to be at a conference at the weekend at which people from both sides of the divide in the United States—in quite senior positions—made it clear that the policy reflected a cool and careful judgment of where the United States’ interest lay. If we choose to ignore it, we do so at our peril.
Lord Blencathra
My Lords, I am not suggesting we ignore it but I am suggesting that we analyse it and possibly take it with a pinch of salt.
Lord Lawson of Blaby (Con)
Does my noble friend not agree that the position of the United States seems clear? There is a great deal of anti-Americanism in many parts of the European Union, including in France, where I live. The Americans see us as the most pro-American member of the European Union, therefore they are desperately keen that we should remain within it. If I were an American, I think I would take the same view but it does not mean that, because it is in the interests of the United States, it is necessarily the right thing for this country.
Lord Blencathra
I thank my noble friend for his intervention. He has considerable experience in these matters and I agree with him entirely.
To conclude, we need the Government’s forecasts of the competitive position of the UK if we stay in, tied to a European economy that is becoming progressively uncompetitive in world markets. We know Herr Juncker wants more Europe and more of the social dimension, as he said to the European Parliament. That would be all very well if the USA, China and the Asian economies were also awarding themselves more pensions, more paternity leave, shorter working weeks, higher pay and more social benefits, but they are not and Europe is in slow decline against their economies.
Lord Liddle
Has not what the noble Lord just said shown the need for an objective analysis of the facts? Britain has a trade deficit of something between 5% and 6% of GDP, whereas the euro area has, I think, a small trade surplus with the rest of the world. Germany and the Netherlands have massive trade surpluses. Frankly, what the noble Lord is saying is nonsense.
Lord Blencathra
I thank the noble Lord for his support. We need a factual analysis of a whole range of things. However, I merely suggest to the Committee that if the Government are tempted to accept the amendment of the noble Lord, Lord Hannay, or a similar one, on producing a report on the consequences of leaving the EU—some of that would be speculative, as I have attempted to suggest—we also need a report on the consequences of staying in. In many ways that would be equally speculative, although no more so than the outcome of the amendment of the noble Lord, Lord Hannay. Therefore, we must have the Government’s analysis of the consequences for the UK if that decline in the European economy continues.
The five presidents’ report envisages competitiveness authorities taking over wage and work conditions. I will not quote from the Commission press release of 21 October, but it talks about deepening the EMU, getting social fairness and paying greater attention to new macroeconomic adjustment programmes, as it did in Greece. We all know that worked very well. Therefore, we need the Government’s view on that aspect of the report.
The report goes on to say that we need adequate access to,
“adequate education and … an effective social protection system … in place to protect the most vulnerable in society, including a ‘social protection floor’”.
I therefore suggest that we need a UK government analysis of the consequences of those proposals when they are incorporated into a treaty. It is no good for the BSE campaigners to say that they will apply to eurozone countries only. The Commission will use the excuse, justification and treaty base of the single market, as it usually does, to make them apply to us, and we will not be able to stop it since the eurozone countries will have an in-built majority.
Baroness Falkner of Margravine
I declare that I am currently chairing the inquiry into the five presidents’ report, which I mentioned. The noble Lord is misrepresenting the black ink on white paper in that report. They are national competitiveness authorities for the eurozone; they do not apply to the eurozone-outs. However, I will give the noble Lord a broader point: he is asking the Government to produce their assessment of this. The Government will respond to the Select Committee’s report—it is just a matter of time. His amendment is more or less redundant, given the information I have just laid before the Committee.
Lord Blencathra
The Government will respond to the Select Committee’s report, but that is different from an analysis of what the situation would be in this country if it were to take place. There may be similarities in the report we would make, but we still need that analysis of staying in the European Union.
I am almost concluded, noble Lords will be pleased to hear; at least I have provoked a bit of controversy in this debate. The five presidents’ report also talks about harmonising insolvency law, company law and property rights. We need an analysis of the dangers of that point.
In his speech two weeks ago, the Governor of the Bank of England noted that being in the EU had benefited us in the past. However, in the referendum we will be voting not on the EU’s past record but on what it will do for us in the future. What was most interesting in Mr Carney’s speech was the clear warning over further eurozone integration and its impact on the UK economy. He noted that the five presidents’ report states that there is “unfinished business” over further fiscal and financial integration in the euro area. The Bank’s report cautioned that the “necessary deepening” of integration, coupled with the,
“weight of … the members of the single currency”,
would impair the ability of the Bank to,
“meet its financial stability objective”.
I trust that the noble Baroness will question the Governor of the Bank of England on that statement in the Bank’s report. I look forward to reading the analysis.
Lord Liddle
As I understand it, the Chancellor of the Exchequer is going to Berlin today to explain that Britain supports this increased integration in the euro area because we have a strong national interest in the eurozone being an area of more dynamic growth. I just do not understand where the noble Lord is coming from, because his own leadership is arguing for this integration.
Lord Blencathra
The leadership is entitled to do so. The Prime Minister and the Chancellor are negotiating hard for changes on behalf of the British people and the country. When the Government set out the deal they achieve, if the amendment of the noble Lord, Lord Hannay, is accepted and the Government set out the consequences of leaving, my amendment merely suggests that they should also set out as far as they can the consequences of staying in.
My very final point is that the EU has made it clear that there will be no treaty change before 2017 and possibly not before 2020. In that case, I should like to know how the Government will guarantee that the deal that the Prime Minister brings back will be incorporated into a binding treaty change. Any promises not in a treaty are not worth the wasted breath, in my opinion. So I want to see a section in the government report explaining how we can guarantee that we will actually get the changes that the Prime Minister secures.
I am sorry that I have taken so long. Again, I agree with the noble Lord, Lord Hannay. His amendment is important. I think that all the amendments in this area are important, and I look forward to hearing the Minister’s response.
Lord Green of Deddington
I shall describe Amendments 31 and 32, which stand in my name. In the earlier amendments in this group the Government are asked to set out the consequences of leaving the EU, and, as the noble Lord, Lord Blencathra, said, it is only right and fair that they should set out the consequences of staying in. In my amendments I have selected two issues which I believe are likely to be extremely important to the public in general in reaching a decision on how to vote.
Amendment 31 addresses net migration, which, as most noble Lords will be aware, is about 330,000 a year. Of that figure, more than half—180,000, a number that has doubled in the last two years—are from the European Union. That figure is split more or less equally between the EU 14 and the new members in the A10. How that advances in the future, of course, depends on the economic developments in those two regions, but I think that the figures are likely to remain high unless something is done to reduce the level of low-skilled immigration from the European Union.
As noble Lords may know, 75% of immigration from the A10 and 25% of immigration from the EU 14 is low skilled, or certainly low paid, so there ought to be some scope there and the Government need to set out the effect on that low-paid immigration of their negotiations with the European Union. It is not just a matter of a large number of low-paid migrants without, at present, any break or limit on their numbers; what are important are the implications of the impact on the population of the UK, which will be huge. Noble Lords will have seen this very week the latest population projections prepared by the ONS. Based on net migration of 185,000 a year, it has told us that the population will increase by 2.5 million—more than twice the population of Birmingham—in the next five years and by nearly 10 million in 25 years’ time. Even that projection is based on some very optimistic numbers. The ONS thinks that immigration will be about 185,000 per year going forward, but the average over the last 10 years has been 240,000 and the current level is 330,000.Therefore, there will be a huge impact on the population, and, by the way, the same document shows that just over two-thirds of the future population increase will be as a result of immigration.
Lord Liddle
Is the noble Lord claiming that the extra population of 10 million will be due to EU migration? It seems to me that that is not the case: he is muddling together EU migration and migration from the rest of the world. Given that much EU migration involves young single people, does he think that in time the impact on the population from those people, some of whom may well go back to their own countries, is likely to be as significant as the impact from non-EU migration?
Lord Green of Deddington
I mentioned earlier that more than half the intake—180,000—is from the European Union. The population increase over a 25-year period includes two things: the migrants and their future children, as well as the growth of the population already here. Over the long term, all population increase in the UK is a result of immigration; over the medium term, it is two-thirds. I am not suggesting that all immigration is from the European Union—it clearly is not—but it is a major factor; it is half of it. I am perfectly sure that, when it comes to the referendum, the public will want to know whether it will be possible to restrain the growth of the UK’s population from whatever cause. The present position is that there are things that can be done in respect of non-EU migration—there has been some very limited success on that front—but nothing can be done in respect of EU migration. The amendment therefore calls for a factual report from the Government as to what might be expected, what the effect of their negotiation has been and what the impact will be on population.
My second amendment, Amendment 32, addresses the present refugee crisis and its consequences—an extremely sensitive and difficult area which is almost certain to continue well into the referendum period. For the time being, we are largely insulated—we are not members of Schengen and we have no land borders—but most of those now arriving are likely to qualify for EU citizenship in a period of between five and eight years, depending which country they settle in. After that, they will have free movement to the UK. In addition to that, and it is not widely understood, one person who is an EU citizen can bring his full family to the UK and elsewhere, whether or not they themselves are EU citizens. We therefore need an assessment from the Government of what is involved here. There will clearly be consequences for net migration, for population, for public services and for social cohesion. These two issues are a very important consequence of staying in and they should certainly be reported on.
Finally, I want to inform the Committee that I intend to make two changes to the amendments that I proposed last Wednesday. The first is to remove any reference to Irish voters lest this fall foul of the Belfast agreement, as the noble Lord, Lord Davies of Stamford, pointed out and, I think, the noble Lord, Lord Hannay, as well. The second is to introduce what might be called a “sunrise clause”, so that the amendment would take effect only from 1 January 2017. That deals with the point raised by the noble Lord, Lord Wallace of Saltaire, about the practical difficulties of changing the electoral register in time. As your Lordships probably know, EU citizens are marked on the electoral register; Commonwealth citizens are not. The sunrise clause has the additional advantage that it provides to Commonwealth citizens the opportunity to seek British citizenship if they should so decide. The next version of the amendments will deal with the points raised by noble Lords.
Lord Bowness
My Lords, I shall speak in favour of Amendment 21, to which I added my name and which stands in the name of the noble Lord, Lord Hannay of Chiswick. As this debate has progressed today, it has underlined the need for the kind of reports that we ask for in the amendment. It is of enormous importance that there be a point of reference where voters can see the implications of the decision they are being asked to make, whether that decision is to remain in the European Union or to leave it. It is my hope, although I appreciate that we are asking my noble friend on the Front Bench to accomplish something extremely difficult, that we will be able to find a form of words which is acceptable to both sides of argument as we have heard it articulated during the afternoon. I hope that the areas where information is needed can probably be agreed. They may be surprised and may not wish me to say it, but I think that common threads run through Amendment 21, which I support, and Amendment 27 put forward by my noble friends Lord Blencathra, Lord Hamilton of Epsom and Lord Flight.
Of course, I think I know what my noble friends hope the outcome of the referendum vote will be, and they probably suspect what I hope the outcome will be. Indeed, I have been clear about what I hope the outcome will be. It is probably the opposite of what I suspect they want it to be. However, the report that we are calling for should not lead voters one way or the other. That is for the in/out campaigns, between which we have heard some preliminary skirmishes this afternoon. Those campaigns will be coloured by rhetoric and a selective use of facts—hence the need for an effective report on the consequences of withdrawal, covering a wide area. The report must highlight the changes that will flow from an in or an out decision, and without comment.
I dare say that I might be appalled by the conclusions. Others will be delighted, but that is for the individual to decide and for their own reaction to the factors laid out. It is for the Government to lay out the facts. In some areas, there may not be an immediate change, as many if not all the European directives and regulations have been incorporated into our domestic law. I do not know how that situation will be dealt with or how quickly it could be dealt with. Will it be by piecemeal repeals and replacements, or by some big bang like repealing the European Communities Act 1972? Other prospective changes may be dependent on the outcome of the exit negotiations.
I do not want to trespass into Amendment 24 in the name of the noble Lord, Lord Kerr of Kinlochard, and if I do so I apologise; I will not take the time of the Committee when we reach that amendment by intervening. I believe that the report that we are asking the Government to provide must spell out to the citizens of the United Kingdom that the changes that we seek in exit negotiations, if that is where we get to, are not a fait accompli. They are not ours to demand. We cannot assume that all the other 27 states will agree. It will be for the 27 to decide and agree, and we do not have a vote in that.
I support the thrust of the amendment and hope that the Government will find it possible to enter into discussions before Report on a formula for the report to cover unbiased, informative and complete information, which citizens will require to enable them to make their choice.
Lord Wallace of Saltaire
My Lords, perhaps as two of the amendments mention the EU balance of competences review, I might be allowed to comment on the extent to which the 32 reports that that review produced over two years in four tranches have provided a solid basis of evidence for a rather more dispassionate result. I am well aware that at the time of the 2010 coalition agreement, some in the Conservative Party thought that inviting evidence from stakeholders in law, business, the economy, aviation, and so on, would provide the basis to ask for repatriation of powers, which those various stakeholders felt were already excessively transferred to Brussels.
The outcome of the 32 reports, which I warmly recommend to the noble Lord, Lord Hamilton of Epsom, as evening reading over the next six months, was an overwhelming conclusion from most of the 2,500 pieces of evidence that came in that the current balance of competences suits us fairly well. That is part of the reason why people in No. 10’s press office and others wanted to ensure that the reports were published the day after Parliament rose for the summer or for Christmas so that they would receive as little publicity as possible, but they are there.
I particularly recommend to the noble Lord, Lord Hamilton, the report on criminal justice co-operation and the evidence from the Association of Chief Police Officers and various other bodies on why the current arrangements are so strongly to Britain’s advantage. I also recommend the report on co-operation in civil justice, which contains evidence from the Faculty of Advocates in Scotland and the Law Society.
Lord Hamilton of Epsom
I am very grateful to the noble Lord for telling me what my reading should be, but can he explain why the existing arrangements cannot continue just because we vote to pull out of the EU?
Lord Wallace of Saltaire
My Lords, I think the noble Lord wants to negotiate that we should have a special status and be able to pick those things that we want and say no to those that we do not. However, all international multilateral negotiations are trade-offs and it is not always easy to get exactly the arrangements that you want. There are those who would argue—as I think the noble Lord, Lord Blencathra, would—that much of what is currently imposed on us is a conspiracy cooked up by people in Brussels. I am merely saying that we need to get hold of the evidence of where we are and what are the costs and benefits of a whole set of very complicated international regulations in a highly internationalised economy and a world where the number of British citizens who cross the channel each year has increased by a factor of 10 over the past 30 years. That has certain implications for policing, crime and all sorts of other things.
Lord Forsyth of Drumlean (Con)
My Lords, I apologise to the Committee for being late to our proceedings. British Airways cancelled my flight so I drove down from Scotland.
The noble Lord, Lord Wallace, has the advantage that he has read this competence review. Can he therefore explain why, for example, it is necessary that the guarantee on people’s money held on deposit in this country, which previously stood at £85,000, has to be reduced to £75,000 because the euro has fallen in value? Surely that should not be decided at a European level.
Lord Wallace of Saltaire
My Lords, politics is precisely about the level at which a whole set of decisions are taken. Until the mid-1980s, when Margaret Thatcher launched the single market initiative, international regulations were largely American decisions on standardisation which others—such as ourselves, the Germans and the French—had to accept. Now, these regulations are often negotiated at EU level and then, in turn, negotiated with the United States. The various reports go into some detail on the advantages and disadvantages of acting at the national, subnational, European and global levels. That is part of what happens across the world. I merely point out that some of this analysis has been done. It is extremely important that, as the debate continues, there should be further analysis.
Lord Forsyth of Drumlean
Before we leave that point, is the noble Lord seriously arguing that a Government who guarantee through a guarantee scheme in this country deposits put by pensioners in their banks should be left powerless to decide the level of guarantee; and that the review of competences, if it allowed for that, was in any way competent?
Lord Wallace of Saltaire
The noble Lord may not have noticed that banking has become a little less national and a little more international over the past 40 years. That is part of the reason why the negotiations over the amount of bank reserves have taken place. That matter has been negotiated for the past 100 years through the Bank for International Settlement and a range of other bodies. Since modern banking developed, there has always been a range of international agreements on aspects of banking, although not in so much detail.
A small number of think tanks have provided some valuable advice. I have great respect for Open Europe, a largely Eurosceptic think tank in origin but which respects the evidence it finds and produces worthwhile reports. Similarly, I have great respect for the Centre for European Reform. There are others on both sides that are less reliable. I say to the noble Lord, Lord Green of Deddington, that Migration Watch stands out by the careful way in which it tries to find out the most accurate figures. That is highly desirable. We need accurate figures. The question of what is happening on immigration to this country—how much is long term and how much is short term, in the case of Spanish and Portuguese workers here who may go back when their economies recover—gets us into the range of speculation, but at least we know where we are at present. That is what we need for this debate. It is not easy. We know that there are conspiracy theorists all round. There are great fears about what might happen. However, dispassionate analysis and evidence, where we can find it, are essential to intelligent debate, and that is what the amendments of the noble Lord, Lord Hannay, and others are about.
Lord Grocott
My Lords, I am sure the noble Lord, Lord Wallace, will agree that it is essential to any dispassionate debate—if such a thing is possible—that both sides of the argument should be presented. All the amendments in this group are of a similar character—they all seek further information to present to the British public before the British public make a very important decision. I do not have a problem with any of the amendments because I am in favour of the British people having all possible information. I would like them to have even more information, were it possible.
I cannot find a way of tabling an amendment on this subject that would be in order, but I would love the British people to be able to consider—on the principle that it is better to look in the history book than in the crystal ball—the last time that a major decision in relation to the European Union was made in this country, which was when we decided not to join the euro. I think that that was a splendid decision by the last Labour Government. They went to some lengths to present to the British people the facts of the arguments of those who were in favour of Britain joining the euro as well as the facts as to whether the forebodings of their prophets of doom came into being. I remember that there were all sorts of arguments about the collapse of inward investment into Britain should we not join the euro, and so on. However, that point is out of order so I shall not speak to it at length.
The only problem I have with these amendments—it was part of my interventions on the noble Lord, Lord Hannay, although it does not, in my book, disqualify the amendments—is that I have considerable doubts that I could say that the word “objective” is a characteristic of every amendment in this group. By way of illustration I will refer again to the common agricultural policy. I mentioned the amendment in the name of the noble Lord—I was about to call him my noble friend, although he is not far off—Lord Wigley, with whom I agree on so many things. I agree with him very much that it is extremely important that there should be support for British agriculture in difficult terrain such as north Wales. The noble Lord knows far more about that than I do, but it is extremely important that there is support for that economic activity in our country. However, if we are to have a report on the consequences of coming out of the common agricultural policy, do we or do we not include the presumption—and only a fair-minded person would have to make this presumption—that some of the moneys currently spent by the British taxpayer on the common agricultural policy should be spent directly on British agriculture by the British Treasury?
Lord Wigley
That is, indeed, a central question. However, it is not a matter on which we should make an assumption. We should be told whether or not that will be the case.
Lord Grocott
It would be fine if that happened, but the figures are worth reflecting on. I find it difficult to imagine that the contribution to British agriculture would be less than it is currently via the common agricultural policy. I took the precaution of getting an up-to-date figure—I assume that responses from Ministers are accurate on these matters. I asked the Government two or three weeks ago what the current cost of the common agricultural policy was and the answer from the noble Lord, Lord Gardiner of Kimble, was €55 billion for 2015. He went on to say that the CAP accounts for 40% of the EU budget.
Noble Lords who regularly contribute to economic debates—which I do not—will be able to do these figures in their heads. However, €55 billion is the total cost of the CAP. That represents 40% of the EU budget. The UK contribution to the EU budget as a whole is €16 billion. Let us work that out. Off the top of my head, I think the British contribution to the cost of the common agricultural policy is 2 billion or 3 billion euros. I repeat that I have doubts about the use of the word “objective” in this kind of discussion, but it seems that anyone considering this objectively would have to consider that a very substantial contribution to agriculture—that vital industry in this country—would have to come from the British Exchequer if there were less support coming via our contributions to the CAP.
Lord Davies of Stamford (Lab)
My noble friend asked rhetorically whether there was any reason to suppose that, if we came out of the EU, our level of support to our agricultural sector as a separate country would be any less than it currently is within the EU. I put it to him that there is one obvious ground on which one might expect that our support to agriculture would be much less if we were outside the EU. The political weighting of the agricultural sector’s interest is markedly less in this country than on the continent, in the Republic of Ireland or in other EU member states. If the noble Lord goes to Ireland, Germany, the Netherlands or France—let alone Poland or Romania—he will be able to satisfy himself of that. We have one of the very lowest proportions of population—which of course means voters—who are directly dependent on the agricultural sector: about 1%. That means that the political balance is very different here when agricultural matters are discussed from how it is on the continent, where there is much more political weight behind agriculture. Inevitably that will be reflected in the amount of money coming through to agriculture and in the willingness of the Treasury to continue to support agriculture at the current level, which is based on the aggregate weight of agricultural interests in the European Union as a whole and not on their weight within this country in terms of domestic and political debate.
Lord Grocott
My noble friend makes my point very effectively: these are matters of debate. There is no objective analysis of the cost of the CAP and the likely expenditure in the UK that can be resolved by putting statistics into a computer. He makes a perfectly valid argument from his own perspective.
I am tempted to go down memory lane. Believe it or not—this may come as some surprise to the House—40 years ago, in 1975, I would occasionally go to meetings of the Agriculture Ministers of the European Union, in my lowly capacity as a Parliamentary Private Secretary. I have to say that the conclusions reached by the Council of Ministers at the time were not always in Britain’s interests.
However, let us not go down that road, because I am not disagreeing with my noble friend. These are not matters of fact but matters of judgment. Part of the judgment might be whether—
Lord Hannay of Chiswick
I am grateful to the noble Lord for giving way. All afternoon, he has been making a very persistent effort to draw our discussion on to grounds that are not covered by the amendments. If he reads the amendments carefully, he will see that nobody is suggesting that the Government should be asked to quantify the support it would give to agriculture after we withdrew. They are being asked to state, purely as a matter of fact, what the consequences would be—statutory and legislative—if we ceased to be in the European Union and ceased to have the common agricultural policy applied to us. That information can be provided factually: so much in structural support, so much in market support, and so on. These facts are all to be found in the budget of the European Union. The amendments I have tabled do not ask the Government to speculate on other matters, although they do ask the Government to say what would be needed by way of legislation to fill that gap.
Lord Grocott
I am afraid that the noble Lord, Lord Hannay, has a different reading of the amendments from mine. Amendment 29, in the name of my noble friend Lord Wigley, inserts a clause that states:
“No later than 12 weeks prior to the appointed date of the referendum, the Secretary of State shall publish, and lay before each House of Parliament, a report on the consequences of withdrawal from the European Union on the provision of financial support for agriculture in each region of the United Kingdom”.
Presumably he is saying that no part of that consideration would take account of the support, if any, to be given to agriculture in the event of our not being in the European Union. My contention is that undoubtedly there would be support for agriculture should we not be a member of the European Union. That is why my comments are entirely relevant to these amendments—and certainly to that one.
In any event, my broad point is that any discussion of this sort inevitably goes beyond dry legal jargon. It ends with a matter of judgment at some point, as do nearly all matters of foreign policy—if I am allowed to refer to relations with the European Union as matters of foreign policy. The noble Lord, Lord Hannay, knows that better than most of us. It seems to me that we either support all of these amendments or none, but we do it with the acknowledgment that they will not solve the problem for anyone. At the end of the day, people will still have to make their own judgments.
Lord Dobbs
My Lords, the noble Lord, Lord Wigley, said that he could not see how any reasonable person could possibly object to these amendments. I hope that I will be able to open his eyes just a little. We have already heard, even in the extended debate on this proposal, just how easy it is to slip into outright campaigning. It seems to be impossible to separate the facts from the campaigning. They say that there are facts, political facts and campaigning manifestos. I happen to have written a few campaigning manifestos in my time. I know what wicked statements they are, and I am very glad that I have left all that behind me and now simply write works of fiction.
The amendments of the noble Lords, Lord Hannay and Lord Blencathra, and others call for an official report—but could any official report ever be worth the paper it was printed on? For instance, an official report at the start of this year that talked about immigration policy in Europe would not have known how events were going to impact on it, and would presumably have looked totally different six months later. The noble Lords, Lord Wigley and Lord Hannay, ask us to gaze into the future of agricultural policy. What will happen if we vote to leave? It depends who is making those decisions after we leave. You do not have to be a political seer to suggest that there is a strong possibility that, if we decide to leave the EU, we will not even know who is going to be Prime Minister six months after that vote. That is the political reality.
Lord Wigley
Does the noble Lord not accept that the Prime Minister himself, when he comes to a judgment on whether to recommend the package he will have renegotiated, will be making some assessments—presumably quantifiable—of the implications of that renegotiation? Is it not reasonable that those who are asked to vote on this have as much information as possible?
Lord Dobbs
I agree entirely with the noble Lord that they should have as much information as possible. However, as well as known unknowns there are also unknown unknowns—as someone once said—which are completely dominant in this area. As far as the EU is concerned, it is the unknown unknowns that have come to the fore and gained strength in recent months and years.
Lord Forsyth of Drumlean
I am most grateful to my noble friend. When he looks at these amendments, does he not think it quite revealing that the Euro-enthusiasts in this House want a report on the perils of leaving and not on the benefits of staying in?
Lord Dobbs
Indeed. However, as I made clear in my statements at Second Reading, I personally—
Lord Bowness
When my noble friend Lord Dobbs replies to my noble friend Lord Forsyth, will he note from me—presumably bracketed among the Euro-enthusiasts—that the reports are not about the perils? The request is for a statement of fact on the consequences of a decision to leave. That is what is being asked for, and indeed I would oppose any suggestion that the report should comment one way or the other, but unless people know about the consequences of leaving, how can they make up their minds?
Lord Dobbs
Getting stuck between my two noble friends is a perilous position. As I made clear at Second Reading, I hope very much that the Prime Minister can bring back the reforms which will enable me to vote for and support him in continuing within the European Union. I do not adhere to my noble friend’s position where he will vote to stay in no matter what or that of the position of the noble Lord, which I suspect is that he will probably vote “out” no matter what.
Noble Lords have asked for a factual report. It is worth reminding ourselves of what happened in 1975 when a White Paper was produced. I know that the noble Lord, Lord Hannay, is probably not asking for the exactly the same sort of operation, but there was a White Paper, and of course it was huge. What the noble Lord and other noble Lords are asking for is a huge amount of work to be done, which will have to be distilled into something more manageable and digestible for public consumption. I have with me the 1975 version and I have to say that it is laughable in its simplicity and its paean of praise. There is very little that is truly objective about it. That indicates to me that it is impossible for anyone, let alone poor beleaguered officials, to come up with something that is going to satisfy everybody. I will not quote from the pamphlet because we do not need to delay ourselves.
Of course we need information. We need as much information as possible in the form of views, predictions and analysis, but that is surely the stuff of the campaign itself. It is the substance of the campaign, not that of some poor, hard-pressed official’s work that will never satisfy either side. These are issues which need to be argued in public with both sides in full cry. As I say, I am afraid that I have no faith in anyone’s ability to produce a report that will satisfy both sides of the equation. It will be no more than a fig-leaf on a very windy day and not worth the paper it would be written on.
Baroness Royall of Blaisdon
My Lords, surprisingly, I agree with the spirit of both sets of amendments because, as the noble Lord, Lord Dobbs, says, it is important that the people of our country have access to as much factual information as possible. Where I disagree with the noble Lord is that he says that it is up to the two campaigns to put forward the information. The information put forward by each campaign is bound to be biased because they are campaigning organisations. I would ask for a White Paper, and I think that the Minister herself mentioned a White Paper in our debate at Second Reading. I think it is imperative that the Government should themselves produce unbiased, factual information on which the people of this country can make their decisions. Of course the information provided by the campaigns will be of the utmost importance, but it is bound to be biased.
Lord Hamilton of Epsom
At the moment it seems as if the Government are going to be campaigning for us to stay in the EU. Why would any report they produce be unbiased?
Baroness Royall of Blaisdon
There is the political Government, but I believe that the civil servants of our country—there are eminent former civil servants around this House—can produce unbiased information if required to do so by the Government. Civil Servants per se are able to produce unbiased information, as the noble Lord, Lord Kerr, is acknowledging. I think it is imperative that this should be done.
I want to come back to one issue that was brought up by the noble Lord, Lord Green. Of course I understand people’s fears and concerns about freedom of movement and I understand what he has said about refugees. However, personally, I deeply regret the fact that refugees and the refugee crisis are being brought into this argument. The facts show for themselves that at the moment most refugees wish to go to Germany and Sweden. They are learning the language—it is a prerequisite when they get there; they have to do that—they will have jobs, and I am sure that the majority of them will stay in those countries. But the fact is that these people are fleeing from areas of conflict. People are on the move going from south to north, and they will keep on being on the move until we resolve the conflicts and invest in the regions of the south. I do not think that what is happening with the refugee crisis should have anything to do with the referendum campaign.
Lord Green of Deddington
My point is not actually about refugees because in seven years’ time they will not be refugees, they will be citizens of the European Union. Therefore the issue that may be in the minds of the electorate, at least, are the implications for us in the future if the European Union has lost control of its southern borders and if the chaos in the Middle East continues, which is quite likely. I am not talking about refugees. There is a lot to be said about them, but in this context we need to have our eyes wide open, and in so far as we can provide some guidance to the public, we should cover this issue.
Baroness Royall of Blaisdon
My Lords, I understand what the noble Lord is saying, but I think we are muddying our feet and that we are in very dangerous waters when we go into these places. By raising these issues we are stoking people’s fears about refugees, and that is not a proper thing to do. At some stage we should discuss these things in more depth rather than in this sort of debate, but I think that it is a very dangerous way forward.
Lord Stoddart of Swindon (Ind Lab)
My Lords, I have been listening to this debate all afternoon and I find it very interesting indeed. I also realise that all the amendments are well meant, but I think that the noble Baroness, Lady Royall, has hit the nail on the head. What she wants is unbiased information, and she believes that you cannot get it from the Government because they are in fact biased. I say that because the Prime Minister has just been to Iceland where he made his position perfectly clear, which is that he wishes to remain in the EU. He believes that it is the best thing for Britain to do, so he has made his position absolutely clear. How can the Government be unbiased? The noble Baroness said that we have civil servants and they will be unbiased. Civil servants are never unbiased; they take their lead from the boss, as in fact they should. Knowing that the Prime Minister has gone abroad and said that he believes that the United Kingdom should remain in the EU come what may will condition whatever is put into these reports. We should make no mistake about that.
Lord Wallace of Saltaire
Would the noble Lord allow for the possibility that the Prime Minister might have reached the position he now holds because of his concept of the British national interest and his position as Prime Minister in trying to define that national interest?
Lord Stoddart of Swindon
Yes, I believe that the Prime Minister believes that, but the British national interest cannot be served in the European Union. That is because the European Union is exactly what it says it is and what it wants to become. It has been made perfectly clear by unelected officials and indeed by elected people that they want further integration. However the Prime Minister tries, he will never be able to join a full Union unless he is prepared to agree to more integration, and that of course will also mean joining the euro. Further integration must include the euro and anyone who wishes to be part of further integration will have to join it or else leave or become some sort of associate member. Those are the facts and we should not try to deny them.
Lord Hamilton of Epsom
The noble Lord, Lord Stoddart, mentioned South Korea, which has indeed been a great economic success. It is interesting that it has signed a free trade treaty with the European Union. If South Korea can do that, why cannot we?
Lord Stoddart of Swindon
If the European Union did not sign a treaty with us but put restrictions on trade, it would be very much the loser. We are trading with the European Union at the moment on the basis of a deficit of £70 billion a year. Why would Europe not want to trade with us? It traded with us before we joined, when 35% of our exports went to Europe. Why on earth would the European Union wish to stop trading with us? Of course it would not. That is nonsense and I wish people would stop talking about these 3,500,000 jobs which are going to be lost.
Lord Flight
I thank the noble Lord for giving way. I suggest to him that this lost confidence is in reality merely a scare campaign by the yes vote. There is no evidence that this country has lost confidence in looking after its own interests. It has emerged as the most successful economy of the past four or five years. It is no more than a scaremongering tactic; it is not true.
Lord Stoddart of Swindon
The noble Lord is absolutely right. As I have said before, I believe this country would thrive outside the European Union.
Lastly, I want to comment on the American official, whoever he was, who said that it would be grave from the point of view of America and its relations with this country if we left the EU. Of course that is American policy for two reasons. One is that America is scared that the European Union will succeed. It knows that most countries are anti-American so it wants a friend in sight. The other is that America does not really believe that Britain should shine in the world because the American interest is paramount under any circumstances.
Lord Tugendhat
The official concerned was the United States Trade Representative. I think we ought to assume that the United States Trade Representative is able to speak for the United States in trade matters and surely the point he was making was a very different one. Signing free trade agreements for the United States is a very complicated matter. It involves an infinite amount of politicking in Congress and it is very difficult to carry through. Therefore, from the point of view of the United States it is better to be able to sign trade agreements with very large units where there is a good deal to offer both ways rather than with relatively small units. That is the point he was making and, given that he speaks for the United States in trade matters, one should not be quite as dismissive as the noble Lord has been.
Lord Stoddart of Swindon
I was not being dismissive. I understand the point of view of the United States and of other countries. The problem is that they want huge agglomerates to discuss and decide matters and I believe that there will be a loss of democracy under those circumstances. I may be wrong but in any event the Americans will still want our whisky and we will still want their awful films so trade will go on.
I want to finish with a quote:
“The European Union faces long-term economic decline and the ‘love affair’ of integration is at risk”.
Who said that? Not me. It was Jean-Claude Juncker, the President of the European Commission.
Lord Higgins (Con)
My Lords, I have listened throughout the debate and I remain a little puzzled. A number of possible reports have been proposed but no one has made it clear at which audience the reports are intended to be directed. I suspect very strongly that, even if all these reports were published, the percentage of those voting in the referendum who will have read any of them will be a tiny fraction. Therefore one is bound to ask: at who else are these reports to be directed? They may well be very useful for Members of Parliament but it is unlikely that any of them is going to change our views very significantly at this stage.
To take up the point made by the noble Lord, Lord Green, I think it would be helpful if we had more information. I agree entirely with the noble Baroness, Lady Royall, about the problem of asylum seekers. There is great movement at present not only of asylum seekers but also of migrants. As the noble Lord, Lord Green, pointed out, very complicated issues are arising about the effect on the population and the way in which those coming to the country may eventually become full citizens. I think he is right about that but none the less I am very doubtful whether the various reports which we will consider will have much effect on those voting, even if we include 16 year-olds, but I look forward to hearing the view of the Front Benches on this issue.
Because this is an advisory referendum not a binding referendum, as the note from the House of Commons Library makes very clear, we may find ourselves with a somewhat inconclusive result, in terms of both turnout and the majority. In those circumstances the matter may well have to go back to Parliament and these reports may be very useful in that context, so I am in favour of the reports but we need to be clear what their purpose is.
Lord Hannay of Chiswick
My Lords, I hope that I may put this point to the noble Lord. All the opinion polling that has gone on in recent months has shown that the people who have made up their minds already are a relatively small proportion on both sides, and that a very substantial number of people have neither made up their minds or believe that they have yet been provided with sufficient factual information to enable them to do so. I do not believe that we should surrender to the sort of cynicism which has percolated through this debate whereby it has been questioned whether providing factual information will be of any use at all, will be read by anyone at all or will be unbiased, et cetera. The purpose of these amendments, which were carefully drafted so as not to stray into the realm of advocacy, is to try to fill a gap which I would have thought all the objective evidence shows exists and needs to be filled. I hope that the Minister, who has listened extremely patiently through this long debate, will see her way to moving ahead in a direction whereby help can be provided by giving factual information which would enable people to make up their own minds.
Lord Higgins
I entirely agree with the noble Lord that it is helpful to have more information; that is entirely common ground between us. I merely said that I thought it would be rather naive, for want of a better expression, to suppose that these reports would be read by more than a tiny percentage of the people voting. They may be taken up in the press, of course, and get somewhat wider dissemination, and that would be useful. I am merely saying that we should not exaggerate the effect on the people voting. However, the reports may have a useful purpose in the mean time and perhaps in the longer term.
Lord Judd (Lab)
My Lords, I have listened to this debate with fascination. It is, of course, crucial. It raises huge issues and takes us right back to the origins of the move towards having a referendum at all. In the end, what we need in this country is leadership and people who stand up for what they believe in and argue for it. This vision of nurturing an imaginary world in which somehow the provision of passive, impartial information will enable people to make up their minds is naive, as has been said. What enables people to make up their minds is an argument of real substance adduced with passion and conviction. That is the issue.
I am very glad that the noble Lord, Lord Hannay, has given us an opportunity to have this debate although I have slight anxieties about how you can spell out the consequences of this situation. That seems to me a very absolute understanding of how human affairs are conducted. I do not know that you can say what the consequences are. However, you can say what the implications are and they can be well argued and substantiated, and a report of that kind would be helpful.
Having had the privilege to serve on the home affairs sub-committee of the European Union Committee, I know that the sense of urgency behind our deliberations has not been neglected. The sub-committee looked at the implications of change in the home affairs role and at crime and security. One thing was absolutely clear in those deliberations—modern crime is completely internationalised. Indeed, one thing was devastatingly clear—terrorism is totally internationalised. There can be no one in this House who does not lose sleep over security issues. We took evidence from people in the front line with practical, in-the-field responsibility in these spheres. It is worth noble Lords looking at not just that report but also the evidence because what came across to me as we listened to that evidence was that virtually without exception those with operational responsibility said that, unless we had gone mad, we must realise that we could handle this situation only with effective international arrangements in place. They had not a shred of doubt that we would have lost our marbles if we ceased to co-operate within the context of Europe. It is there in the evidence. Noble Lords should not listen to the opinions of fellow Peers but should read the evidence. However inadequate, however much there is need for change and improvement in the relevant arrangements, the European dimension has become indispensable to work in that sphere.
I think that a timescale of at least 12 weeks before the referendum is incredibly short for consideration of any report, but I also think that it is awfully luxurious in terms of how much time would elapse before such a report was available. If we are talking about the safety of our families and this nation and the protection of our industry, given the cyber issues that have been raised, we need factual information from the people in the operational front line about what we are luxuriously contemplating. The immediate security issues affecting our people today—tonight—demand that we know what we are going to do and how we are going to achieve that if we withdraw from the European Union, and how we ensure that the co-operation which those in the front line see as indispensable is maintained.
Viscount Trenchard
My Lords, I will not detain the Committee by going over all the arguments that have been made. I, of course, agree with those noble Lords who think that the information and any statements that may be produced should inform people about the consequences of remaining in as well as leaving the European Union. However difficult that may be, at least the Government should say what kind of association with the European Union they think would be desirable for the United Kingdom to pursue in the event that it votes to leave the EU.
My noble friend Lord Forsyth commented that under the Bank of England bank deposit guarantee scheme the maximum amount that is guaranteed has been reduced from £85,000 to £75,000. It is clear that that is because the euro is the currency of the European Union and all monetary values are determined in euro amounts. I suspect that this has happened because the sum was fixed at €100,000, which was approximately £85,000 and is now approximately £75,000. That is why the Bank of England has reduced by a significant percentage the maximum amount available under its guarantee scheme.
I also noticed that, according to the Daily Telegraph, Cabinet sources have informed that newspaper that the Prime Minister’s thrust for substantial alterations to our terms of membership will cover four main areas, and that he is asking for an explicit statement that the euro is not the official currency of the EU, making it clear that Europe is a multicurrency union. From that it follows that if Europe is to be a multicurrency union, it would not be possible in future for the Bank of England arbitrarily to reduce the maximum amount under its guarantee scheme in the way that it has, or to increase it, should the currency movement be reversed.
Lord Forsyth of Drumlean
My noble friend is absolutely right. Is the situation not even worse, however, in that even if the Bank of England wished to set another level it cannot do so? British pensioners and savers are having to reorganise their savings to make a reduction. The British Government, the Prime Minister or the Bank of England do not have the power to decide a simple matter, such as how much is guaranteed on deposit. That illustrates how overwhelmingly intrusive Europe has become.
Viscount Trenchard
The noble Lord is completely right. As I said in at Second Reading, it is necessary that our renegotiations should include the repatriation of financial regulation, the independence of the Bank of England from the European authorities, and the independence and equivalence of our own financial regulators with those of the European ones, which should be those for the eurozone.
Baroness Ludford (LD)
My Lords, in intervening briefly on this group of amendments, I apologise for doing so after having been unable to speak at Second Reading or in Committee last week, because of a serious family illness. I hope that the Committee will permit me to make a brief intervention, despite that absence.
I want to say two things. One has been said more than adequately by the noble Lord, Lord Judd. This concerned the point in Amendment 21 that stresses that the report on withdrawal should cover law enforcement, security and justice. The noble Lord is right: we should listen to the police and others in front-line operational roles. This indeed happened with the exercise of opting back in to 35 measures and that is what was so persuasive. That has been said by the noble Lord, Lord Judd.
Secondly, in supporting this group of amendments, particularly Amendment 21, may I take issue with the noble Lord, Lord Stoddart? He suggested that those of us who are perhaps on the inside have a lack of confidence in the UK. I deny that charge. It is not about lacking confidence in Britain, with its overtones of almost being unpatriotic, a charge I also deny; it is about living in the real world.
May I also take issue with the noble Lord, Lord Blencathra? Earlier, we heard that somehow we know better than the US trade representative. Mike Froman, a senior and serious person, has, in the words of the Financial Times, “poured cold water” on the prospect of the UK negotiating its own trade agreement with the US or with other major trading partners, such as China. He said that the US would have little interest in doing so and that the UK could face the same tariffs as China, Brazil or India. With respect, the noble Lord, Lord Blencathra, suggested that we know better than the US what the US would want to do.
Lord Blencathra
I am sorry if I gave the impression that we know better. I am not suggesting that; I am suggesting that we should distinguish between political rhetoric from a member of the US Government, who wants the United Kingdom to stay in Europe for a host of other reasons, and the reality that Americans would face should Britain decide to leave.
Baroness Ludford
I had some contact with Mike Froman when I was vice-chair of the European Parliament’s delegation to the US. He is an extremely hard-headed and tough character. I rather doubt that he is just indulging in politics. He is talking about the real world and what is actually negotiable.
This debate on the report on our withdrawal from the European Union has strayed into the set of amendments beginning with Amendment 24, on the alternatives and our future relationship with the EU, which is what I really intended.
Lord Forsyth of Drumlean
Could the noble Baroness help me with her great experience in these matters and her knowledge of these trade relations? Could she explain how it is that Iceland, which the Prime Minister visited the other day, has managed to negotiate a trade agreement with China and the EU has not?
Baroness Ludford
I am not a trade specialist, but I fully accept that far fewer interests are involved when 28 member states are trying to negotiate with China, while with a country of 60-odd million—the UK—would have many more interests at stake than Iceland. If you listen to the Scotch whisky producers, they say that it is because of EU clout that they have access to Asian markets. They did not get this with the UK negotiating for them, but with the EU negotiating for them.
Baroness Ludford
I will finish, rather than be intervened on from every direction. May I just finish?
Lord Pearson of Rannoch
My Lords, as the noble Baroness, like other noble europhile Lords, is praying in aid the recent remarks from the other side of the Atlantic, may I ask her and her colleagues to remember that 15 years ago, in 2000, the International Trade Commission, which I think is the largest economic think tank in the world and advises the US Congress, came over to this country for a fortnight? It took every single department to pieces and concluded that the United Kingdom would then have been much better off had it left the European Union and joined NAFTA, and that the United States would been better off, too. Since then, the trading position between us and the United States makes that claim even stronger, while the position of the European Union has declined and will go on doing so. It sounds as though as these remarks from the United States should be left out of the arguments of those who wish to stay in the European Union.
Baroness Ludford
I am grateful to the noble Lord for drawing a 15 year-old report to my attention. Unfortunately, I am not familiar with the International Trade Commission or its report. If he would care to send it to me, I would be more than pleased to read it. I think my point about living in the real world has been well made. The idea of the United States wanting us to join NAFTA is new to me.
In conclusion, it is essential to have these reports on withdrawal. In anticipating the ones on alternatives or the future relationship, I think they will become points of reference. We campaigners on both sides will try to make our point, but we have to give confidence to citizens and a point of reference to check our claims. These reports are essential.
The Earl of Courtown (Con)
Could we hear from the noble Lord, Lord Davies of Stamford? I know that he has been trying to get up for some time.
Lord Davies of Stamford
My Lords, I should like to comment briefly on two contributions this evening that should not be left unanswered or uncommented on. One was a contribution from the noble Lord, Lord Higgins, which I shall come to in a moment. The other was the recent remarks of the noble Lord, Lord Forsyth. He said that it was obviously absurd that the European Union should fix the level of retail deposit insurance. This is an important matter for financial stability. I put it to the noble Lord that there are extremely good reasons why there should not be a free for all in retail deposit insurance, and he should think about them carefully.
There are two such reasons. One is that if there is a free for all, there is a great temptation for individual states to compete by increasing the level of their guarantee, thereby attracting deposits from neighbouring states—or, as they would see it, competitive states. That is extremely dangerous because it leads to transferring risk from the banking system to a sovereign Government and when taken beyond a certain point, as happened dramatically in the case of Ireland just a few years ago, can produce a crisis of confidence in the credit rating of the sovereign state itself. That would be very foolish.
The other thing that it does is to introduce a moral hazard, when depositors find that in certain countries they face the chance of getting such a large level of guarantee on their deposit from the local sovereign state that they do not have to pay any attention at all to whom they are banking or placing their deposits with. That goes for sophisticated investors who are depositing hundreds of thousands, or millions, of dollars, pounds or euros. That sort of moral hazard is extremely dangerous and leads to lazy banking, and to banks being able to get away without satisfying their depositors that they are solidly and solvently managed—an extremely damaging thing for the stability of the financial system. I give way to the noble Lord, Lord Forsyth, who I hope will take my comments seriously because they are genuinely important.
Lord Forsyth of Drumlean
I do not take the noble Lord’s comments at all seriously. We are talking here about a guarantee of £75,000, which has nothing to do with people who are depositing millions of dollars around the world. Where I think he is right is that I can see the case for having a guarantee in a single currency zone. My point is that we are not in the euro, yet we are being told what to do with sterling.
Lord Davies of Stamford
My point is that if we had a free-for-all, it would start off at £75,000, which is roughly the equivalent of €100,000—that is why we have that figure. Some member state might well then be tempted to say “We will offer €150,000”, then somebody else would come back and say, “We will offer €180,000”. Then another would offer €250,000. There becomes a Dutch auction in these matters, which is very much in no one’s interest. This is an example of where the collective interest is much better served if individual member states do not adopt their own rules on this matter. I leave the point there. Although it is very important, I am prepared to continue with it in another context.
Lord Hamilton of Epsom
On the same principle, would the noble Lord, Lord Davies, advocate that we all had the same corporation tax rate?
Lord Davies of Stamford
There could be economic advantages in doing that; equally, there are other advantages in having tax competition. I am rather in favour of the latter, as tax competition produces downward pressure on the level of taxes. A free-for-all in retail deposit insurance produces upward pressure on the guarantee and therefore on the liability of the member states extending it. The two things are diametrically opposed. I know that there are arguments in favour of unifying corporation tax rates but they do not persuade me. I do not imagine that they persuade the noble Lord either.
I come to the remarks of the noble Lord, Lord Higgins, who always speaks with great thought and wisdom on these matters, although I do not usually agree with him on European issues. He said something very depressing: he did not think that anybody—or very few people—would bother to read any reports produced on this matter and that people would take their decisions otherwise, perhaps by looking at the press. I have no illusions about this. I am very depressed and worried about this campaign, which could turn extremely unpleasant. I anticipate that a number of the large-selling newspapers, particularly the Sun and the Daily Mail—and the Daily Express, which does not sell very many—will adopt a very demagogic and emotive campaign, which will be rather subtle and indirect. It will use dog-whistle techniques but will really be all about foreigners, refugees and barbarians at the gate. I fear that people will be influenced by that sort of thing but I hope that it will not be a dominant number, or certainly not a majority.
We have a sophisticated democracy and an educated public, so we should not be too depressed or cynical about our fellow citizens. There must be literally millions of people in this country who will face the decision they will be asked to make in this referendum very conscious of its importance for the future of their country, their families and their communities. They will desperately want to have some clear advice and information from somewhere. If they go on to the internet they will have 5 million references and be completely paralysed, as we all are when we look up a matter which is the subject of substantial and wide-ranging controversy on the internet. It is utterly reasonable that they have a small, defined number of authoritative sources, some of which must be identified with the two campaigns but some of which should be identified with the Government.
We seem to be missing two essential points here. One is that the Government and Parliament are the servants of the public, not the other way round. It is our responsibility, and the Government’s responsibility, to provide such a source of material and information. Whether or not the elector chooses to bother with it at all would of course be his or her decision. The elector is sovereign but under no circumstances should we not fulfil our duty, which is to provide the opportunity for this important element in the decision that individual electors will need to take.
Lord Marlesford (Con)
Does it not follow from what the noble Lord is saying that one way of reducing undue influence would be for both sides of the campaign to agree on a simple exhortation: make up your own mind?
Lord Davies of Stamford
I come now to my second point, which relates to what was said by the noble Lord, Lord Wigley. A citizen of this country is entitled to think that the politicians who he or she pays for will do an honest job in a case like this, by not merely providing an opportunity for a referendum to take place but providing what we can by way of elements to enable that individual elector to take a decision.
I want to re-emphasise the point made by the noble Lord, Lord Wigley. Any Government who are half competent—or even a quarter competent—will, in circumstances like this, produce their own study of the cases for joining or leaving, along with the costs of leaving or not leaving and so forth. Any Government who were 10% competent would be going through those exercises and, as he said, given that those studies will have been undertaken, they must not be kept under lock and key in Whitehall. The public in a democracy have a right to know to what conclusions the Government have come in their own studies. They have a right to have disclosed to them material information of that kind, which may be available in Whitehall or elsewhere in the interstices of government. On those two counts, it is absolutely essential that we do what we can to ensure that such reports are identified, undertaken and, above all, made available to the British public.
Lord Flight
I wrote to the Treasury about the reduction in the guarantee to £75,000 to have the reason confirmed. I have had a letter back from the Treasury saying that it is doing its best to negotiate that it cannot go any lower than £75,000, so I wish it luck.
I very much agree with my noble friend Lord Higgins but, to be candid, for even wider reasons the exercise is unlikely to be of huge use. First, if you are to have papers about staying in, you have got to have papers about coming out. Secondly, and fundamentally, the issues that are so important are matters of judgment. We do not yet know what the agricultural arrangements may be or what trade agreements there may be with America and India, and so forth. You could take an educated guess but a factual paper must not have educated guesses in it. A whole lot of historic dead data about the EU one way or the other will, candidly, not excite anyone in the slightest, but it is not the job of the Government to publish opinions. It is the job of the campaigning entities to express those expectations and opinions.
Lord Davies of Stamford
The whole point is that the individual campaigns will not have access to the material which the Government will have produced. It is essential that the public have access to that; if they cannot have access to it through the campaigns, the campaigns themselves will not know what material the Government have on the subject.
Lord Flight
Most of the factual information is already there in various forms, so it would not have to be reprinted by a government department. The crucial point is that the campaigners will set out their expectations and judgment as to what will happen one way or the other. As the noble Lord pointed out, leadership in this situation one way or tother is likely to win the referendum campaign.
The proposals seemed to start by suggesting that there should be a whole set of papers on either the advantages of staying in or the problems and risks of staying out. If we ended up with a fair and balanced covering of both sides, I think it would be pretty much a waste of time.
Lord Hamilton of Epsom
My Lords, the key to producing reports is who writes them. The answer is that the Civil Service writes them. Two things are wrong with that. First, the Government at the moment look as if they are going to advocate that we should stay in and the civil servants, if they are doing their job, will slew the reports in such a way that they advocate that we should stay in—so they are going to be biased and of little value for that reason.
The other point is that the EU is very bad at creating jobs. At the moment, it is looking at astronomically high levels of unemployment, particularly youth unemployment. There is one exception to that, which is creating jobs for civil servants. This makes the Civil Service even more biased than it might have been otherwise.
Baroness Morgan of Ely
My Lords, we have had a long and comprehensive debate. The decision in front of the country will have a huge effect on its future. If members of the public are to have a say, it is absolutely right that they should have information available to them in order to make an informed decision. The Electoral Commission suggests that people want this information. They do not feel equipped to make the decision at the moment. That is why we are requesting these reports.
The Government’s silence on some of these matters is extremely concerning. It could be interpreted in two ways. Either the Government do not know the answers or they have not understood the question. I want to explain what is at stake because it is very important that we prepare now to inform our fellow citizens. When I talk about our fellow citizens, I mean citizens of the United Kingdom, but there are also implications for EU citizens. We have to understand that a decision to leave the EU would have an impact not just on UK citizens but on EU citizens as well.
First, it is vital that we do not underestimate the complexity of the legal situation that would arise if we were to leave. EU law is part of UK law and its adoption over more than 40 years has given UK citizens, companies and public authorities a vast array of rights and duties. We need to know what those rights and duties are and what being an EU citizen gives you. We need the public to understand that. Many thousands of EU provisions have become part of UK law, not just at central government level but in the devolved Administrations and at local government level. So repealing or amending EU laws would necessarily be a very complex and demanding process. How would the Government manage this process? What would they do? What would they retain? Would they repeal certain amendments or would they just take the whole lot, lock, stock and barrel and accept them into UK law? Would we have one Bill, as was suggested earlier, or would we have to change every single Bill that has been passed over the past 40 years that has any reference to the EU?
Lord Forsyth of Drumlean
I do not understand the noble Baroness’s point. It is true that our law has been fashioned by the EU, but it is on the statute book. There is no need to do anything on day one after we have voted to leave the European Union. Surely she is presenting a problem that does not exist.
Baroness Morgan of Ely
We will not need to do anything on day one, but we will certainly have to disentangle our relationship with the EU at some point in the future. That will take an army of administrators and legislators to sort that out at a time when the Government want to cut the number of civil servants. We need to confront this practical issue.
We are interested in providing and getting the public to see objective information. Regarding the practical consequences for individuals in the UK in the event of withdrawal, I have already asked the Government questions in relation to maintaining EU employment rights. I am still awaiting a reply. The questions concern social legislation in a huge number of areas including maternity, paternity, parental leave, annual rights, the rights of agency workers, protection of employees on the transfer of a business and anti-discrimination legislation. Will these be retained or will they go? Is there a risk element here or not? It is fair to ask these questions.
Lord Forsyth of Drumlean
When the noble Baroness talks about giving us this money, it is our money which the EU is giving back to us because we are substantial net contributors. Is she really suggesting that we cannot take decisions for ourselves as to how we could spend that money?
Baroness Morgan of Ely
The noble Lord is absolutely right that we can take decisions; I am concerned about what those decisions will be. I have no clarity whatever that the money will go back into the UK coffers and then straight back to the farmers in the UK or the structural funds in the poorest areas of Britain. We have no clarity on that and it is absolutely right that we raise the question, particularly for those who are directly affected.
Turning to the amendment in my name, I ask what will happen to the citizens of Gibraltar. Spain would love to take the opportunity to leverage the whole situation of British exit to push its case for sovereignty over the island. What is the Government’s contingency plan if we were to leave? What would happen if Spain were to close the border? Would we send a fleet? Would we mount a Berlin-style airlift to support the island? The people of Gibraltar are very concerned with these questions.
Few would deny that membership of the EU and the single market brings huge advantages to the UK economy and to British businesses. Many other aspects of our national life have also benefited. Will the Government provide a precise and comprehensive report on the possible consequences of withdrawal? We are pleased that the Minister has said that she is in listening mode and that there may be a possibility of producing some kind of White Paper on the impact of withdrawal—and of remaining in the EU as well; I do not object to that. We would like to hear today a commitment that the Government will produce a White Paper and we would like to hear the timescale in which the Minister believes it will be possible to produce it. Much of the work has been done. The balance of competences review has done a lot of the spadework. It needs to be updated into a comprehensive look at the consequences. We believe that the failure to provide such information before a decision of this magnitude would be letting down the British people and shirking an essential responsibility of government.
The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)
My Lords, I am grateful to all noble Lords for their contributions to what has been an extensive and certainly an important debate today. This Bill sets the stage for one of the biggest decisions that the British public have been asked to make in a generation. It is absolutely right to say, therefore, that the British public should expect to be able to make an informed decision and to be provided with information about the possible consequences of the decision they take when they cast their vote.
The debates today give the Committee the opportunity to consider what information it is appropriate and/or necessary for the Government to provide at the conclusion of the negotiations for a reformed EU. As the Electoral Commission has recognised, it is the designated campaign organisations that will play a crucial role in providing such information. This is the established practice in the United Kingdom and is in line with the Council of Europe’s best practice guidance on referendums. However, as the noble Lord, Lord Hannay, has argued, along with many other noble Lords, there may also be a role for the Government. That issue has been fully discussed today, and there are further matters relating to that in other groups that we will discuss later today.
Each of the amendments in this group creates a statutory requirement for the Secretary of State to publish a report no later than 12 weeks before the date of the referendum and to lay such reports before each House of Parliament. Before I refer to the timeframe itself, in line with the normal practice in these circumstances, I should comment on the different content required in each report as set out in the amendments themselves.
Amendment 21, in the names of the noble Lord, Lord Hannay, the noble Baronesses, Lady Morgan of Ely and Lady Smith of Newnham, and my noble friend Lord Bowness, requires the Government to publish a report that sets out information on the consequences of withdrawal from the European Union. The report must cover: the effect that withdrawal would have on the rights of individuals in the UK, and on the rights of UK and EU citizens living in the EU and UK respectively; the legislative consequences for each government department and the devolved Administrations; and the impact on social and environmental legislation, law enforcement, security and justice. Many noble Lords have intervened in other Members’ speeches with regard to these matters.
This has been a very useful opening salvo to the debates today on information, but I rather feel that the noble Lord, Lord Hannay, will not be too surprised if I remark that his amendment is highly prescriptive. I know that he meant to set out a very good construct around which other noble Lords could contribute; he has achieved just that and I am grateful to him. As for the content of the amendment, the duties that it imposes are onerous. That is not necessarily a reason to not do this, but I am very mindful of what my noble friend Lord Higgins said when he posed the question of whom these reports are meant to be for. That is what we need at the core of our deliberation. The public are educated and sophisticated, and those of us who are unelected take those who cast their votes for another place very seriously indeed. When we go on the doorstep, we listen to what they say. We are confident, as we should be, that they want to see clear, objective information, but the question to consider is how that will be best delivered. How will it be objective? As my noble friend Lord Higgins said: how will it be accessible? We want not to overwhelm people with detail but to enable them to make an informed decision.
Amendment 21 would also need to be carefully reworked before it could appear in the Bill. For example, the references to “European” or “United Kingdom citizens” and to “devolved jurisdictions” would need to be corrected. We would need to work out whether there was an intended distinction between the use of the terms “legislative” and “statutory”. We would also need to clarify what was intended by the term “social legislation”, which is at present so broad as to be unclear. The very broad nature of the examples that noble Lords gave showed the difficulty with the definition. We would also need to think carefully about which of the areas in question, such as environmental legislation, were devolved matters.
I know the noble Lord, Lord Hannay, has used this as a valuable spur to debate, but I should put on the record why it would not be appropriate to accept the amendment, which appears to require detailed analysis of future discretionary changes to devolved legislation, without first consulting the devolved Administrations. I hope that noble Lords will accept that it would be inappropriate to commit at this stage, on behalf of four different Governments, to producing such broad analysis. To condense this into one report could be confusing to those who need to make a decision at the ballot box.
Amendment 27, tabled by my noble friends Lord Blencathra, Lord Hamilton and Lord Flight, would create a statutory requirement for the Secretary of State to publish a report and lay it before both Houses of Parliament 12 weeks before the date of the poll. Unlike Amendment 21, this report must set out the consequences for the United Kingdom of remaining in the European Union. The amendment has given the Committee a valuable opportunity to broaden the debate on what constitutes information appropriate for the Government to publish. In that respect, it assists the debate today. However, like Amendment 21, this is a highly prescriptive amendment that sets out six areas that the report must cover. These include the effect on the UK’s social security systems, its insolvency law and its place on the IMF if it were to remain in the European Union. Noble Lords will be aware that providing the level of detail required by this amendment on a wide range of policy areas could involve a high degree of speculation. We would all be cautious about that, I hope. Without a crystal ball—I do not have one to hand—I fear that we could struggle to anticipate future policy developments at EU level. I know, as I have heard it from all quarters around the Committee all afternoon, that noble Lords want to ensure that any information provided to the public is well founded and assists an informed decision.
Amendments 28 and 29, from the noble Lord, Lord Wigley, and Amendment 30, from the noble Baroness, Lady Morgan, focus on the consequences of a withdrawal from the EU on structural funds, support for agriculture and Gibraltar. Amendments 31 and 32, from the noble Lord, Lord Green of Deddington, focus on the consequences on net migration of remaining in the EU and access to citizenship for non-EU citizens within member states. I will make two points with regard to all these amendments. These are highly specific obligations. The question we need to consider is whether every one of the requirements set out in these amendments represents the extent of the information that the general public would need from the Government or not. We come back to the question of what it is right for the Government to propose for the public—which includes us as voters—to be able to make a well-informed decision. Noble Lords clearly already have varied views on that, and we need to see how we take that forward to be able to come to some common conclusions at some stage.
Lord Wigley
I thank the noble Baroness for the attention she is giving this. If the Government were unable, after considering this matter, to give a commitment to bringing reports on structural funds and agriculture—which my two amendments address—would she rule out the right of the National Assembly for Wales to bring forward its own reports and its own interpretation of the situation?
Baroness Anelay of St Johns
My Lords, it would be wrong of me to give a commitment on that until I have come to the conclusion of what I may or may not be able to offer. I do not want to provide too much hope about what I am going to be able to offer, but I hope it will be seen to be constructive, which is how it is intended. I know the noble Lord makes a very serious point in his intervention. At the base of this, and what needs serious consideration, is what the Government should be providing and what should be provided by campaigning bodies.
Lord Hannay of Chiswick
My Lords, I welcome all the contributions that were made today, even if some of them strayed into what is known as the ”Second Reading repeat” category. We heard many views expressed and I think we have made progress. I thank the Minister for her response to the debate—which was, as usual, thoughtful and considered—and for her willingness to take this all away and consider what sort of amendment the Government could introduce on Report. I would certainly not be so churlish as to either criticise or reject that.
I am a little puzzled by her recoiling in horror from any time factor to be associated with the provision of information. I was not quite sure whether she thought that 12 weeks was too long or too short. In any case, a time factor of some sort is pretty desirable; the risk otherwise is that there will be controversy about the material being produced too late. It would not be the first occasion on which the Government have arrived too late with material and it would be bad and contrary to the Government’s own interest if that were to happen in this case. So I hope the Minister will not exclude the possibility of a time limit when she considers all that has been said in this debate. On that basis, I beg leave to withdraw the amendment.
Lord Turnbull
“Office for Budget Responsibility
(1) The Secretary of State shall request the Office for Budget Responsibility to consider and report on the effect on the United Kingdom economy of withdrawal from the European Union.
(2) The report provided for by subsection (1) must be published, and laid before each House of Parliament, no later than 12 weeks prior to the appointed date of the referendum.”
Lord Turnbull
I apologise for missing the earlier part of this debate; I was detained on other business in the House. I have heard enough, however, to convince me of the importance of providing an authoritative and objective analysis not just of what “in” looks like but of what “out” would look like. I have also heard enough to convince me just how complex a task this is, but it is a task that we have to complete—we owe it to our electorate. I do not share the pessimism that not many people out there will want to read this: they may not read the actual reports, but they will certainly want to go into the discussion of them.
It can be argued that reporting on the impact to the economy, which is the subject of this amendment, would be subsumed in one or another of the amendments in the previous group, or in the analysis that the Minister has offered. I very much welcome the assurance that she has given us. This amendment is less about scope and more about who is best placed to provide an objective account, whether that is the Government, the campaigning groups or an independent entity. For many of the issues—including those listed by the noble Baroness, Lady Morgan, of residence, citizenship, employment and the various regulatory regimes which will replace EU legislation—answers can be provided only by the Government, as they are the only people who know the full complexities of them. However, for a report on the impact on the economy, I believe that we do have an alternative—we have created the Office for Budget Responsibility, which has developed a reputation for objectivity—and I think we could entrust this task to it.
There have been two major reports produced by Treasury officials—it was after I left the Treasury, but I am still very proud of them—the assessment of the five tests for entering into the euro, in 2003, and the implications for Scottish independence of the attempt to share a currency. Both were excellent pieces of work, objective and authoritative; and both, I believe, had a significant influence on the decisions that were made. However, in the case of a possible exit by the UK, I believe that political pressures will make it difficult to separate analysis and advocacy, to use the terms that my noble friend Lord Hannay has used, in any reports emanating from the Government. Special steps will need to be taken within Government, for the bits that they are doing, to separate out the people developing the advocacy part of it from the people doing the work.
In the case of the impact on the economy, when we have a body such as the Office for Budget Responsibility available, with a reputation for competence and independence, I believe that we should use it. I beg to move.
Amendment 23 (to Amendment 22)
Lord Blencathra
Lord Blencathra
I can be brief, my Lords, because the key issues of principle were thoroughly debated in the previous group of amendments—the key issue of principle for me being that if the Government were minded to go down the route of publishing a report setting out the dangers of leaving then there should also be a report on the consequences of staying in. I noted very carefully what my noble friend the Minister said. I congratulate her on winding up such a controversial and difficult debate. I look forward to seeing that amendment and hope that it will be impeccably neutral. She will have noticed that the Government would be stepping into a political quagmire if they went into the details set out in my amendment or even the amendment of the noble Lord, Lord Hannay.
The Office for Budget Responsibility describes itself as one of the,
“independent fiscal watchdogs around the world”.
It has five main roles: to produce a five-year forecast for the economy and public finances twice a year; to use its public finance forecast to judge the Government’s performance against their fiscal targets; to scrutinise the Treasury’s costing of tax and welfare spending measures; to assess the long-term sustainability of the public finances; and to assess the Government’s performance against the welfare cap. I am therefore not certain that the OBR has any real role in forecasting the consequences of leaving the EU, but again I make the point that if the Government are minded to accept the amendment in the name of the noble Lord, Lord Turnbull, it should have a parallel duty to forecast the consequences of staying in the Union.
If the OBR is going to make such a report, I hope it will look at three little things as the EU continues its attempts to harmonise social security legislation—and there is talk about the need to change pension rules. In those circumstances the OBR should report on the financial consequences for British tax and welfare budgets. If we were to stay in, then it should report on the lost opportunities to utilise our £12 billion Union contribution, which would be completely at our own disposal if we were to leave. Since the Union, as I have said very boringly before, is in relative decline compared with the American and Asian economies, we should have a report on the dangers to the UK economy of being held back by the slow growth of the EU.
There are many other issues that I could add to that à la carte menu, but we do not need to go through them again tonight. However, I suspect that it is better for the credibility and independence of this fiscal watchdog that the OBR should not attempt to report on the consequences of either staying in or leaving. If it does one, though, it should do the other. I beg to move.
Lord Forsyth of Drumlean
My Lords, I normally agree with the noble Lord, Lord Turnbull, and I have the greatest respect for him and indeed the Treasury. He is right to say that the Office for Budget Responsibility has been a success. I would therefore be very concerned if we were to accept the amendment and taint the reputation of the OBR by giving it this impossible task. Perhaps the noble Lord could contradict me but if I were to take the Bank of England, for example, an organisation that has a formidable reputation, and I were to look at the forecasts it has made about the progress of the economy over the past 20 years—indeed, over most of my lifetime—the only thing that has been consistent about those forecasts is that they have been consistently wrong. The notion that this body called the Office for Budget Responsibility can look into its crystal ball—I am reminded of that character that used to appear on the National Lottery, Mystic Meg—and predict the future is asking a very great deal of it. As my noble friend Lord Blencathra has said, it is hard to see, given the existing responsibilities of the OBR, how it would be able to set about this task—with the necessary expertise, at any rate. As he listed its responsibilities, it seemed to me that the OBR has quite enough on its plate without adding to it.
I support my noble friend, though, and indeed my noble friends Lord Hamilton and Lord Flight, in the amendment that seeks to bring a balance to this. I am not going to repeat the arguments that we had in considering the previous amendments, but if you are walking in the woods and you see a bear trap, it is probably not a good idea to put your leg in it. None of the arguments that one hears about the EU is couched in terms of, “If we weren’t in it, we would want to join it”. That was what struck me about the Prime Minister’s remarks about Iceland and Norway over the weekend. No one in Iceland or Norway wishes to join the European Union.
Lord Wallace of Saltaire
My Lords, the Government of Norway have consistently had a large number of Ministers who wished to join. There are all sorts of reasons why a substantial chunk of its population does not agree. I myself was involved in discussions with the last Icelandic Government, who also wished to join. So “no one” is a mild exaggeration.
Lord Forsyth of Drumlean
I do apologise to the noble Lord. He is still in ministerial mode; I was talking about the people. I know the people of Iceland extremely well; I have gone there every summer to fish for the past 12 years. I know exactly what has happened in Iceland. I note that the noble Lord also, in his typically selective choice of argument, talks about the last Government of Iceland, not the present one, whose Prime Minister himself made the point to our Prime Minister that they were perfectly happy outside the EU because they had all the fish and, I say to the noble Lord, Lord Davies of Stamford, the opportunity to deal with their financial services crisis as they saw fit, which did not involve bailing out the bondholders and the bankers, and very successful they have been.
The noble Lord, Lord Wallace, distracts me from my bear trap.
Lord Wallace of Saltaire
My Lords, the very thought that the noble Lord would ever intervene on someone to distract them is something that I would not conceivably believe.
Lord Forsyth of Drumlean
I have to say that the noble Lord is probably the only Member of this House who I think might possibly put his leg in the bear trap while it was still in the wood. No one is making the argument in this country, in Iceland or indeed in Norway that if we were outside the EU we should join now on the terms that we are already subject to. That is the point about the bear trap.
However, we are in the position where our leg is in a bear trap. The argument from the noble Lord, Lord Turnbull, and from many of the people who have spoken today on these matters seems to be that it would just be too painful to take our leg out of the bear trap, and that the best thing is for us to stay where we are and bleed to death. I think we ought to consider what the benefits would be of taking our leg out of the bear trap, and that is what my noble friend Lord Blencathra’s amendment seeks to add to Amendment 22. I see that the noble Lord, Lord Kerr, wants to intervene, and I happily give way to him.
Lord Kerr of Kinlochard
How kind of the noble Lord. Nothing was further from my mind than interrupting him in any way. I would like to get back to his Mystic Meg argument, which I am still trying to work out; my mind is very slow in these matters. That argument depends on the assumption that the noble Lord, Lord Turnbull, would be asking the OBR to forecast the future course of the world economy, the European economy and the UK economy if we came out or if we stayed in. I do not think that that is the case. The amendment in the name of the noble Lord, Lord Turnbull, asks that the OBR consider what would have changed—what the effect would be of coming out.
I myself would be happy to add to that, although I do not know if the noble Lord, Lord Turnbull, would, the amendment suggested by the noble Lord, Lord Blencathra, which seems to be perfectly reasonable. I follow his argument about staying in or coming out. The important bit would be: what would be different if we came out? The consequences of the differences is what one would be asking for. The Governor of the Bank of England addressed this question the other day, talking about what would have been different if we had not been in the single market for financial services. That is a perfectly reasonable question to ask. I would be happy to support the amendment in the name of the noble Lord, Lord Turnbull, and that in the name of the noble Lord, Lord Blencathra, but I do not understand the Mystic Meg argument, advanced by the noble Lord, Lord Forsyth, that somehow we are asking the impossible.
Lord Forsyth of Drumlean
I am most grateful to the noble Lord for that intervention. The amendment refers to the,
“report on the effect of the United Kingdom economy of withdrawal from the European Union”.
In order to do that one would need to take a view on what is going to happen to the euro and if there is someone in the Office for Budget Responsibility who knows the answer to that question, I have to tell them they could be a billionaire tomorrow.
Of course no one knows what is going to happen to the euro. I agree the probability is that it is not going to survive unless there is very substantial further integration within the European Union but no one knows to what extent that will be possible. For example one can look at the attitudes towards the problem of mass economic migration into the European Union and the chaos which the members of the European Union are in at the moment and their inability to agree. Does anyone in the Office for Budget Responsibility know how to predict the outcome of that matter?
The noble Lord, Lord Kerr, is expert at dealing with the European Union. I can remember as a Minister arriving at meetings and he had already prepared the compromise that we would accept and the press release which announced a great victory by Ministers over the European Union to be released before we had even got off the plane. I know that he believes very much in the opportunities for flexibility in matters of wording but the wording on this amendment is asking the Office for Budget Responsibility to do the impossible—to tell the future. In so doing they will almost certainly get it wrong, like the Bank of England and everyone else who tries to tell the future, and that will damage their constitution.
Lord Lea of Crondall (Lab)
The bear trap metaphor is getting in the way of the thread of the noble Lord’s own logic. He has got lost in trying to demonstrate that this is either a job that no one should do or it is a job that should possibly be done, but not by the Office for Budget Responsibility. If it is the former, is it not the case that many people in the debate about the referendum are desperate for some sort of guidance on the two scenarios? Indeed the governor’s speech and what happened last week in Iceland are very relevant. Is the noble Lord saying that no one should do this job to the best of their ability, however difficult, or simply that the Office for Budget Responsibility should not do it?
Lord Forsyth of Drumlean
I am saying that the Office for Budget Responsibility should not do it and I am saying that the point made half an hour ago by my noble friend Lord Flight is absolutely right. These are matters of judgment, and the people who should make the arguments are the people who are on either side of the campaigns. It seems to me, listening to arguments from the noble Lord and from others on his side, that they have got quite a lot of work to do if they are going to persuade the British people to vote to stay in the European Union. Whether or not staying in the European Union is in the best interests of our economy is a matter of judgment. Even in Greece it would appear that a majority of the voters still think that it is in their interests to be in the European Union and within the eurozone. I am very happy to leave that to the judgment of the British people in the referendum.
Lord Hannay of Chiswick
Unless I have got it completely wrong, the noble Lord is basically advancing the argument that Governments should not produce economic forecasts at all—they are a complete waste of time, they are always wrong so let us ditch them. However, he supports a Government who regularly produce economic forecasts at the time of the Budget. Those economic and fiscal forecasts are regularly reviewed by the Office for Budget Responsibility and I think we are all a bit the wiser for it. Of course it does not give you the answer to everything and like the noble Lord, Lord Kerr, I would be happy to support the addition by the noble Lord, Lord Blencathra, but this dismissal of all forms of forecasting on the impact on the economy of staying or leaving is frankly to go back about 150 years in the practice of economic policy.
Lord Forsyth of Drumlean
The noble Lord exaggerates to make his point. I am not arguing against economic forecasting. I am simply saying that the record on economic forecasting is not very good and the Bank of England is a classic example.
This is not about economic forecasting. This is about the effect on the United Kingdom’s economy of withdrawal from the European Union which is a huge issue. It is not just about the implications for the economy directly as a result of taxation or fiscal policy or matters of that kind. It is about the impact of immigration, it is about what happens in terms of the advantages that we would gain by being outside the European Union, our ability to negotiate our own trade agreements, our ability to be free of suffocating regulation, our ability to decide matters for ourselves, our ability to control our borders—all these things will have an impact on growth rates and the future of our economy. I am simply arguing that the Office for Budget Responsibility does not have the expertise or the ability to do that. I am delighted that the noble Lord supports my noble friend Lord Blencathra’s amendment looking at the other side of the equation, which is staying in.
I will repeat a point I made earlier. It is astonishing to me that we are members of the European Union and the arguments that we have heard from the Europhiles—the people who wish to remain in the European Union—have all been characterised in terms of the threats of leaving rather than the benefits which we have. That seems to indicate a degree of uncertainty.
Lord Liddle
I do not know who the noble Lord has been listening to about threats. It seems to me that the pro-European people are making a very modern argument for our membership of the European Union—a case which is far stronger than it was when we originally joined—that in this really dangerous world with chaos in Africa, fanaticism in the Middle East and rising nationalism in Russia, what we should be doing is sticking with our friends and acting as a united Europe.
Lord Forsyth of Drumlean
We do not have to be in the European Union to stick with our friends, and NATO is a good example of that. I am not referring to the general debate, I am referring to the amendments—for example the amendments in the name of the noble Lord, Lord Hannay, to insert a new clause headed:
“Report on the consequences of the United Kingdom withdrawal from the European Union”,
but not to report on the benefits of being in the European Union.
Lord Forsyth of Drumlean
May I just finish answering this point first? I am simply making the point that it is very startling that those who are most enthusiastic about the European Union wish to couch their arguments in terms of what it would be like if we left as opposed to why it is in our interests if we remain.
Lord Liddle
There is a very simple reason for that which is that most of the anti-European case that is put forward suggests that it is cost-free to come out of the European Union. That is why these arguments are being pressed; if you listen to the way a lot of people talk who favour withdrawal, they think it is cost-free. They assume we can negotiate anything we want. It is they who are not facing up to the realities of the world.
Lord Forsyth of Drumlean
I have to say that cost-free would be a considerable improvement on the £8 billion net contribution that we are currently making because it is certainly not cost-free to remain in.
Baroness Smith of Newnham
Will the noble Lord explain why he thinks that a report on the consequences of withdrawal is about fear rather than something that benefits people who want to remain in the European Union? To go back to his bear analogy, what if the vet comes along and suggests taking the bear’s leg out of the trap so that it is recovered, rejuvenated and much happier? Is that not an alternative reading of it?
Lord Forsyth of Drumlean
The noble Baroness is now pulling my leg if she thinks that that argument has any substance. I am simply making the point that the whole thrust of the argument that we have had in terms of producing reports from those who wish us to stay in the European Union have been about “hanging on to nurse for fear of something worse”.
Lord Kerr of Kinlochard
I do not know whether the noble Lord has noticed but the fact is that we are in the European Union now, so the question for the electorate is, “Shall we leave?”. The argument that he is just making would be very good if we were not in the European Union and the question was, “Shall we join?”. Then I would be required to try to demonstrate to him that there would be benefits. However, the question for this referendum is, “Shall we stay or shall we leave?”. That is the issue.
Lord Forsyth of Drumlean
I entirely agree with the noble Lord about what the issue is. I will not repeat the same arguments, because I can see that the Whip is beginning to twitch and is thinking about the dinner hour.
Baroness Ludford
Very briefly, on the logic of the noble Lord’s argumentation it seems to me that he should have tabled an amendment asking for a report on the benefits of membership, because he is saying that those of us who want to stay in wanted to put a negative spin on withdrawal—which I do not accept, because we want a factual report. However, turning that round, those people who want to leave should have forced or tried to force a report on the benefits of staying in, because they believe that that would show up that there are not benefits.
Lord Forsyth of Drumlean
I would not ask for a report on the benefits of staying in, because it seems absolutely apparent that we are considerably disadvantaged by joining with an organisation which is unable to control its currency or borders, and which prevents us exercising our sovereign ability to control our borders and to ensure that we have the conditions in which enterprise can flourish. I look forward to David Cameron’s initiative in the European Union to discover whether the European Union itself realises how it is damaging member states in the Union. I cannot for the life of me imagine why the noble Baroness would want me to put down an amendment suggesting that we have a report on the benefits when so much damage is caused by the way in which the European Union is organised at present. I support my noble friend’s amendment.
Lord Lea of Crondall
The last 15 minutes have been very illuminating. We now have the position where the noble Lord, Lord Forsyth, has concluded that we do not want any attempt to have this independent assessment because it is up to the two sides to fight it out as if we were in Madison Square Garden. I will quote him many times in the future on that basis. These people do not want any independent analysis—they just want a shouting match to see who can shout the loudest. That is exactly what he said, and that is my first point.
Lord Forsyth of Drumlean
It is not what I said at all. I said that whether we stay or leave is a matter of judgment and opinion. The idea that the Office for Budget Responsibility can intervene in this matter is not sensible. In fact, it would be difficult for the Government, because I very much hope that at the end of the day collective responsibility will be suspended and that members of the Government will be able to campaign according to their own judgment. Therefore the idea that the Government or anyone else could produce an independent report is fantasy. Of course people must have the facts; I hope very much that people on both sides of the campaign will resist the kind of scaremongering which we have heard from people like the noble Lord—yes, indeed—who support that particular side of the argument. We have heard that 3 million jobs will be lost and other scare stories, which will simply turn off the voters. However, I do not believe that it is impossible for those on both sides of this argument to honestly put out arguments and facts and let the people decide.
Lord Lea of Crondall
It is quite often possible to summarise the general opinion of politics in this country, as a default position, as: “They just shout at each other and they don’t try to find the truth in the public interest”. This will be an historic decision for Britain, and the idea that we will not do our best to find any independent ground to give to the British people is quite extraordinary.
I was the person who, at Second Reading, first made this proposal and started this hare, or bear, running. That was done to meet the argument put forward by noble Lords such as the noble Lord, Lord Forsyth, that we must find out what the consequences would be of being out, because they on their side—and it is true that I am on one side, just as the noble Lord, Lord Forsyth, is on the other side—were saying that there will be absolutely no problem with being out, without any of the downsides; for example, that we will have all the benefits of EFTA. Of course, this weekend we now hear from the Prime Ministers of Norway, Sweden, Iceland, Greenland, the Faroe Islands and wherever that this is not the case. We have now got into the position where, this bear trap or whatever it is having been opened up, the noble Lord seems to be running away from the argument that his side started about a month ago, which is very interesting.
The only other way in which I guess we could have an independent analysis without it being done by the Office for Budget Responsibility would be to set up some new academic/ex-Whitehall or Civil Service commission, or something like that. It would not be easy to get agreement—as I think the noble Lord, Lord Turnbull, said at the beginning—in that rather heated atmosphere on what such a body should be like. I do not think that the noble Lord, Lord Forsyth, has doubted that the credentials of the OBR as regards its degree of dispassionate analysis could be bettered. It now has a reputation, with some ex-Treasury officials in it, as a body which does not kowtow to the Treasury, which some people feared. However, it established its own independence and credibility at the same time, not like a parliamentary Select Committee with an eye for newspaper headlines wanting to find something extravagantly newsworthy to say. This is therefore about as good an attempt as will be made.
Finally, we do hear a red herring from time to time, which is of course that after the referendum, if it leads to exit, another negotiation would follow whereby tariffs would not go up against Britain, and that otherwise they would. All these existing problems would suddenly be revealed for analysis when we are out, not before we are out—before we have voted—but when we are going to go out they would have another negotiation. That particular fox, to change the animal metaphor, has been shot dead three times, and I should think it is pretty dead now.
Lord Collins of Highbury (Lab)
My Lords, I will try to be very brief. I will start by saying that in the previous debate and at Second Reading my noble friend Lady Morgan made our position of support for the principle of reports and information quite clear. This comes back to the Electoral Commission’s submission that people want more information and informed debate. Clearly, we know that the debate will be focused on those who are committed to remaining in and those committed to leaving. However, the debate today highlights a problem we have with people who take a fixed position. I am one of those who believe that the Prime Minister is intent on negotiating progress within the European Union. I also believe that the European Union is open to constant reform. I do not see the date of the referendum as the date when everything stops, with it simply being a question of deciding, “It’s good now” or “It’s bad now”. The debate on reform is really important, which is why the Office for Budget Responsibility can have an important role to play.
The noble Lord, Lord Higgins, asked, “Who are these reports for?”. I could not agree with him more in asking that, but I think that they will make an important contribution and stop the debate deteriorating into one between those who simply want out at any cost and those who simply want in at any cost. The reform agenda must be very much at the forefront of the debate that we will have.
I think that the Office for Budget Responsibility is capable of doing the job. It produces reports on the Budget and is capable of producing a longer-term fiscal sustainability report on future trends and pressures. It is ideally suited to the job and I think that people will want to hear from it. There were debates in the other place about whether the Bank of England should or should not express an opinion. We support the independence of the Bank and it has been doing a good job. The noble Lord, Lord Forsyth, thinks that the Bank has got it wrong many times and asks, “Why should we listen to it now?”. However, I am also aware that when even a body like the Bank of England reports, the Guardian says that its report shows that the EU provides a dynamic environment for economic growth, whereas the Daily Telegraph said that the report has nothing to do with EU membership. So whatever the OBR produces, I have every confidence that the campaign to remain in the EU will say one thing and that the campaign to take Britain out will say something else. However, the British people deserve to understand the source of the information, which is why we will support both amendments.
Baroness Anelay of St Johns
My Lords, in moving Amendment 22, the noble Lord, Lord Turnbull, has enabled the Committee to have a debate which goes to the heart of the question of who should be the author of a report regarding the effect upon the economy of the UK were there to be a decision by the British people at the referendum to leave the EU or remain in the EU. Of course, I notice that the amendment of the noble Lord, Lord Turnbull, talks about withdrawal and that my noble friend’s amendment talks about remaining in, but Amendments 22 and 23 together have enabled an overall debate.
The request in both amendments goes beyond the remit of the OBR, which is set out in the Budget Responsibility and National Audit Act 2011. The OBR’s main duty is to monitor the sustainability of the public finances. Its role is to make economic and fiscal forecasts based on the policies that the Government plan to implement. Conducting analysis of hypothetical scenarios for the purpose of a referendum is simply beyond its scope. Indeed, the statutory basis of the OBR forbids it to consider the effects of alternative policies.
It may assist the Committee if at this point I refer briefly to the 2011 Act. The precise language under Section 5(3) is as follows:
“Where any Government policies are relevant to the performance of that duty, the Office … must have regard to those policies, but … may not consider what the effect of any alternative policies would be”.
The point on alternative policies is very clear. In the Government’s view, these amendments would indeed require the OBR to consider alternative policies, as I think has become clear during the debate.
As my noble friends Lord Blencathra and Lord Forsyth alluded to, we should consider a wider point. If the OBR were to report on the economic consequences of UK withdrawal, it would risk pulling the organisation into the political debate—something that the OBR was set up precisely to guard against—which could therefore undermine its reputation as an independent and objective institution.
I understand that the amendment was tabled as a spur to debate and it has helped us in that regard. As I advised noble Lords at the end of the debate on the previous group of amendments, we will now think carefully about the issue of public information and consider what we may be able to bring forward by way of an amendment on Report. At this stage, I therefore invite the noble Lord, Lord Turnbull, to withdraw his amendment but, in the first instance, I urge my noble friend Lord Blencathra not to move Amendment 23, which is an amendment to Amendment 22.
Lord Turnbull
My Lords, the purpose of the amendment was to draw attention not just to the question of information but to the validation of that information—the quality of it and the trust that people can put in it. One point on which I can agree with the noble Lords, Lord Forsyth and Lord Blencathra, is that the information should be symmetrical, but I fear that the way that the debate will go is that the Government will negotiate a series of changes and will want to come back and tell people that they are good and sufficient. So I think that we will hear rather more about the benefits of staying in and not enough about the effects—I will not say “dangers” or “fears”—of going out. Symmetry is the first principle and validation is the second. There may be objections to using the OBR but, whatever the Government produce, and I welcome this proposal, they will have to answer the question of how we make people believe that the analysis is authoritative and technical. I see that the noble Lord, Lord Forsyth, wishes to intervene. The purpose of the analysis is to help people to make up their mind; it is not to offer them judgments.
Lord Forsyth of Drumlean
I appreciate that people are thinking about the dinner break, but will the noble Lord just reflect on when we last tried this? It was when the Scottish Government produced their White Paper on the referendum. The assumption was that the oil price would be $110. Is he not concerned about that experience?
Lord Turnbull
The noble Lord keeps using the word “forecast”. I do not see these as forecasts; they are analyses based on different assumptions, the purpose of which would be to draw out for people the complexity of the situation and the number of variables in play, and to draw attention to aspects that they may not have thought of. The idea that the OBR would produce a single forecast that could be falsified simply on the basis of one variable is wrong.
I return to the fact that there is to be a response from the Government. I think that we should wait for that but I hope that it will address how this work can be done by government, even if it does not use institutions outside government, in such a way that people can have the greatest faith in it.
Disabled Students’ Allowance.
Lord Addington
To ask Her Majesty’s Government whether they plan to make any changes to the disabled students’ allowance.
Lord Addington (LD)
My Lords, I thank all those who have put their names down to speak in this debate. I particularly thank the noble Baronesses on the Front Bench directly in front of me. They have had to put up with one or two changes of plan.
I declare my interests. Normally, it is just a case of referring to them, but on this occasion I think that I should go through them a little more fully. I start by saying that I am dyslexic. For nearly two decades I have been a user of assisted technology in my day-to-day life. I am a vice-president of the British Dyslexia Association and I am also the chairman of a company called Microlink, which deals with assisted technology and has a long involvement in a student loans company. It is a decreasing part of that company, which is a very good thing because we are now losing money on it.
My Question as originally put down asks whether the Government have plans to make changes to the disabled students’ allowance. It is now quite clear that they do. They are well developed plans and the consultation has gone out, which I have seen some of the documents for. The big question that comes up in this is the role of the universities where the students are studying—the HEIs, universities or call them what you like. What happens and what their role is in this new situation are vital, because if we look at the existing model we see that the institutions do not have to do that much. The disabled students’ allowance allows you a plan of support which is individual to you and which you take to the university. The university then integrates you into the system and does not have to do that much.
The Equality Act potentially draws this into question. However, we do not know exactly what the Equality Act would mean in terms of legal responsibility to the individual student because the best and most important thing about the current scheme is that it is an individually based package. Perhaps I may digress from the mainstream for the moment: as a dyslexic, there is something that I would have raised a long time ago if I had known this process was going on, just to show that the existing system is not perfect. It is the fact that dyslexics had to be assessed again, at the cost of several hundred pounds per individual, if they were dyslexic—not if they had another condition—because, apparently, the fact that they had been assessed for a lifelong condition at some point in the past was not good enough and they had to go again. It was most keenly argued for by people who seemed to be carrying out the tests—but let us leave that one where it falls. It could and should have been looked at in the past. It grew organically; it grew as you could meet needs going through the system.
However, you now have an individual structure. Will the university provide that individual package to meet the needs of the person? This is very important, because when you look through, you see a lot of talk about generic technology and providing it free of charge with no licence involved. As a user of this type of technology, software and back-up—I think that I am the only person in the Chamber who does, although I stand to be corrected—let me tell you one thing about it: if it is not reliable, it is not worth having. There is a lot of very cheap and shoddy stuff out there. If you do not have somebody you can go to to support you with it, it is not worth having. If you do not know when you switch on that device that you have got a system that allows you to interact with it, it is not worth having. What sort of support structure will be going in there?
Also—and I keep coming back to the individuals—are you sure you are going to get the right package for that particular student? If you take as an example one disability group, dyslexics—it is the biggest, but it is just one—you find that no two dyslexics are exactly the same. You have every variation, from the way their minds work and intellectual capacity to the type of course they are on. A history student’s support work will not be the same as that for somebody who is doing chemistry: they will need a different interaction; they will need to be trained to use it properly to get that interaction. This will mean an individualised training package and variations around it.
We then have the extra complication of what you have done before. How good is the computer that you are using? How much training have you had in it? How are you taking it on and being supported through there? Unless these factors are brought together, you are not going to get the best out of it. Worse still, we all know from personal experience that if you have something that you cannot use properly, you do not use it. Any money that is provided and any support that is not effective and accessible will basically be ignored. We might then have a situation where the university is in breach of the law. The government help, whenever it comes in, does not work; university help does not work. What are the downsides of that? If the technology is needed, I suggest that there is a very good chance that that individual will drop out of the course or at least underachieve. If they drop out, the university could find itself losing two or three years of fees and having a hole in their structure and funding. The person who drops out might not know what to do with the rest of their life. We also know that disabled people need to be better qualified to get jobs at all. So we have a nice little downward spiral setting in there. That is if you have not focused in on getting the best out of the system.
As we go around looking at this, we have to try to get some idea of exactly how the Government’s thinking is going through: what is going to happen next? If you are not going to require universities to have an individualised package—funding that supports that individual to get the best out of it—are you going to do something else? If you are, what? Do we continue with the same scheme, better audited and slightly better organised? Or are we going to go back to the universities? If we are, we have got to say, “You’ve got to deliver something that is user-friendly”. If it is not user-friendly enough to make sure that people will use it, do not bother.
Universities are very odd beasts; they run themselves. Are we going to make sure that there is a universal standard throughout the sector so that no student is restricted in their choice by what that university does? X University could become where you go if you are dyslexic; if you are deaf, you go somewhere else; if you are blind, you go somewhere else. How do we work these in together? How do we make sure that you take your package and you go to the course? The package will help you get through the course. But you need to be trained and you need to have the right technological support—you could say that training probably comes first: you have something that gives you the access point.
Are universities going to have to change their behaviour and impose on their staff changes in behaviour? Access to lectures is one of the big points. I gave up on lectures, so I really cannot comment too far on that; there again, in history, if you read the right textbook or, better still, get somebody else to read it on to a tape recorder—he said, claiming his own experience—it is a better way forward. Access to lectures is seen as being a very important part of many university courses. How are we going to make sure that academics interact with technology in storing information? It is just another way in which these pulls and pushes take place.
I could go on for a considerable time about this, going into more and more detail, and I am aware, as I just said, that dyslexia is not the only show in town, although it is the biggest group. How are we going to make sure that the new scheme works for the individual student? How can we guarantee standards so that they can access and get through?
Let us take a quick glance sideways now. We have just done a great deal of work on the Children and Families Act, making sure that further education and education generally support you until the age of 25. We did not touch universities, and were told that we were not going to touch them, because we had the disabled students’ allowance. We also have Access to Work, which runs another series of standards where you take on things that make you work independently—an important part of this scheme. Is that tying in as well? Unless we bring all these things together, we will ultimately fail and let down these people and waste money. I suggest that that is something we do not want.
Lord Lipsey (Lab)
My Lords, debates in this House are always at their best when we hear the voices of experience, and we have just heard that from the noble Lord, Lord Addington.
I am going to make only one political point and it is this. Some of us are very concerned that this change was scheduled to happen last year—these things happened in sequence—but there was a big National Union of Students demonstration at a time when student-dominated seats were expected to be very important in the general election and the change was postponed to next year.
I hope that the fact that there is not an imminent general election now will not affect in any way the Government’s verdict on the consultation.
I do not think it can be denied that if the disabled students’ allowance goes, there will be a disincentive to universities and higher education institutions to take disabled students. I should declare an interest as chair of the Trinity Laban Conservatoire of Music and Dance. We are particularly affected because, although about 11% of students at all HEIs have a reported disability, 21% of our students are affected by a disability and 16% claim DSA. Most of them suffer, like the noble Lord, Lord Addington, from dyslexia.
People might think, “Oh well, that’s all right. It’s only musicians. It’s only arty-farty types. It’s not going to affect the country if they can’t have an education, or the talent pool is limited”. At Trinity Laban, 99% of our graduates are in work or further education six months after graduating. That is in the top three in the country, ahead of Oxford, Cambridge, the London School of Economics and all the Russell group of universities. These are people who make a huge contribution to our national wealth as well as our national culture.
Let me move from that general picture to the specific. I think of Lewis Raines, an outstanding young man who is president of the student union. He is the most capable member of my governing board. He contributes enormously. How he gets through all the papers for the board, I am not quite sure, but he does. He had an early diagnosis of a severe learning disability—namely, dyslexia. This is how he describes his experience:
“I was first granted DSA whilst studying a BA (Hons) in Musical theatre at the Blackpool and the Fylde college. I had previously whilst at Rossall school been given a reader and scribe for my exams and now with DSA support I was given the opportunity to pursue my goal of getting a degree and becoming an opera singer. The fantastic equipment I was given let me record my lectures, I could speak vocally into my computer to write my essays and was given additional one to one assistance with a tutor for two hours every week to work on my English language. I graduated with 2.1. This gave me first of all the confidence to believe I could study at a top conservatoire of music. When I came to London to study at Trinity Laban I still could not read music or for that matter read another language. However I was just so grateful for DSA, the work and support they gave me helped me get a 2.1 because I had additional hours of coaching. I can’t sight read music but I am so glad to have been able to have one to one coaching from my teachers Alison Wells and Helen Yorke funded by DSA.
Without the DSA I don’t think I would have a degree today and I don’t think I would have ever been here as the president of Trinity Laban. The work and support I was given I will forever be grateful for”.
I am sorry that Lewis cannot be here because, if noble Lords met him, they would realise what a loss it would have been if he had not had the education that has set him on course. He will be a huge contributor perhaps in music, perhaps more widely to our society. His is just one of many cases. One of our students has just won a major jazz award thanks to DSA. David Toole was a leading dancer at the Paralympics thanks to DSA. We have the Candoco Dance Company of disabled people, and they are able to work only thanks to DSA. I think I am seeing the personal benefits that these students derive from the current DSA system, and I am extremely concerned that we should be moving away from it.
Trinity Laban already spends £100,000 of our own money in helping disabled students, in line with our legal responsibilities. That is quite a large sum for an institution with a turnover of only £23 million. If the Government go through with some of the changes that are being canvassed, we reckon that that figure could roughly double—we would lose anything from £50,000 to £150,000. That would be extremely significant to a small arts institution such as ours. We do not have hidden pots. There is not a purse stuffed up the principal’s sleeve. We have a very limited income, and it would be extremely difficult to cope with a loss of DSA. The obvious way of coping would be to find ways of cutting down on our numbers of disabled students.
I am afraid that the Government have rather a habit of arguing like this: “We must cut the deficit. But we will be unpopular if we do the things that cut the deficit so someone else must cut the deficit”. We see this with local authorities every day of the week. The cuts in government spending are much less than the cuts the Government are forcing on local authorities, and I am nervous that this is another such case.
I am sure that the DSA scheme can be improved. I am not against reviewing it. I am worried by some of the wording used for that review. When I hear “rebalance”, I know precisely what the Government mean—less cost for the Government, more cost for institutions. I could go through their consultation paper finding case after case of that sort of language.
At the end of the day we are left with this dilemma—what are we to do? Do we help people like Lewis or balance our budget? It is not possible to find a magic wand that enables us to do both. I give credit to the Government; they backed off once. I hope that they will back off again. I am delighted that the consultation documents says in paragraph 11:
“If any changes result from this consultation”.
It does not say that changes “will” result from the consultation. I do not think that the Government would find it good business in any sense to mount an attack on disabled people, who do not come into any of the categories of people getting welfare benefits whom the Government do not so easily support. I hope that the essentials of the existing DSA system, tweaked and tuned as it might be, remain in place after this review and that people like Lewis will therefore go on being able to receive an education that equips them to contribute to our society.
Baroness Thomas of Winchester (LD)
My Lords, I both congratulate and sympathise with my noble friend Lord Addington, who secured the debate at short notice. His experience in this field is invaluable. My starting point is the report that has just been published by the Equality and Human Rights Commission Is Britain Fairer?. Under “Education”, it says:
“Disabled people are less likely than non-disabled people to have a degree qualification (16.7% compared to 31.4%). This was also the case in 2008. However, compared to 2008, the percentage having a degree level qualification had increased more for the non-disabled group (+7.6%) compared to the disabled group (+4.9%). This has resulted in the gap between the two groups being larger in 2013 compared to 2008”.
Is this really the time for changes to the DSA which are likely to make that gap larger than ever? Disabled people and the country need many more disabled people to obtain degrees to enable them to get good and fulfilling jobs. If the Government’s stated aim is to halve the number of disabled people who are unemployed, are they really going about it in the right way?
One of the problems about preparing for this debate is knowing exactly what is going on with the DSA. The consultation closed on 4 September this year and I would like a firm assurance from the Minister that this was a genuine and not empty exercise to close off the possibility of judicial review.
The Minister for Universities, Science and Cities, Mr Greg Clark MP, made an announcement on 12 September last year that the changes to the DSA would be delayed until 2016-17. He said that the Government were going to explore certain issues and work with institutions and stakeholders on other issues, but it would help everyone if we knew at what stage these negotiations are. Can the Minister say whether her department is in contact, for example, with the Equality and Human Rights Commission for guidance in this area, or with the Office for Disability Issues in the DWP, or with the Government Equalities Office?
It does not surprise me that the Government want universities not just to rely on the DSA to make certain non-medical reasonable adjustments for disabled students, such as the cost of a helper, that perhaps they should make themselves. In fact—here, I am afraid I shall divert slightly from the DSA—I have some sympathy with the Government over reasonable adjustments. These have been required since the Special Educational Needs and Disability Act 2001 and should be in place by now as a matter of course. All lecture halls, student unions, libraries, ICT suites and halls of residence surely should be accessible by now, with safe ramps, dropped kerbs, lifts, good lighting and clear signage being provided as a matter of course. However, we all know that this is far from the case. This is why the words “reasonable adjustments” are characterised as anticipatory. In other words, it should not be left to disabled students to request them; they should be provided in anticipation of their necessity for disabled students.
However, I acknowledge that the word “reasonable” is not always easy to interpret in all cases, particularly for those with hidden disabilities, and has to be considered in each case. Some want the word defined more clearly but others recognise that flexibility is more important. What is clear is that universities—or perhaps I should say HEIs—vary widely in the facilities they offer disabled students.
We are lucky to have an invaluable report compiled two years ago by the Trailblazers, a group of more than 600 young disabled campaigners from across the UK who report on all kinds of issues affecting their lives, from access to higher education to housing issues and leisure opportunities. Their report, University Challenge 2013, highlights existing problems that could be exacerbated by the proposed changes to the DSA, including the varying levels of support offered by different universities; the reliance on the allowance to enable a levelling effect of support for those living in poverty; and the disparity between undergraduate and postgraduate allowances. The Trailblazers are part of Muscular Dystrophy UK and make the point that neuromuscular conditions are progressive and that the support students need is likely to vary from year to year.
The situation is not all bad. The survey they carried out two years ago showed that 90% of university disability advisers were found to be helpful, and 90% said that universities made adjustment to improve access to lectures. However, three-quarters found that organising care from the local authority was not straightforward, and 30% felt limited in where they could study because of concerns about their care packages. Time precludes mention of more of their findings but I hope the Minister’s department has this report, which I am sure it would find useful.
One of the most important of the proposed changes concerns the provision of computers, as we have already heard. I gather that for this academic year the DSA can be used to help with the additional cost of a computer and assistive software if needed solely because of the student’s impairment, although the student will have to find the first £200. Printers and consumables—whatever they are—will not automatically be provided by the allowance. Those students without their own computers will be expected to use the computers provided by the universities, but only just over half the universities surveyed have full access to study rooms, including libraries and computer labs, thus putting disabled students at a clear disadvantage. It puts disabled students from poor backgrounds at a double disadvantage. It is also at odds with the Prime Minister’s goal for increasing not only students from BME backgrounds progressing to higher education by 20% by 2020, but also for doubling the proportion of people from disadvantaged backgrounds entering higher education by the end of this Parliament. What about setting a goal for disabled student numbers to increase?
Baroness Garden of Frognal (LD)
My Lords, I join other noble Lords in thanking my noble friend Lord Addington for introducing this debate and giving us an opportunity to discuss the disabled students’ allowance. I feel sure that, given longer notice, many more of your Lordships would have been drawn into discussion of such an important issue.
My noble friend is a long-standing champion of disability rights. He has pursued measures that have improved the rights and opportunities of those who have to overcome disability before they can prove their talents and achieve their ambitions. His focus on dyslexia is ever more relevant; that unseen disability afflicts more people than was recognised in days gone by, and it is always heartening to hear of the achievements of people who have had to struggle from a young age to access learning, with barriers not faced by their non-dyslexic peers. My noble friend is a tenacious champion on their behalf.
My noble friend Lady Thomas also speaks compellingly on behalf of those with disabilities. As we know, the disabled students’ allowance is a non-means-tested, non-repayable grant provided through Student Finance England to help eligible higher education students pay the extra costs incurred as a direct result of a disability, long-term health condition, mental health condition or specific learning difficulty, such as dyslexia or dyspraxia. It is a wide-ranging allowance, which is one of its great benefits, and it takes into account the very wide variety of disabilities that students may have. It has been invaluable in encouraging students to succeed, because those covered by it may be every bit as intelligent and ambitious as others, but may be able to achieve their potential only with the help of additional personal, technical or financial support. The DSA is the means to that end. My noble friend Lord Addington made a powerful case about the imperative for equipment to be of good quality.
For this debate, we have received many helpful and informative briefings from the Library and from many individuals and organisations who have direct experience with disabled students and who know the disruption that changes may bring. Widespread concerns have been expressed at the transfer of certain responsibilities to institutions. The National Union of Students—which the noble Lord, Lord Lipsey, has already referred to as a powerful lobbying group—has set out its essential criteria for support for disabled students, which should be,
“high quality, timely, individualised, consistent ... and with appropriate and speedy mechanisms for appeal and redress”.
Could the Minister say how the Government propose to monitor the support against these criteria, given the numbers of higher education institutions which each will be interpreting the needs of students in their own way? Some will face the challenges of having insufficient financial resources or expertise to deal with changes to the system.
There are further complications with collegiate universities, where we have seen individual cases in which problems have arisen. Individual colleges will be dealing with small numbers of applicants and there may be significant variations in funding depending on the relative wealth of the college. What advice and support will come from the Government to ensure fairness in any new provision?
We have raised before in your Lordships’ House our concerns over support for part-time higher education. This provision plays a key part in enabling people to access high-level skills and increase their personal fulfilment, as well as their contribution to the economy.
We hear from the Open University—which supports around 20,000 students with at least one disability—of its concern that reductions in funding for disabled students will have a considerable effect on the opportunities for part-time students. In addition, there is a deterrent factor if there is uncertainty about the support that might be available to them. The Open University has done a magnificent job over years in providing opportunities for all sorts of people who may have missed out the first time round or may have found more difficulty in accessing mainstream education in different ways.
The discussion of changes may already be acting as a deterrent to those who have enough challenges to overcome without also being unable to plan ahead for future studies. Disability Rights UK has already identified that more disabled people are questioning the wisdom of going to university.
As the noble Lord, Lord Lipsey, set out so clearly and movingly, many arts-based institutions have higher proportions of students eligible for DSA, whose disability in one way can result in increased talent in another, such as art or music. They could well be disproportionately affected. We also know that the creative industries are a source of immense pride to this country, as well as being of great benefit to our culture and to the economy. What reassurances can the Minister give to such institutions that they will not find difficulty in enabling their students to succeed?
We have evidence that it is in all our interests to enable disabled students to continue their studies and gain qualifications to equip them all the better for competitive life. It was striking to read the research carried out by the Equality Challenge Unit, which showed that the prospects for disabled graduates are significantly better than those for non-graduates. The figures for 2012 showed that 71% of disabled graduates gained employment, compared with only 42% of disabled non-graduates, and that is with all the benefits of skill-based qualifications and so on that might have been available to them. Surely it is in all our interests to ensure that provision is available for those with talent and commitment who need some specialist help to get them over the hurdles.
It was reassuring to hear that maximum grants for full-time, part-time and postgraduate students with disabilities will be maintained at 2015-16 levels into 2016-17, but students and institutions need to plan ahead, so reassurance for another year is only a temporary solution. Can the Minister reassure the House that no full-scale changes will be made until an impact assessment has been undertaken? As has already been indicated, it will be a false economy if reforms to these allowances turn out not to be the improvements the Government are hoping for, but result in an increase in disabled students unable to study or to work. I look forward to the Minister’s reply.
Baroness Hayter of Kentish Town (Lab)
I too thank the noble Lord, Lord Addington, for securing this debate, which gives us the chance to hear from the Government whether they really are committed not just to maintaining but to increasing the chances for disabled people to go to university, as suggested by the noble Baroness, Lady Thomas. It is perhaps more important for disabled people to go to university, as throughout life this will help their development and the contribution they can make to their own and others’ lives. Indeed, they seem to be better able to make the most of the opportunity, even though most of course get DSA at well below the maximum levels, the average being just over £2,000.
Disabled students who get DSA are more likely to graduate, and with a first or 2.1, than disabled students without the grant. Perhaps more surprising is that students with DSA are slightly more likely to graduate, and with a good degree, than non-disabled students, so it is a high return on a small investment. However, the proposed changes to DSA have worrying implications, partly because of the variation between institutions in attracting disabled students. While almost 7% of full-time undergraduates get DSA, this varies from 2% to 30% across different universities. In 60 universities, the percentage exceeds the average, with more than 10% of students being disabled in 24 of them. The higher numbers tend to be in modern universities with the best record of widening access.
As has been mentioned, part-time participation is particularly vital. Just last week, the Higher Education Policy Institute showed the role that part-time education plays in boosting productivity, contributing to economic growth and driving social mobility. As the noble Baroness, Lady Garden, has said, it is the Open University which supports more disabled students than any other, showing the importance of its part-time and open access to this group of students. But these very numbers, and the OU’s dedication to widening access, mean that any reduction in DSA or indeed in student opportunity allocation which is based on it, will have drastic implications for disabled people seeking to improve their employability and life experience through study and qualification.
That brings us to the problem of moving responsibility for DSA from HEFCE to the individual university without transferring the funds. The only way forward will be for universities to have to rob Peter, in this case non-disabled fee-paying students, to pay Paul, disabled students. It also means, self-evidently, that those universities which have done the most to attract and cater for disabled students will be penalised the most, with significant burdens on those with the highest proportion of disabled students, often the smaller ones or conservatoires, as described so movingly by my noble friend Lord Lipsey. More than that, given that the separate institutional funding for disabled students through HEFCE’s student opportunity fund depends on the number of DSA claimants at the institution, a change in DSA numbers would affect that overall level of support or else its distribution. Could I therefore ask the Minister whether she expects funding through the student opportunity fund to a university to decrease should the number of DSA recipients decline? Furthermore, since BIS is an unprotected department with regard to government funding, how important does she consider this element of BIS expenditure to be?
The particular government approach, that of basing future payments on Equality Act definitions, is also problematic, with much turning on the definition of what “reasonable adjustments” for the individual are to be made, possibly leading to disputes between students and their colleges. There may be uncertainty at the point of applying or in the early days of study, and possibly the need for court definitions, and importantly, variation between institutions as some may be more generous in interpretation than others. Under the proposed new arrangements each individual student will have to negotiate the package of measures they get from their particular university. In contrast to what happens at present where there is a statutory framework there will be no overarching agreements, so where will the statutory rights be located and what rights will the individual student have?
There is a risk that the DSA changes could leave universities without sufficient investment to support disabled students throughout the whole of their course, particularly in exactly those places which have done most to open up opportunities for disabled people. There is a very real risk of uncertainty, particularly for those eligible to apply from January, by which time they really need to know exactly what help will be available to them for the next three years. Can the Minister therefore tell the House whether the Government have assessed the cumulative impact of changes in funding to understand the effect on students and on each institution? What estimate have they made of the financial impact on institutions of passing some of the DSA responsibility to them? And, most importantly, what thought has been given to the potential consequences of moving from central to institutional funding for disabled students in creating what I called a perverse incentive and what my noble friend Lord Lipsey said was a disincentive on universities, possibly discouraging them from making a real effort to increase disabled people’s participation?
As the noble Lord, Lord Addington, said, not all dyslexics are the same. He is living proof of that. As a tribute to him and the work he has done I think the Government should not only take forward their support but also increase the ability of disabled students to play a full part in their own lives by getting to university.
Baroness Evans of Bowes Park (Con)
My Lords, I thank the noble Lord, Lord Addington, for securing this debate and for his knowledgeable and passionate speech and I thank all noble Lords for their valuable contributions. I will attempt to answer the various questions raised. This debate has shown that across the House we all share a vision of a higher education sector which is truly inclusive and gives disabled students the opportunity to achieve their academic potential. I assure the noble Lord, Lord Lipsey, that we want to see the Lewises of the future continuing to get the support they need and continuing to be able to take advantage of what higher education has to offer. Disabled students’ allowances continue to play a key role in that but equally so do our higher education institutions and it is important that disabled students receive an appropriate level of support wherever and whatever they choose to study.
Students should arrive at university in the knowledge that as much as possible has been done to enable them to study effectively and that the institution they are attending has done all it reasonably can to ensure this. Of course, there will be occasions where an institution cannot do everything and DSAs will remain available to help students where this applies. In response to the questions of the noble Lord, Lord Addington, about individuality, DSAs will continue to provide individual support to overcoming barriers that inclusive learning and reasonable adjustments, which I will come to in a minute, do not address. I remind noble Lords that the DSA system has always been designed to fund only the additional costs a student is obliged to incur in relation to their studies by virtue of their disability. There has always been an expectation, as the noble Baroness said, that universities should make reasonable adjustments so that a student will not have to seek support through the DSA system for support that is or should be being provided by the university.
A number of welcome changes have been made over the past few decades that have opened up higher education to disabled students and we have heard them mentioned today. The Disability Discrimination Act 1995 and the Equality Act 2010 introduced clear duties for institutions around reasonable adjustments, so higher education institutions have had such obligations for a considerable amount of time. Many institutions have responded positively to these duties; however, it is important that all are ambitious in striving for an inclusive learning environment and aspire to the very best practice to improve the services and support they provide to disabled students outside the DSA system. The Government currently spend over £145 million through DSAs to help individual students overcome barriers to their education. We believe that innovative approaches by institutions can reduce these barriers further over time.
Noble Lords will also be aware that disabled students’ allowances are administered in a way that has not fundamentally changed since the 1990s, yet, of course, there have been significant technological changes since then which have transformed opportunities for all students, including disabled students, enabling them to access information and technology in a way not previously envisaged. For instance, many items that were considered specialist support, such as laptops, are now mainstream items, with access readily available in universities. Expenditure on DSAs has increased year on year, with an increase of around 44% over three years to 2012-13. We therefore feel that reform is necessary to modernise the system and ensure value for taxpayers’ money in this new landscape.
As we have heard, we have recently consulted the sector on how to balance the responsibilities between DSAs and institutions, and how this can be achieved. However, I make very clear that the Government are not proposing to abolish DSAs. Rather, we have consulted institutions about how they might play a more active role in supporting their students. It is intended that DSAs will remain available to complement the support provided by institutions and that students will continue to receive the support they need.
Standards and guidance have been mentioned. We certainly propose to encourage sector organisations such as Universities UK and GuildHE to work with other sector stakeholders to identify, promote and disseminate best practice in inclusivity, so that we can ensure universities can learn from each other and that students do not suffer.
The Government propose that certain types of human support, for example note-takers and library assistants, become the responsibility of institutions. We believe that institutions can do a great deal more to make information and the learning environment more accessible to students and that it should no longer be necessary to provide individual one-to-one support in all cases. But where individual support is necessary, institutions should consider how best to meet that need and should explore innovative approaches to providing that support.
We also expect that institutions will no longer pass on the additional costs of specialist accommodation to their students in the expectation that DSAs will cover that cost. We are considering the continued need for DSA to fund individual items of equipment, for example printers, as we have heard, and have consulted on how other support might meet that need—for example, alternative format materials. While the provision of assistive technology was not subject to consultation, it was an issue raised by the noble Lord, Lord Addington, so I will respond briefly to it. Officials already work closely with sector representatives through the Disabled Students Stakeholder Group IT subgroup to ensure that products available through DSAs are fit for purpose. We will continue to work with these and others as new options for procurement of assistive technology are explored. The Government welcome, and want to continue, working with both the assistive technology sector and mainstream technology manufacturers to ensure that the products they produce meet the needs of disabled students. I reassure noble Lords that we do not propose changes to more specialist forms of support—for example, the provision of British sign language interpreters.
The consultation has now closed. I again reassure the noble Baroness, Lady Thomas, that we are indeed taking it seriously. We have received just over 200 responses from a wide range of stakeholders, including students, members of the public, higher education institutions, disability charities and DSA assessors and providers. This wide range of responses has provided a great deal of information for consideration, which is currently being analysed by the department, as is the additional evidence received which will inform the ongoing equality analysis. I confirm that the department is indeed talking to the Office for Disability Issues. We are already in discussion about the consultation. I am certainly happy to commit that the other organisations the noble Baroness mentioned will obviously also be involved.
Officials are looking at introducing a benchmark for inclusivity and providing better information to students about their institution’s provision for disabled students. It would be wrong of me to pre-empt the outcome of the consultation, which has yet to be considered in full by Ministers. However, I can tell noble Lords that the Government expect to publish a response to the consultation before the end of the year, with the implementation of any changes taking place from 2016.
The noble Baroness, Lady Garden, asked a couple of questions. Again, I do not wish to prejudice the outcome of the consultation, but officials will be looking at how to evaluate and monitor how institutions are responding to the potential changes, and a full equality assessment will be undertaken before the changes are introduced.
As regards some of the more specific questions on funding referred to by the noble Baroness, Lady Hayter, if it is all right with her I will write to her with a bit more detail. I am afraid that I do not have all the figures to hand, and rather than giving her a small answer I will attempt to give a fuller answer in a letter.
In conclusion, the Government remain committed to supporting disabled students to access higher education. Students are right to expect support from their higher education institution and DSAs have been available to complement that support for nearly 25 years. That is not changing. What is changing is the balance between the two sources of support. The changes that we are proposing reflect our desire to modernise DSAs, to ensure value for money and to reflect our expectation that institutions will fulfil their duties under the Equality Act. Our changes will see a DSA system that is sustainable, fit for purpose and targeted at those with the greatest need, and, most importantly, that ensures that disabled students can continue higher education at whatever institution they wish.
European Union Referendum Bill
(9 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Kerr of Kinlochard
“Report on the United Kingdom’s future relationship with the European Union in the event of withdrawal from the European Union
(1) The Secretary of State shall report on the relationship with the European Union which the Government envisage in the event of a referendum vote to leave the European Union, and on the acceptability of this arrangement to every European Union member state.
(2) The report provided for by subsection (1) must be published and laid before each House of Parliament, no later than 12 weeks prior to the appointed date of the referendum.”
Lord Kerr of Kinlochard (CB)
Amendment 24 is in my name and those of the noble Baroness, Lady Morgan of Ely, the noble Lord, Lord Tugendhat, and the noble Baroness, Lady Smith of Newnham—a perfectly balanced ticket.
I begin by saying:
“Those campaigning for Britain to leave the EU and choose the Norwegian way can … correctly claim that a country can retain access to the single market from outside the EU”.
But this means also,
“retaining all the EU’s product standards, financial regulations, employment regulations, and substantial contributions to the EU budget. A Britain choosing this track would, in other words, keep paying, it would be ‘run by Brussels’, and … remain committed to the four freedoms, including free movement”,
of persons. It would, however,
“have given up on having a say over EU policies. Like Norway, it would have no vote and no presence when crucial decisions that affect the daily lives of its citizens are made”.
These are not my words but those of Espen Barth Eide, a former Europe Minister in Norway, last week. On his financial point, it is worth noting that the noble Lord, Lord Hannay, correctly pointed out that we are now the ninth largest contributor to the EU budget in per capita terms. The 10th largest is Norway.
If noble Lords do not believe Mr Eide, they might try the Norwegian Conservative Party’s current EU spokesman, Mr Nikolai Astrup. His advice is simple: “If you want to run the EU, stay in; if you want to be run by the EU, feel free to join us in the EEA”.
Lord Forsyth of Drumlean (Con)
Could the noble Lord tell us on how many occasions in the last five years we have expressed a view in opposition to a particular EU policy and on how many occasions we have been defeated in percentage terms?
Lord Kerr of Kinlochard
I am afraid I do not work in the British Government and do not have the statistics to hand. However, it is the case that a large member state such as the United Kingdom, with a voting weight proportionate to its population, has a considerable say in EU legislation. An EEA but non-EU member state, such as Norway, has none whatever.
Lord Hamilton of Epsom (Con)
Can the noble Lord explain the free trade treaty between the EU and South Korea? Does it bind South Korea to following all EU legislation?
Lord Kerr of Kinlochard
I had assumed that the principal interest of the noble Lord, Lord Hamilton, was making sure that we managed, as some sort of country member or associate, to remain within the single market. The Koreans have no such rights. They have a very good free trade agreement, which is greatly in the UK’s interest, and has produced a considerable increase in UK exports to South Korea.
There is no doubt that the UK could secure a free trade agreement with the EU. That is not an issue. But if we want access to the single market, we need more than a free trade agreement. That is why the Norwegians are in what is known as EFTA and the EEA and why they are complaining about their relations with the EU.
The noble Lord, Lord Forsyth, told us that nobody in Norway wants to join the EU. Actually, the entire Norwegian establishment would like to join the EU but has not, as yet, managed to persuade the Norwegian public of that.
Lord Forsyth of Drumlean
It sounds just like us. I have read in a newspaper—so it may be wrong—that on the last 77 occasions when Britain has sought to amend a provision that it did not like, it has been defeated. Is the noble Lord aware of that? If that is the case, I question whether, by being in the room, we have influence. We have influence only if we are able to persuade the room. We seem to be singularly unable to do so.
Lord Kerr of Kinlochard
I hope I may leave it to the Minister to deal with the allegation that on the last 77 occasions when we have expressed views and wished to change a piece of legislation we have been overruled. I would be completely astonished if there was any truth in that statement.
Lord Wallace of Saltaire (LD)
I may be able to help. Part of popular opposition to the European Union, particularly in northern Norway, is the belief that it is a Catholic outfit and all part of a Catholic conspiracy. This was the case with much of the anti-European Union efforts when we first applied, but it is slightly below the surface now in Britain and rather more on the surface in Norway.
Lord Kerr of Kinlochard
I do not think I will follow the noble Lord, although I am grateful to him. The Norwegians are not happy with their relationship with the European Union, and no wonder their Prime Minister told us last week that it would not do for us. I entirely agree with him. Before the electorate are asked to decide whether we should leave the Union, they clearly need to know where we would land if we did, what new relationship with the rest of Europe the Government envisage and how certain they are that it would be obtainable—hence my amendment.
If it is not the Norwegian model, what is it? The Swiss model is clearly worse from our point of view and probably not on offer. The Swiss have individual, sectoral and bilateral agreements with the EU. However, they do not extend to services, our major export, and would take many years to negotiate. Both sides—the EU and Switzerland—agree that the arrangement is unsatisfactory, complex and unwieldy.
Lord Stoddart of Swindon (Ind Lab)
Why do the noble Lord and other people keep referring to the “Swiss model” or the “Norway model”? They are not relevant to this country. What we want is a British model. We are of the size and the importance, including the historic importance, to be quite different from, and to negotiate a much better agreement than, either of those two small—but highly successful—countries.
Lord Kerr of Kinlochard
I must ask the noble Lord not to be carried away by the impetuosity of youth. I will come to his point in a moment. The Council, with the UK concurring, agreed 18 months ago that the relationship with Switzerland should be put on a new institutional basis and be overseen by the Commission under the judicial control of the European Court of Justice—although there would not be a Swiss Commissioner or a Swiss judge in the European Court of Justice. That would be a more onerous regime and even less satisfactory to us than the arrangement agreed 20 years ago for Norway, Iceland and Liechtenstein. One could look at the Turkish model, but there you have no access to the single market at all. There is a customs union, but that means that Turkey has to apply EU customs tariffs against third countries and has no say in setting them. The Turks find the relationship highly unsatisfactory; it would be doubly unsatisfactory for us.
A free trade agreement or an association agreement between the United Kingdom and the EU would certainly be possible, and there are plenty of precedents for it. I do not think it would be particularly difficult to negotiate, so I am with the noble Lord, Lord Hamilton, to that extent, but it would not provide the access to the single market that I thought was the object of the exercise from our point of view. Let us bow to the noble Lord, Lord Stoddart, on this: if the EU were to decide that it needed to make an exception for us—I do not think it would, as so many would want to follow suit if it did—and gave us what we sought, its price would undoubtedly be our agreement to follow its labour market rules, health and safety rules, product standards, consumer protection laws and technical specifications. It will not agree that our goods should freely circulate in its single market if they do not meet EU standards. That is not an unreasonable position, and that is the one the EU would take. We would of course have lost our say in the setting of these standards.
Lord Hamilton of Epsom
Assuming the United Kingdom decides to leave, Europe will surely be somewhat concentrating its mind in these negotiations on the fact that it sells one and a half times as much to us as we do to it. The idea of it having some kind of stand-off with the United Kingdom and it saying, “We’re not going to trade with you at all” is almost unthinkable bearing in mind the astronomical levels of unemployment, particularly youth unemployment, in the EU at the moment.
Lord Kerr of Kinlochard
The impetuosity of youth is spreading all around the Chamber. The point will be addressed in a second.
If we had no structured relationship with the EU and operated purely as WTO members, the damage to our exports and inward investment would come more quickly, since UK exports to the EU would become subject to EU tariffs straightaway—10% on cars, 15% on food products and so on. We would also lose the benefit of the EU’s 200 or so trade agreements with third countries and regional groupings and we would need to negotiate our own.
Maybe there is too much Nordic gloom and doom in my analysis. Maybe the noble Lords, Lord Forsyth and Lord Stoddart, are correct. Certainly, that great Scottish economist, Peter McKay, writing in today’s Daily Mail, finds my analysis defeatist, but it is possible that the Norwegians know what they are talking about. Maybe we could, to address directly the point of the noble Lord, Lord Stoddart, secure a new sui generis deal more generous than any that the EU currently has with anybody. Maybe we could forget all these models and establish the new Union Jack model. It is true, as the noble Lord, Lord Hamilton, says, that we would have some cards in our hand. Some 6% of exports from the rest of the EU come to us and we could threaten to cut them off, so pleasing Mr McKay in the Daily Mail, if not the British consumer. However, we need to face facts—four facts. First, 6% of their exports come to us—3% if one excludes the Netherlands, Germany and Ireland—but nearly 50% of ours go to them. In a protectionist showdown, we would be shooting uphill. They would be facing a blip; we would be fighting for our lives.
Lord Hamilton of Epsom
The noble Lord talks about a blip. We are talking about 4.5 million Europeans losing their jobs, on top of the astronomically high levels of unemployment they have now. If that is a blip, I am very glad that the noble Lord does not advise me on economics.
Lord Kerr of Kinlochard
I do not recognise the figure of 4.5 million. Maybe the noble Lord is assuming that exports that did not come to Britain, because we erected a protectionist barrier against them, would not go somewhere else in the world. It is a static analysis.
Lord Stoddart of Swindon
The noble Lord mentioned that we export 50% to the EU. That is a figure I have not heard before. It is usually 40%. Can he confirm the 50%?
Lord Kerr of Kinlochard
No, I cannot confirm it. I think I said nearly 50%; that is what I understand. It is over 40%; I think it is nearly 50%, but the noble Lord may be right.
Secondly, half the trade surplus of the EU with us is accounted for by the Netherlands and Germany. Among the other 25 member states, a considerable number run a trade deficit with us. They might be less generous in the sort of showdown—dreadful thought—that I am talking about. Their withers might not wrung quite so much by Mr Peter McKay’s threats.
Thirdly, it would be the Commission across the table from us, because what we would be negotiating—if, under Article 50, the withdrawal clause of the treaty, we were negotiating our withdrawal—would be a treaty not between us and the other member states but between us and the EU. The Commission would, I think—it has always said so—attach particular importance to retaining the EU’s decision-taking autonomy, if only to prevent Norway and all the other neighbours, all unhappy with their present, subordinate status, seeking to secure the seat at the table which we would be seeking.
Fourthly, the procedures under Article 50, paragraph 2, become highly relevant. The Commission would need to secure a qualified majority in the Council for any deal that it struck with us. We of course would have no vote. It would also need the approval of the European Parliament and the Commission would be operating on the basis of guidelines laid down by the European Council, which would operate by unanimity. Yes, we would have friends and advocates, and yes, there would be bits of German industry that in practice would be lobbying on our side in this debate, but everyone would have to be on board, and unanimity in the European Council is what we would need to secure. That is why my amendment asks the Government to report to the electorate before the referendum, not just on what form of relationship they would envisage between us if we left, and the EU that we had left, but on its acceptability to every remaining member state. I beg to move.
Baroness Smith of Newnham (LD)
My Lords, I very much support the amendment in the name of the noble Lord, Lord Kerr. It is important that we think about the implications for the UK of its relations with the EU, should there be a vote to leave it. Before dinner, we heard of concerns about fear and claims that the pro-Europeans wanted to talk about withdrawal and its dangers only because we wanted to whip up fear. There is a danger that comes from Eurosceptics such as Dan Hannan, who says, “You pro-Europeans invent things. We don’t want to be Norway”. That is certainly something that was suggested in your Lordships’ House at Second Reading. The noble Lord, Lord Stoddart of Swindon, has already suggested today that the UK does not want to have a Norwegian model or a Swiss model; it would like its own model. In order for the citizens of the UK, and anyone else who may be enfranchised in the forthcoming referendum, to understand the implications of what they are doing in the vote, it is important that they have an understanding, and that the Government make clear, what the implications of leaving would be for our relationship with the EU.
The noble Lord, Lord Hamilton, intervened earlier on my noble friend Lord Wallace of Saltaire to ask whether arrangements could not just carry on as they are if the UK were to leave the EU. That strikes me as a very strange sort of club. If you say to your golf club, “I’m not going to pay my dues any more; I no longer want to be a member of this club”, it is not going to say, “That’s fine, you can come and play golf again on Sunday”.
Lord Hamilton of Epsom
We were actually talking about the arrest warrant and the legal arrangements that we have. There seems to be no reason why those should not be negotiated to continue as they were before.
Baroness Smith of Newnham
I thank the noble Lord for his comment. It would indeed be perfectly possible to negotiate a whole range of things associated with access to the internal market, the European arrest warrant and many other aspects of the relationship that the UK currently has with our European partners. However, we would need to consider, and the Government would need to be able to explain, in what areas they would envisage having relationships with the EU.
The idea that things could just carry on as before, as was suggested in a previous group of amendments, is rather complacent. Legislation that the UK has on its statute books would certainly persist, and on day one it might look very similar, but with regard to access to markets there is no reason whatever to assume that the EU 27—particularly acting by unanimity on Article 50, which the noble Lord, Lord Kerr, has just referred to—would simply say, “The United Kingdom is so important to us that we will give it free access to our markets”. There would have to be negotiations, and there is no reason to assume that our current colleagues in the EU would open up the markets without extracting some sort of quid pro quo with some sort of agreement. I know it is not palatable to everyone to hear yet again about the European Economic Area, but looking at those relationships reveals that the member states of the EEA have effectively signed up to a huge amount of the EU’s acquis but without a seat at the table. They have to accept what the EU agrees.
The United Kingdom may be out-voted while we are a member of the European Union but if we play our cards right as a member we can negotiate, we can work with partners and we can amend legislation. On the outside we would be policy-takers and we would be doing what the European Union asked us to do. If we felt it was in our interests we might sign up to it but the costs are likely to be significant. If we engaged in a relationship that looked like a Norwegian model, we would end up paying into the Union budget, taking policy and having even less influence than now.
Noble Lords may say that I say that only because I want Britain to remain in. I am simply suggesting that it is important for citizens of the United Kingdom to understand the implications and that the Government should make clear what the implications of leaving would be and how they envisage the relationship of the United Kingdom with the rest of the European Union.
On Amendment 32A, could the Minister bring back to the Committee some thoughts on how the Government envisage the relationship with the Republic of Ireland if there were a vote to leave the European Union? That relationship is sui generis. The relationship between the Republic and Northern Ireland and the fact that there is currently no land border would be fundamentally changed. Withdrawal has implications for the United Kingdom and this one particular close neighbour in the European Union. I ask the Government to look again at that relationship.
Lord Liddle (Lab)
My Lords, Amendment 26, in my name, is of similar import to the amendment of the noble Lord, Lord Kerr. Mine, of course, is a political adviser’s amendment. It is sloppily drafted and not the expert amendment that you would expect of a senior Eurocrat; therefore, I am happy not to move my amendment in favour of that moved by the noble Lord. In my view if we wanted to educate the public about alternatives to EU membership we could do a lot worse than to ask the Government to send a printed copy, suitably amended, of the speech by the noble Lord, Lord Kerr, to every household in the country—I thought it was brilliantly argued. We are going to hear a lot of these arguments in the coming year, and I shall not reiterate them now.
I want to make a couple of observations which I think are relevant. First, on the arguments about Britain’s strength to negotiate its own arrangements, I used to think in the same way as the noble Lord, Lord Stoddart. When I was a young man I am afraid I rather bought into the line of the German Social Democrat leader of the time, who described the Common Market as a conservative, cartelist, capitalist, clerical conspiracy. I was rather of that view but when I learned about it and read its history I realised that the Macmillan Government tried very hard in the 1950s to negotiate the kind of free trade agreement which the noble Lord, Lord Hamilton, thinks is the solution to all our problems, but they came to the conclusion that it could not be done. The only possible alternative for Britain was to become a full member alongside the original six. I think that that judgment, which was made around 1959-60, is still sound, even though the European Union has transformed itself. So, too, has our economy. When I listen to some of the arguments of the anti-Europeans here, I think they still think in terms of British companies exporting to Europe.
Lord Forsyth of Drumlean
I am not aware that there are any anti-Europeans here. There may be people who are anti the European Union; these are not the same things.
Lord Liddle
I take the point. The noble Lord has thrown me off my path. I was saying that the nature of our economy has changed and that sometimes when I listen to these debates I do not get an appreciation of that. The fact is that Britain has benefited more from European Union membership than virtually any other member, and has done so through attracting inward investment to the United Kingdom from all parts of the world. This has been a tremendous boost; it has been the only successful industrial policy we have had since the era of Margaret Thatcher; she was the one who first started it, and it has worked. That has meant that many British businesses are part of European and global supply chains, and we as a country benefit from hosting many foreign companies here. I often think, when I listen to the arguments, that people just do not appreciate that. Yet, that is clearly the major economic issue in the debate on membership. If that inward investment, that ability to organise your supply chains across Europe, were to be interrupted as a result of withdrawal and badly damaged, that could seriously deter future inward investment in the UK.
Most of us in this Chamber are pretty passionate in our views about the European Union, for and against. However, we also have to remember that most of the great British public are not very passionate about it; in fact, the great majority do not regard it as the most important issue in the world at all. Most opinion polling suggests that only about 10% of the voters are worked up about our membership of the European Union. That does not mean that they are pro—I am not trying to argue that. They are genuinely sceptic about the whole issue in a way in which a lot of the people who are anti-European Union in this Chamber, who claim to be sceptics, are not—they are passionate ideologues. However, most of the voters are sceptics, who want to weigh the evidence and be convinced one way or another by the argument.
Lord Hamilton of Epsom
I totally accept the noble Lord’s thesis that this is not a high priority for the British public at the moment. On the other hand, however, he will recollect the time when the Tory party was tearing itself apart over the issue of Europe, and it was certainly a very much higher priority at that time. Does he not feel that as we approach the referendum and the debate rages it will move up in people’s priorities, and that they will take more interest in it?
Lord Liddle
The noble Lord is right about that, but it is the result of dissent in an elite and a particular part of the British political elite. People will get worked up about this because of a vigorous argument on one side of the political spectrum; it is not as a result of massive popular demand from below. However, that is not my point, which is that a lot of people are genuinely sceptic and probably dislike the Brussels bureaucracy a great deal but worry about our future outside the EU. That is where I think that the need for objectivity is very important. Clearly, I am not the right person to make an objective case about the European Union but I still believe that we have a public service in Britain which is independent and can be objective and which can help to frame a rational debate about our membership. That is why I think that the amendment moved by the noble Lord, Lord Kerr, is so important.
I hope that the Minister, for whom I have the greatest respect, and the Government will look favourably on the argument regarding the need for objectivity in this debate and on the argument that the public service can help to bring that to the debate. That is what the public are looking for. I would hate to think that our politics had got to the state of that of the United States, where everything is so polarised that it is impossible to have any kind of meeting of minds or objectivity and rationality in discussions. I think that the senior members of the Government are coming round to a certain view about Britain’s future which I favour, so I hope that they will be prepared to support this call for independent, objective analysis, which is so important for the quality of our politics.
Lord Forsyth of Drumlean
I was tempted to support the amendment of the noble Lord, Lord Kerr. As I listened to his speech, he said, “The Commission is there to maintain the EU decision-making autonomy”. What a ghastly phrase. It suggests that an unelected body has autonomy. The noble Lord, Lord Liddle, said that the speech of the noble Lord, Lord Kerr, should be circulated as part of the campaign. I agree with that because in summary he said, “Look, we’re stuck with this organisation. They’re in charge. If you try to do anything about it, they’ll all gang up against you and throw your people out of work”. If that is the best argument that we can come up with for staying in this organisation, I despair. If that is the position, the sooner we get out the better, because we are being told that we are part of an EU decision-making autonomy.
Lord Lea of Crondall (Lab)
Taking the analogy of Ministers and the UK Civil Service, is the noble Lord saying that if you do not like the word “autonomy” there must be some other word that is not going to be suborned by politicians? With regard to the Office for Budget Responsibility, no one doubts that we are looking for some degree of independence. If the noble Lord does not like the word “autonomy”, how will he handle the problem of not wanting self-interested politicians to give advice—it is people who, in the analogy with Britain, are not politicians?
Lord Forsyth of Drumlean
The noble Lord must go on because he is making my case for me. He is saying that we do not want politicians and that we need to think of another word for “autonomy”. How about “dictatorship”? If by EU decision-making autonomy you mean, “We don’t want politicians”, then that is dictatorship. Politicians, however much they may be despised or disliked, are accountable to the electorate. These people are accountable to no one, and we are now being told that we cannot possibly go against the EU decision-making autonomy.
Lord Kerr of Kinlochard
The noble Lord, Lord Forsyth, is making marvellous campaign speeches; I think that our job is to address the Bill and the amendments. I was trying to give an analytical speech, assessing the various models and the possibility of a sui generis, something-completely-different Stoddart model. When I used the words “decision-making autonomy”, I was using words which are quite common in the Council, in the Parliament and in the court; I was not referring to the Commission.
Lord Kerr of Kinlochard
Yes, I said that the Commission would be the spokesman in the negotiation, but its concern would be to preserve the autonomy of EU decision-making—which the European Council regularly insists on and insisted on in relation to the changes to the arrangement with Switzerland. If you are not a member of the club, you do not have a vote on club decisions. That is all it means.
Lord Forsyth of Drumlean
I will come on to address these points, because I took the opportunity of checking a few facts. For example, just before the dinner break, I did not know why when we were supposed to be discussing what is in Britain’s interest we continued to discuss what is in Norway’s or Iceland’s interest—but, as people have raised it and have said they want facts, I have found the following quote from the Icelandic Prime Minister from June this year. The noble Lord has already read this quote, but he did not put it in his speech. The Icelandic Prime Minister said:
“'For us staying outside of the European Union has been very important, even instrumental in getting us out of the economic crisis so it has affected us in positive ways, giving us control over our own natural resources, but also having control over our own legislation and our own currency, which if we had not had that, we would not be in the situation where we are now with a very fast improving economy”.
When I said earlier that nobody in Norway wanted to join the European Union and I was shot down and told by the noble Lord that the establishment wanted to join the EU, I thought that I had better check what the position was. I found that seven out of 10 Norwegians would reject EU membership and just 19% would like to join. Seventy-four per cent would say no to Norway joining the EU, with 17% wanting to join—these figures are from an opinion poll in 2014.
The noble Lord mentioned Switzerland. According to a 2012 poll for the Swiss Broadcasting Corporation, just 6% of Swiss voters favoured joining the EU against 63% who want the present bilateral arrangements preserved, and 11% who want to join the EEA. There does not seem to be any great feeling in either of those countries that they have made some dreadful mistake; on the contrary, they seem very happy. The Norwegians are very happy with their fish, their oil and their prosperity.
Then we have the bogus argument that says that if you are outside, you have to accept a huge amount of legislation which you would have no say over. I do not know whether the figures in the Daily Telegraph—the noble Lord tells me that that is where they were from—that say that the last 74 times we have objected to things we have been defeated are correct, but those people who argue that we need to stay in to have a say should tell us how effective that say is because the evidence is that it is not very effective. The noble Lord, I know, has conspired with me and other Ministers to turn defeat into an apparent victory in drafting the press release after one such defeat.
Lord Hannay of Chiswick
The noble Lord is very kind. He seems to be a glutton for information. May I recommend that he reads two slim volumes produced by an all-party panel, first in 2014 and then 2015, called The British Influence Scorecard? They looked at every part of European policy and concluded that Britain’s influence in the European Union was considerable. I am sure that he would find that a very enlightening read, and it is not as long as some of the documents around.
Lord Forsyth of Drumlean
I would be very happy to read it; what I would be interested in is who has written it. I note, for example, that three of my honourable friends from the other end of the corridor were kicked off the Council of Europe recently because their views did not accord with those of the establishment. But I am certainly happy to read what the noble Lord suggests.
I want to put some more figures into the debate that arise from our earlier discussions and are relevant to the amendment. They relate to the number of EU laws that EEA members such as Norway and Iceland have to accept. The Icelandic Government estimate 10%—5,000 legislative Acts in force, divided by 23,078 legislative Acts in consolidated EU acquis.
There seems to be a debate about the extent to which this applies to these countries, but as the noble Lord, Lord Stoddart, said, all of this is completely irrelevant. We are not Iceland; we are not Norway; we are Britain. We are a country with a long history and relationships around the globe in a global marketplace in the Far East and elsewhere. It is utterly ridiculous to suggest that we would get into some sort of trade war with the EU and be vetoed by Portugal or Spain. It is a shallow argument that demeans our country, and will be hugely counterproductive if it is deployed, as we discovered when perhaps overenthusiastic unionists tried to deploy the same argument in Scotland when they said that Scotland would not be able to survive on its own.
Iceland has a population that is smaller than that of Edinburgh, for goodness sake, and here we have it on the authority of the Icelandic Prime Minister himself that Iceland is much better off outside the EU. So I do not think that these arguments apply. It has been suggested that the British Government could produce a report on what it would be like if we were outside the EU, and that we should not embark on taking control of our own destiny unless we had such a report, which would by its very nature be speculative and might very well underestimate the opportunities. Thank goodness we did not have this kind of thinking in May 1940.
This United Kingdom has a huge range of relationships and great talent and ability, and it is wrong to suggest that we cannot work with our colleagues in Europe outside the EU. It is not we who are leaving the European Union; it is the European Union that is leaving us. Of course it is. In order to maintain the integrity of the single currency, the euro, which the noble Lord and others would have had us join—what a mess we would be in if we had done that—the EU is having to introduce a more integrated system. Therefore, it is not a matter of whether we are able to have influence and to punch above our weight within this organisation. This organisation is changing; it has to change because countries are so obsessed with maintaining currency union that they are prepared not only to sacrifice the jobs and living standards of young people in the southern European states but to give up their autonomy. We are not prepared to give up our autonomy.
When we joined the EU, we joined the common market, which was a free trade area. That free trade area is being turned into something else. It is being turned into a country with its own currency and the ability to raise taxes and to control its own fiscal issues. The noble Baroness, Lady Smith, said that you cannot join a golf club and then not pay your subscription. We did join the golf club—but they want to play tennis now. They want to play a completely different game, which is not what we joined for.
Lord Wallace of Saltaire
The noble Lord is making a long campaign speech, and I hesitate to interrupt him. I merely remind him that Edward Heath, Harold Macmillan, Alec Douglas-Home and others said as we joined the European Community that it had clear political connotations and that our foreign policy would be affected. I will send him tomorrow the speech by Alec Douglas-Home in 1971.
Lord Forsyth of Drumlean
The noble Lord may very well be correct that Edward Heath said this and Alec Douglas-Home said this, but most people thought that they were voting to join a common market. Certainly, Scottish fishermen thought that they would keep control of their fish stocks and that their industry would survive, and it has been destroyed—and facts are chiels that winna ding, as they say north of the border. The fact is that what we thought we were joining is not what has come to pass.
Lord Stoddart of Swindon
Is it not true that Harold Macmillan’s real reason for wanting to join is that he had come to the conclusion that the United Kingdom was ungovernable? That was his reason. However, in the 1971 White Paper issued by Mr Heath, did he not make the assertion that our general sovereignty would not be undermined—or something of that sort—and is it not true that our essential sovereignty is being undermined and has been undermined?
Lord Forsyth of Drumlean
I agree entirely with all the points that the noble Lord has made. In the context of the late Edward Heath—with whom I got on very well personally while not agreeing with many of his views—that is the same Edward Heath who was elected on a Selsdon manifesto but did a U-turn and came to the conclusion that it was not possible to govern our country without the consent of the trade unions. However, a certain Lady Thatcher was elected in 1975 as leader of the Conservative Party on a manifesto which said that Britain is able to govern itself and that it is possible to restore the authority of Parliament. This resulted in her election as Prime Minister in 1979 and all the things that were said to be impossible were turned around. It was her belief in Britain and its ability to stand proud in the world which transformed our economic achievements during the 1980s.
This fatalism, this extraordinary idea that we are trapped in the European Union and that there is nothing we can do to escape it—that we might as well knuckle under and accept that we have got to be a part of it in order to advance what influence we have—is the politics of surrender.
The noble Lord, Lord Kerr, accuses me of making a campaigning speech. I do not know what he was doing when he wrote his letter to the Sunday Times, signed by other fellow mandarins. I have listened to his amendments and the constant prattling on about Iceland and Norway when they are totally irrelevant to this discussion. Most people in Britain would find it offensive being treated alongside Iceland as an equivalent party. I hope my noble friend will reject this amendment. I do not support it.
Lord Hannay of Chiswick
My Lords, we have been on an extraordinary, lengthy digression which bore not the slightest relationship—the noble Lord, Lord Forsyth, might like to listen to this as I am referring to his speech—to the amendment we are discussing.
I would like to go back and simply make two points. First, it is not sufficiently recognised that if the electorate were to vote to leave the European Union a decision would have to be taken by the Government—not by the leave campaign—as to what the future relationship they would wish to have should be. The purpose of the amendment is to ask the Government what relationship they would envisage in those circumstances. Is that an unreasonable thing to ask? I do not think so. Every time that the basic issue about Britain being in or not in the European Union has come up, every government White Paper and document has reviewed the alternatives. That was true in the times of Harold Macmillan and Edward Heath, and it was true in both attempts when Harold Wilson sought to join and when he had a referendum. It is a perfectly reasonable thing to do.
Judging from the speech of the noble Lord, Lord Forsyth, I have the impression that he would hate what the Government said they would envisage doing if there was a no vote. He would have every right to riddle it through with bullets as he has riddled everything through with bullets this evening. However, surely it is right that the British people, the electorate, should be told what relationship the Government would envisage if they chose to vote to leave. That is a reasonable thing to ask, is it not?
Baroness Morgan of Ely (Lab)
My Lords, the noble Lord, Lord Kerr, with his vast experience of working within EU institutions, knows better than us how the EU works and what the various alternatives to membership might be. No one here disputes the fact that we would wish to continue in some kind of trade relationship with the EU. To those who ask for figures, I cite IMF figures that state that 51% of our trade in goods is with the EU, as is 41% of our trade in goods and services. We would undoubtedly wish to have some kind of trading relationship with it.
Lord Kilclooney (CB)
When I asked a question about that figure last year, I was told that it included United Kingdom exports going to the rest of the world through Antwerp and Rotterdam. Does the noble Baroness have figures that refer only to the European Union?
Baroness Morgan of Ely
These are the figures from the IMF. My understanding is that they refer to the EU. I will check them, but I have not heard the noble Lord’s point made before. We will look at that, but I think these figures make a lot more sense. We will examine that.
Let me talk now about the winning side. How well do we do within the Council? As it happens, an article in today’s Guardian states that,
“the UK voted on the winning side 97.4% of the time in 2004-09 and 86.7% of the time in 2009-15”.
That tells me that this Government are not such good negotiators as the Labour Government were.
We have heard about several models tonight, but I should like to dwell a little on what Article 50 means and on what its implications are. There is a strong likelihood that, were we to vote to leave, we would need transitional measures to cover the period between the notification of the European Council by the UK of its decision to withdraw and the conclusion of the withdrawal treaty that sets out what our future relationship would look like. If that is not concluded within two years, it may be possible to extend it for a short period if both sides so decide. However, if we could not come to a conclusion—and, let us face it, it would be an incredibly complicated negotiation—then we would be out, with no formal relationship whatever. So this is very serious, and we have to understand that we should be discussing it now. We are having the referendum pretty soon and we need some idea of what the alternative might look like.
There a few other things that I should like to touch on. First, we know that the Prime Minister does not like the Norwegian model—
Lord Forsyth of Drumlean
I wonder whether the noble Baroness might comment on what the noble Lord, Lord Rose, said about what would happen. He said:
“Nothing is going to happen if we come out of Europe in the first five years, probably. There will be absolutely no change. Then, if you look back ten years later, there will have been some change, and if you look back 15 years later there will have been some.
It’s not until you get to 20 years later that there’s probably going to be some movement if we came out which says ‘Please can we come back into Europe again’”.
Would she like to comment on those remarks by the leader of the “stay in” campaign?
Baroness Morgan of Ely
I think the noble Lord probably needs to study Article 50 to understand that if the negotiation is not concluded, there will be repercussions that will come fast and be quite dramatic. Everyone in this country who exports to the EU needs to take note of that.
Lord Stoddart of Swindon
Perhaps I may put this to the noble Baroness. Is it not the situation that if the people voted to come out, the next thing that would have to be done is that Parliament would have to repeal the European Communities Act 1972? If it does not repeal that Act, it will be bound by its provisions, which of course give powers and instructions to Parliament to pass regulations, and the European Court of Justice would still operate in this country. A sensible Government would repeal that Act before they even started negotiations under Article 50 of the Lisbon treaty.
Baroness Morgan of Ely
If we were leaving the EU, obviously we would have to repeal a whole raft of policies. That is something we referred to earlier.
Lord Stoddart of Swindon
Everything that has happened since 1972 depends on that treaty, and every other treaty is an amendment to that treaty. The treaty would have to be abandoned before you could even embark on a negotiation.
Baroness Morgan of Ely
These are the kind of questions to which we need answers from the Government. That is precisely what we are asking: what would it look like and what would we need to do? What would the administrative consequences be? Does the Foreign Office have the capacity to deal with this?
Let us look at the Swiss model, where each negotiation is done bilaterally and on a piece-by-piece basis. You would need an army to start renegotiating that model if we were interested in pursuing that kind of thing. Let us not forget that the Swiss model does not allow access to financial services, which is something that should concern the City of London. The fact is that the City would be locked out. I am absolutely sure of that because if the Swiss financial services sector is locked out, I am quite sure that the Germans would be eyeing up the financial services sector very happily in terms of the opportunities for them. The City of London commissioned a report by the University of Kent looking specifically at the Swiss relationship and financial services. It found that Swiss financial services do not have unfettered access to the EU and that Switzerland—listen to this—currently uses London as a staging post to get access to the EU. We need to take note of that.
We could rely on WTO rules, of course, but again let us be clear that services, particularly financial services, would not be covered. Let us face it, the WTO is not an organisation that exactly moves fast. I think the last massive deal was done in 1994. When we are pressing the button and knowing that we need to get a negotiation done within two years, that is not something we could rely on. We also have to understand that if we wanted access to EU markets, WTO rules mean that British car manufacturers would face a 9.8% tariff on the export of cars, 5% on car components, 15% on food and 11% on clothing. Those are the rules of the WTO. If you want a loose relationship, that is what you would be looking at.
Lord Hamilton of Epsom
I am grateful to the noble Baroness for giving way. Has she considered the number of luxury cars that Germany sells to the United Kingdom?
Baroness Morgan of Ely
Absolutely, that is fine, and of course we would negotiate a deal with the Germans. But we come back to the point that we would not be holding all the cards. Exports to the UK account for 2.5% of their GDP, while it is 14% of our GDP. The other thing we should bear in mind is that the people who trade with us are, on the whole, Germany and the Netherlands. A lot of other countries do not do massive trade with us, quite frankly, and they would not have much interest in negotiating a great deal for the UK. Moreover, each of them would have a say in what that deal says.
Some have suggested that we have special links with the Commonwealth and with emerging markets around the world, so that is where we should be focusing our efforts. Really? How come Germany’s trade with China is three times greater than ours? The Germans also export more to India than we do. How come France finds it easier to land defence contracts with India than we do? That is the special relationship that we have with our Commonwealth friends. We cannot rely on historic relationships when 50% of our market in goods is with the EU.
Whatever deal is agreed, we know that each of the other 27 member states will be given a say in addition to the three members of the EEA, while Switzerland might have something to say if the UK managed to negotiate better terms than it. Some member states would be more generous than others and some would feel betrayed by a UK exit. The European Parliament would also have to ratify the agreement. So we have to be absolutely clear: the UK would not be holding very strong cards and it would not be an easy negotiation. Moreover, let us face it, negotiation is not exactly our Prime Minister’s strongest suit. The Prime Minister found it difficult to negotiate changes to the treaty from the inside but that will be nothing compared to trying to negotiate a new trade relationship with the EU from the outside.
The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)
My Lords, Amendment 24 moved by the noble Lord, Lord Kerr, calls for the Government to set out the relationship that it envisages having with the European Union in the event of a vote to leave. The amendment states that this report would have to be published 12 weeks before the date of the referendum and goes even further than that. It requires the Government to provide detail on the acceptability of hypothetical arrangements from the point of view of the 27 other member states. That seems unrealistic. I have just been listening to the noble Baroness, Lady Morgan, give details of some of the implications of Article 50. Amendment 24 seems to be asking the Government to put the cart before the horse before the horse has even bolted.
Lord Lea of Crondall
My Lords, I am sorry. There will not be many interruptions to the noble Baroness’s speech from the Labour Benches. Is she saying that it is unrealistic to consider the acceptability of this arrangement to every other member state? Does she not accept that that is very important? Indeed, it would be game, set and match if it were the case that not all 27 other member states agreed. Is it not essential to consider how it would be with all those vetoes around the place? If we are not careful, we will be in a very difficult position. She cannot utter that little phrase and have nothing more to say about it. Is it not rather important?
Baroness Anelay of St Johns
My Lords, it is indeed important. Perhaps I did not take enough care to explain the position. The amendment is asking the Government to do something that is impossible because they are barred from knowing what the agreement will be by the text of Article 50, which states:
“A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union”.
It then goes on to give the procedure. All I am saying is that the second part of the amendment moved by the noble Lord, Lord Kerr of Kinlochard, asks the Government to leap over that and to say in advance of even notifying the European Council of their intent to withdraw what should be acceptable to the other states within the European Union in the event of a withdrawal. It is hypothetical simply because the Government cannot predict what will be acceptable to other states before there has been a referendum, before this country has taken a decision, and before this Government have been able to notify the European Council in accord with Article 50 if it takes a decision to leave. I am merely pointing out the procedure. I am sorry if I truncated that, thus making it less clear.
The second amendment in this group—Amendment 26 in the name of the noble Lord, Lord Liddle—would create a similar statutory requirement for the Secretary of State to commission and publish an objective assessment of the alternatives to the UK’s membership of the EU in advance of the referendum.
Amendment 32A, spoken to by the noble Baroness, Lady Smith of Newnham, calls for the Government to set out the relationship that it envisages with Ireland in the event of a vote to leave the European Union. I appreciate the reasons why she has put this forward and the importance of our relationship with Ireland. Her proposed report would also need to be published by the Government 12 weeks before the date of the referendum. I mentioned when replying to an earlier group of amendments the danger of imposing arbitrary deadlines given the possibility of legal challenge. I hope that I can be a little more helpful in saying that—
Lord Hannay of Chiswick
Will the noble Baroness kindly address the first part of the amendment of the noble Lord, Lord Kerr, to which she has not replied? I understand what she is saying about acceptability. I have no doubt that if the Government stated what they envisaged, quite a few people in the other 27 member states would answer the acceptability problem quite promptly. Will she address the problem about what the Government envisage doing if there were a vote to leave the European Union?
Baroness Anelay of St Johns
My Lords, as I said, perhaps I can be more helpful. The noble Lord has been patient. I am now getting to the point that he wishes to hear. Noble Lords may recall the Prime Minister’s words last week in the other place, when he said,
“if we do not get what we need in our renegotiation I rule absolutely nothing out. I think that it is important that as we have this debate as a nation we are very clear about the facts and figures and about the alternatives”.—[Official Report, Commons, 28/10/15; col. 345.]
As I mentioned earlier today, if we are to put an obligation on the Government, the Committee would need to think very carefully about the terminology used. That goes to part of the debate we have just had. I have concerns about some of the wording used in these amendments. I can understand the good will behind some of it but there would be uncertainty about what the objective obligation specifically requires. While the Government acknowledge the importance of providing balanced information, this requirement could be an undue source of criticism, as there can often be a surprising—or, rather, unsurprising, I should say, given what we have heard tonight—level of disagreement about what counts as objective.
I think there has been a very fair reflection tonight of the feelings on all sides of the argument and about how fairness and evenness may not be perceived as such by others. It is a very serious matter to which we all need to address our greatest concentration in considering how we make progress on these issues. As I advised the Committee earlier, the Government will now think carefully about the issue of public information and consider what we may be able to bring forward by way of an amendment on Report. I continue to listen with interest to the arguments put forward by the Committee. Each of these groups of amendments has rounded out the debate more fully and started to crystallise some of the areas where there may be some agreement and those where perhaps there is unlikely ever to be agreement.
In the light of the answer I have given, I hope that the noble Lord, Lord Kerr of Kinlochard, will withdraw his Amendment 24. I urge other noble Lords with amendments in this group not to move them when we reach them.
Lord Kerr of Kinlochard
I thank the noble Baroness for her customary courteous, careful response to my amendment. I accept the criticism she made of its second proposed new subsection. She put it very vividly in saying that I was putting the cart before the horse before the horse had even bolted. I am sure the stable door was there somewhere. She has a point. Of course, the sequence would be, if we voted no, there is the vote, then presumably the Government go to Brussels and invoke Article 50, and there is a discussion from which an arrangement emerges, so she is absolutely right in her logic.
My amendment would have been better if I had asked the Government to report on the relationship with the European Union that they envisage in the event of a referendum vote to leave and on their view of the acceptability of such an arrangement to every European member state. I would be happy to see it adjusted. Maybe the Minister would wish to adjust it a little further.
Lord Forsyth of Drumlean
“Report on the outcomes of negotiations between Her Majesty’s Government and the European Union
Not less than four months before the date of the referendum, the Secretary of State shall publish, and lay before each House of Parliament, a report setting out the outcomes of Her Majesty’s Government’s negotiations with the European Union, and any resulting changes in the relationship between the United Kingdom and the European Union.”
Lord Forsyth of Drumlean
My Lords, I am very conscious that I must not irritate the noble Lords, Lord Hannay and Lord Kerr, by making a campaigning speech. Having looked at my amendment, Amendment 25, I am at a loss to think how one could turn this into a campaigning speech. It is clearly an amendment that should be acceptable to all noble Lords in the House, including to my noble friend the Minister.
Lord Kerr of Kinlochard
I do not in any way wish to interrupt his flood. I merely wish to tell him that I support his amendment.
Lord Forsyth of Drumlean
I am now having doubts. I am not surprised that the noble Lord supports the amendment, because it is a very sensible one. All that it does is seek to ensure that when the Prime Minister has finished his negotiations we have some kind of government publication that tells us what they were about, what their outcome was and what the implications would be for our continued membership of the European Union with those changes, if he so recommends, or the alternative.
The amendment is drafted in neutral terms and I hope that my noble friend might be able to accept the principle. I do not think that it is too much to ask. In my noble friend’s Second Reading speech, he hinted as much. The Chancellor of the Exchequer said in the early part of the summer that there would have to be some sort of paper. There are none of the issues that we have had to discuss earlier this evening arising from the debates that we had on publications of the benefits of being in and out. This is completely straightforward. What did the Prime Minister want? What did he get? What will be the effect on our relationship with the EU and what is the outcome? I beg to move.
Lord Wallace of Saltaire
My Lords, I, too, agree with this amendment. I anticipate that when the negotiations are complete, the Prime Minister will publish a paper and I think it highly likely that the noble Lord, Lord Forsyth, will disagree fundamentally with what the Prime Minister says.
Lord Hamilton of Epsom
My Lords, I went to the Public Bill Office and said that I wanted to put down an amendment very similar to this. It would have called for a White Paper, which this amendment does not. When it was pointed out to me that my noble friend Lord Forsyth’s amendment was already tabled, I added my name to it. This smacks very much of Amendment 1, which I put my name to and which was supported very early on by the noble Lord, Lord Kerr. The Liberal Democrats supported it, too, and I suspect that the Front Bench of the Labour Party is going to support it. This amendment ties in with everything that the Government have said already. The only worry I have is that my noble friend the Minister may say that the Government have given an undertaking to this and that it does not need to be in the Bill. I have to say that we will all be very reassured if it is.
Lord Forsyth of Drumlean
Before my noble friend sits down, one of the key points is of course the provision:
“Not less than four months before the date of the referendum”.
Baroness Morgan of Ely
My Lords, we are all keen to know the outcome of the Prime Minister’s negotiations. Now we have an idea of what he is hoping to achieve and he has promised to write down the UK’s negotiating position in a letter to the President of the Council. I think we are expecting that to happen next week. I am sure that other EU leaders will be happy to see that as well, given the reports we have read of their frustration at the vagueness of the UK’s negotiating position.
We know the broad themes—sovereignty, economic governance and what the meaning is of “ever-closer union”—but I would take issue with one point brought up in relation to the report written by the European Committee of this House. In relation to restrictions on free movement of labour, we would warn the Government not to talk up the problem of benefit tourism, as they did in their response to the European Committee on its report assessing the reform process. They said in their response that they want to reform,
“welfare to reduce the incentives which have led to mass immigration from Europe”.
I am afraid that the facts simply do not match up to that proposition. Last year, a European Commission report found there was no evidence of systematic or widespread benefit tourism by EU nationals migrating within the EU, including to the UK. In fact, the UK is the only EU member state where there were fewer beneficiaries among EU migrants than among nationals.
We are expecting the first substantive discussions on reform at the December summit. Let us hope that they are given a bit more of an airing than in June, when I think the Prime Minister was lucky to have had 10 minutes. Of course, it would make sense if the outcomes of the negotiations were made clear to the public. We would endorse the idea of the production of a report to this effect.
Baroness Anelay of St Johns
My Lords, we are coming towards the end of a long, thorough and well-considered debate on the issue of public information. As I explained earlier, I agree that the public will expect Ministers to set out the results of the renegotiation, how the relationship with Europe has been changed and if, and how, those changes address their concerns.
My noble friend Lord Forsyth’s amendment would create a statutory requirement for the Secretary of State to publish and lay before both Houses a report on the renegotiation outcome, and any resulting changes in the relationship between the United Kingdom and the European Union. He stipulates that this must be done four months before the referendum poll date. I am sympathetic with the aim behind the amendment: to ensure that the British people understand the outcome of the renegotiations. However, because of my earlier comments about deadlines, I do not think my noble friend will be surprised to hear that the four-month period imposed by this amendment between publication of a report and the poll is not necessarily going to be helpful to having a fair and even campaign. As I explained earlier, there could be unnecessary complications with regard to legal challenges if there were a prescriptive date. We need to think very carefully about the most appropriate timeframe for the delivery of public information. I think it would be unwise to commit to an arbitrary deadline at this stage.
Lord Forsyth of Drumlean
I do not want to introduce any more animals into the debate and would certainly not want to look a gift horse in the mouth. I am most grateful to my noble friend for saying that she is sympathetic. Is her problem with the length of the period? The reason that there is a period in there is so that there is enough time for people to consider the impact of the changes before they cast their vote. It is arbitrary in the sense that it should not be less than four months. It is clearly very important that the White Paper, or whatever you want to call it, should not be published two weeks before polling day, before people have an opportunity to consider its value.
Baroness Anelay of St Johns
My Lords, I entirely agree with my noble friend. The important thing, as the Committee has discussed today, is that we are able to have information that it is appropriate and reasonable for the Government to produce, but at a time when it can be considered by those who are to cast their vote.
We need to consider carefully what that timeframe may be, taking into account that the Government will need to ensure that the production of information is done in a reliable, sustainable way. Of course, the Government must not only compile a report but ensure that mechanisms are in place for its widespread distribution. These days, so many of us in this House access reports online, but that is not the only way that information needs to be distributed. I am not saying that I have already made up my mind what the deadline should be. I am saying that we need to consider carefully how there should be an opportunity for information to be produced and presented to the public in time for them to be able to make a decision.
I have listened very carefully to each of the debates, each of which has added something to our consideration. There is clearly an important role for the Government. The public will expect Ministers to set out the results of the negotiation. They will expect the Government to set out how the relationship with Europe is being changed, and if and how those changes address their concerns. That goes to the heart of what my noble friend has just said. The public need to be able to look at that information to answer the question that a voter might ask: what does it mean to me?
As my right honourable friend the Chancellor of the Exchequer said in June, the Government intend to publish an assessment,
“of the merits of membership and the risks of a lack of reform in the European Union, including the damage that could do to Britain’s interests”.—[Official Report, Commons, 16/6/15; col 165.]
I have also heard the calls today for an assessment of the implications of a vote to leave the European Union. We will now give careful consideration to what we may be able to bring forward by way of an amendment on Report that would command the support of both Houses. I know that we will continue to discuss this matter with noble Lords who have tabled amendments at this stage. I hope that that is a productive discussion.
The noble Lord, Lord Hamilton, asked a specific question: would the Government’s commitment be to put something in the Bill? I have been talking about the Government bringing forward an amendment, which means that something would go into the Bill, simply because it would be an amendment.
I urge the noble Lord, Lord Kerr of Kinlochard, to withdraw his amendment and to await discussions that I hope will proceed to a constructive conclusion. I am sorry.
Baroness Anelay of St Johns
It must have been a long day for me to confuse the two noble Lords. I offer my humble apologies to my noble friend Lord Forsyth. What a day!
Lord Forsyth of Drumlean
The connection is closer than my noble friend may think. If I look out of my bedroom window, I see Kinlochard. When I arrive in London, I look behind me and I see Kinlochard.
I am most grateful to my noble friend. In the shadow of Halloween, we have had a pretty scary debate listening to some of the speeches about the awful things that will befall us if we leave the European Union. It is very pleasurable that we can conclude our discussions on such a positive note, for which I am very grateful to my noble friend. We look forward to seeing the amendment that will be tabled on Report and being able to sleep soundly in our beds, knowing that the Government will address at least this issue in respect of the Bill. I am happy to withdraw my amendment.