Immigration Bill (Thirteenth sitting)
(8 years, 6 months ago)
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The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 9 / Noes: 7 - Question accordingly agreed to.
Keir Starmer (Holborn and St Pancras) (Lab)
I beg to move amendment 224, , in schedule 6, page 91, line 37, leave out—
“before the end of such period as may be prescribed.”
To remove provision for a period to be prescribed in regulations, made under section 94(3) of the Immigration and Asylum Act 1999, during which an individual may be left destitute before qualifying for section 95 support on the basis of having lodged “further qualifying submissions”.
The Chair
With this it will be convenient to discuss the following:
Amendment 225, in schedule 6, page 92, line 6, leave out from “, or” to end of line 8.
To prevent section 95 support from terminating immediately on notification of a decision on further qualifying submissions if no period for support terminating is prescribed in regulations made under section 94(3) of the Immigration and Asylum Act 1999.
Keir Starmer
The two amendments are rather technical but none the less important. They deal with the period between a decision being made and support being made available.
The background to amendment 224 is that, under proposed new subsection (2B) under paragraph 3(3) of the schedule, people who have lodged “further qualifying submissions” to the Home Office are defined as asylum seekers and will therefore qualify for full support under section 95 of the Immigration and Asylum Act 1999 in the same way as those making an initial claim for asylum. That enables support to be provided to that group of people, who at the moment are accommodated under section 4 of the 1999 Act. That section is being repealed.
The drafting of proposed new subsection (2B)(b) and (2B)(c)(ii) enables the Secretary of State to prescribe in regulation a period during which he may consider the further qualifying submissions without being under a duty to provide support. During that period, the individual would remain destitute. Such a situation was subject to litigation in the case of MK and AH, with Refugee Action, which was reported in 2012. The Home Office policy of delaying 15 working days before making a decision on section 4 applications was found to be unlawful. The case led to a policy change, so that decisions under section 4 now have to be made within two days for individuals in vulnerable categories and five days for other people. The amendment would ensure that the principles in the MK case are upheld and that the resulting policy remains broadly in place.
Amendment 226 is also technical and is intended to prevent section 95 support from terminating immediately upon notification of a decision on—
The Chair
Order. Sorry to interrupt the shadow Minister, but I think he might have said amendment 226 just then, but that is in the next group. We are discussing amendments 224 and 225 at this stage.
Keir Starmer
Maybe I did. I apologise.
Amendment 225 is intended to prevent individuals and families from being made immediately homeless and destitute on receipt of a decision from the Home Office on their further qualifying submissions. The existing policy allows for 14 days of support if further qualifying submissions are rejected and 21 days if they are accepted. Under proposed new subsection (3A)(b) in paragraph 3(5) of the schedule, however, if no regulations are brought in prescribing the period after which support is terminated, or the individual is not covered by the scenario envisaged in the regulations, support can be terminated immediately.
Essentially, there are three scenarios that are a cause of concern. The first is applicants whose further submissions are accepted and who are granted leave. They would have no time to obtain the documentation they need to apply for mainstream benefits and/or work. Lest anyone thinks that that is a theoretical example, there was the tragic case that a number of Committee members will know of—the case of EG—where support was withdrawn and there was a serious case review, which touched upon the transitional periods when support was not provided under the existing regime. To be fair, I do not think that that was the sole cause of the issue, but it was certainly one of the issues that was flagged up in the serious case review, and obviously everyone wants to ensure that everything is done to ensure that that type of thing does not happen again. EG was a little boy who starved to death in that period. So that is applicants whose further submissions are accepted and are granted leave.
The second group is applicants whose further submissions are treated as a fresh protection claim with a right of appeal. As I understand it, they would have to reapply for support on receiving a decision about their further qualifying submissions, because the Bill provides for the support they were receiving to terminate on the day that the decision is taken. So, as far as they are concerned, there is an interim period.
The third group is applicants whose further submissions are rejected. Until now, they would have had 14 days of support. There is a provision in the Bill—new subsection (3D) under paragraph 3(5) of schedule 6—that provides for support to be continued when
“permission to apply for judicial review is granted”.
Clearly, however, there will be a gap between the decision and any application being made for judicial review, and any permission being granted.
As I say, to some extent, these are technical amendments, but they are important because they deal with periods that until now have been dealt with under policy and guidance, whereby support is not removed during the possible gap period. However, it may be that the Minister can give some assurances that will remove the need for the amendment.
Anne McLaughlin (Glasgow North East) (SNP)
The amendment is a common-sense proposal that will limit a policy that has been shown to be ineffective, costly and inhumane. Personally, I find it extremely frustrating that the Home Office’s own evaluation of the evidence highlights the problems with these proposals—primarily, that they do not work—yet we see the proposals being driven through by the Government regardless. I have to question why the Government are not listening to themselves.
We have heard from local authorities that what these policies end up doing is displacing the cost of support, in some cases from central Government to local government. In other cases, the costs are borne by charities and individuals who give their own income to support asylum seekers.
We have heard once or twice—or 45 times—in the course of our deliberations on the Bill that we have a system that has been shown to be very problematic at the least, and where the accuracy of decision making is at least in question. Given the fluctuating security situation in many countries around the world, the rapid mechanised movements of Daesh being an example, further qualifying submissions could rightly highlight the dangers of returning a citizen to their home country. So it is only right, under our international and moral obligations, that we have scope for further qualifying submissions. We should not be driving people into destitution as punishment for using those, no matter how short the length of time.
If any of us in this room were destitute for one day, we would probably be severely damaged by it. There is a saying that my mother still uses all the time. I do not know if it is a McLaughlin saying, a west of Scotland saying, or just a saying, but it is true that we do not know we are born. I am not seeing many nodding heads—it is not a McLaughlin saying. We do not appreciate what we have got and how it would be so difficult for any of us to go through what we are proposing to put other people through.
If an asylum seeker’s initial case has been decided upon, given the restricted support on offer throughout the case, combined with the length of time for that decision, the risk of grave consequences, including destitution, for those who are not supported for a period after lodging further submissions could be quite catastrophic for that individual and, in my opinion, shameful for these islands. I want no part in that.
That takes me on to amendment 225, which seeks to ensure that those who have received a decision on a claim based on further submissions are not cast into destitution on receipt of their decision. Studies from the Red Cross, the Refugee Council and Freedom from Torture have all found that the existing 28 days for successful claimants is insufficient. The amendment should be treated as a measure to streamline the system. If a claimant is ultimately successful, the grace period will support the obtaining of documentation to begin work. If the claimant is unsuccessful, the proposed grace period will allow the individual to make arrangements to leave the UK and reduce the likelihood of the expense and trauma caused by detention. If compassion is not a motivation, amendment 225 proposes what would be implemented in a system based on best practice and common sense.
The Minister for Immigration (James Brokenshire)
We have already had a wide-ranging debate on schedule 6, so I do not intend to return to some of the “in principle” issues of which we have had significant discussion. The two amendments in the group, however, touch on the narrow issue of further submissions and concern how we propose to deal with failed asylum seekers who submit further submissions such that their removal would breach the UK’s obligations under the convention on refugees or under article 3 of the European convention on human rights.
A procedure is set out in paragraph 353 of the immigration rules for dealing with such cases, which broadly results in three possible outcomes for the submissions: outright rejection; rejection, but there is a fresh right of appeal against the decision; or acceptance, and the person is granted leave to remain in the UK. Only about 15% of cases are granted leave to remain. Most are found to be without merit and often merely repeat matters already considered and rejected by the immigration judge who dealt with the asylum appeal.
Under existing arrangements, section 4(2) of the Immigration and Asylum Act 1999 is used to support persons who have made further submissions and who require support if they would otherwise be destitute while the submissions are under consideration. Section 4 is to be repealed by the Bill, but we consider it appropriate to retain a mechanism to support those who have lodged submissions, and the Bill does so by amending section 95 of the 1999 Act in order to provide an avenue of support under that measure, subject to the conditions that I will describe.
The system would be wholly unmanageable if a failed asylum seeker were immediately able to access support solely by lodging further submissions and, if the submissions were to be rejected, to continue to receive that support for a “grace period”—21 days for a single person—before that support is stopped. That would be the impact of the amendments.
To illustrate my point, on day one, the failed asylum seeker might lodge the further submissions and be eligible for support. Then, even if the submissions were rejected on day two, they would be entitled to support for at least another 21 days—longer if children were in the household, up to 28 days—during which time they would be able to lodge fresh submissions and so continue the cycle. Therefore, under schedule 6 to the Bill, the arrangements will not work in that way.
Instead, the person will be eligible for support only if the submissions have remained outstanding for a period set out in regulations. We have not made a final decision on how long that period will be, but we expect it to be five working days in most cases, although there may be issues of vulnerability. The shadow Minister, the hon. and learned Member for Holborn and St Pancras, has set out some of the policy framework that will inform that. In effect, the position will remain largely unchanged from current arrangements.
Once submissions are lodged, the person may seek support under section 4(2) of the 1999 Act, but that is normally provided only if a decision on the further submissions and accompanying support application is not made within five working days. Special consideration will continue to be given to cases in which the person is clearly in a vulnerable position, for example because of a disability or in the case of a pregnant woman. In such cases, support is usually granted if a decision on the further submissions is not made within two working days. We expect to continue those special provisions under the new arrangements and will reflect them in the regulations.
Keir Starmer
The Minister has dealt in some detail with the situation if the claim is rejected. As I understand it, if it is accepted, the grace period of 28 days will apply, which covers the first category of people. If that is what the Minister is saying, I am reassured by that and will not push the amendment to a vote. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment made: 97, in schedule 6, page 92, line 41, leave out “VI” and insert “VI and section 141”.—(James Brokenshire).
Keir Starmer
I beg to move amendment 226, in schedule 6, page 93, line 37, leave out sub-paragraph (5),
To allow destitute refused asylum seeking families to continue receiving basic support (just over £5 a day for their essential living needs with housing provided for those with nowhere to live) until their case is finally concluded, as is currently the case. This aims to protect vulnerable children from being left destitute; ensure immigration controls are not undermined because the Home Office has lost contact with families who are appeal rights exhausted; and to avoid a substantial transfer of costs to local authorities.
The Chair
With this it will be convenient to discuss amendment 227, in schedule 6, page 93, line 38, leave out from “provided)” to end of line 39, and insert—
‘(a) the heading becomes “Support for asylum-seekers, etc”, and
(b) insert after subsection (8)—
“(8A) The weekly cash payment set out in Regulation 2(2) of the Asylum Support (Amendment No.3) Regulations 2015 No. 1501 for each individual is increased to no less than 60% of the rate of Income Support payable to single adults aged 25 or over.”’
To ensure asylum seekers have the support they need to pay for food, clothing, toiletries, travel and other necessities and thereby try to help ensure that they can properly meet their essential living needs and pursue their asylum applications. The amendment works by amending section 95 of the Immigration and Asylum Act 1999 which is the overarching section under which support for persons seeking asylum is provided.
Keir Starmer
In earlier debates on clause 34 and schedule 6, we have touched at great length on the subject of amendment 226, which is intended to reverse the removal of support altogether. A number of Committee Members quoted from the available evidence. In those circumstances, I do not propose to dwell heavily on amendment 226, but amendment 227 has not been dealt with.
The rates for asylum seekers supported under section 95 of the 1999 Act were originally set at 70% of income support, on the basis that their accommodation and utility bills would be paid for separately. As of August this year, asylum seekers, including children, on section 95 support who would otherwise be destitute now receive the same flat rate of support, as opposed to varying amounts for single adults, lone parents, families with children and so on. That rate set at just £36.95 a week, or just over £5 a day. A number of groups have looked at that rate of support, which is manifestly very low. In 2013, a cross-party parliamentary inquiry into asylum support for children and young people, which took evidence from 150 local authorities, found that
“the levels of support for asylum seeking families are meeting neither children’s essential living needs, nor their wider need to learn and develop. The levels are too low and given that they were not increased in 2012 they should be raised as a matter of urgency and increased annually at the very least in line with income support.”
The inquiry further recommended:
“The rates of support should never fall below 70% of income support.”
The Home Affairs Committee picked up the theme in October 2013, highlighting
“concerns about the level of support available to those who seek asylum in the UK.”
It concluded:
“This relative poverty of those on section 95 support is compounded by the fact that the vast majority of asylum applicants have not legally been allowed to work since 2002.”
We will come to that issue later. Amendment 227 would ensure that any asylum seeker who would otherwise be destitute received no less than 60% of income support, which is currently equal to £43.86 a week.
Sarah Champion (Rotherham) (Lab)
I am going to speak to amendments 226 and 227, because they are both fundamental and speak to the humanity that I believe we have in this country.
I shall speak to amendment 226 first. Our immigration system has long recognised the need to afford special protection to families with children. It is heartening to hear the Minister reaffirm that position. However, the Bill will remove those protections by withdrawing support for refused asylum-seeking families with children. Irrespective of whether families should or should not return to their country of origin, it is incumbent upon us to ensure that the wellbeing of children is at the forefront of our asylum policy. The Government, by contrast, are seeking to withdraw all support for children when their parent’s application is refused, and to prevent statutory services from assisting children who become destitute.
The consequences of the complete withdrawal of support are severe. We have heard from witnesses that when refused asylum seekers have their support cut off, it both causes illness and complicates existing health problems. Those effects are even more pronounced given that asylum seekers will have been living below the poverty line, on just over £5 a day, for many months or even years while awaiting a decision. The pilot of section 9 of the Immigration Act 2004, which introduced similar measures, clearly demonstrated their negative impact on the health and wellbeing of refused asylum seekers. Refugee Action and the Refugee Council’s study of the pilot revealed that the majority of families with whom they worked had mental or physical health problems that were exacerbated by section 9. Some 80% of parents were found to have mental health problems and some 36% had significant physical health problems.
The risks to children are worsened still further by the potential to force families into exploitative situations in order to survive. Provisions in the Bill would see the criminalisation of illegal workers, the loss of the right to rent, the closure of bank accounts and the freezing of assets. In such an environment I am gravely concerned that exploitation will increase dramatically and that many of the positive steps made by the Modern Slavery Act 2015 may be fatally undermined.
The Bill will inevitably mean the cost of supporting families being passed to local authorities. The costs will be huge. As asylum seekers are overwhelmingly located in deprived areas, those with the least ability to absorb those costs will be faced with the highest bill. The north of England, for example, has about a third of the UK’s population, but Migration Yorkshire estimates that it will face half the cost. It has also highlighted that the societal impacts of such deprivation will be disproportionately felt in the north of England.
The Government’s view is that the changes are necessary to encourage refused migrants to leave, but a huge weight of evidence, including from the Home Office itself, suggests that that will simply not work. Indeed, the Bill is likely to make effective immigration control still harder. When parents think that their children’s life may be at risk if they return home, whether that fear is justified or not, they will generally opt for destitution in the UK as the lesser of two evils. The impact of the removal of support will be the removal of any incentive for failed migrants to maintain contact with the Home Office. The Bill will not only force migrants from the address at which they were known to the Home Office but ensure that migrants do not contact the Home Office again. How is immigration control to operate under those conditions? How is the Home Office expected to track and ultimately remove migrants with whom it has no contact and for whom it has no address? The Bill fails to address those serious questions.
The findings of the section 9 pilot clearly demonstrate the effect on immigration control of removing support. The Home Office’s own report stated that 39% of migrants from whom support was withdrawn absconded, compared with 21% of those who remained supported. Only one family was successfully removed, compared with nine in the control group, and there was no significant increase in voluntary returns. Section 9 almost doubled the rate of absconding, greatly decreased the chances of successful removal and had no impact whatever on families choosing to leave the UK. How can that possibly achieve the Government’s objectives?
We are facing, then, changes that will place families in poverty, cost local authorities and have a disproportionate impact on poor areas. The changes will make it more difficult to remove failed asylum seekers and will do nothing to encourage them to return of their own accord. The Government should reconsider this ill thought out step and support amendment 226.
In the Bill the Government have sought to withdraw the pitifully low level of support currently provided to asylum seekers. The question of if and when the support should be withdrawn has been widely discussed in Committee. Amendment 227 would instead address the support itself, to ensure that it provides the most basic needs for asylum seekers. As currently calculated, section 95 support unquestionably does not do so. Over recent years, Government cuts and a four-year freeze in the rate of the support have seen its value fall well below the level of 75% of income support at which it was originally set. That level in itself was determined as the absolute bare minimum necessary to stave off poverty.
Section 95 support is currently £36.95 a week, or a little over £5 a day. With that money, asylum seekers must pay for food, clothing, toiletries, transport and all necessities. Asylum seekers’ situation is made even more precarious by the fact that they often arrive in Britain with nothing at all and in many cases are already malnourished and in poor health.
Repeated studies have found that section 95 support fails to meet basic needs. Research in 2013 by Refugee Action found that 70% of those surveyed were unable to buy either enough food to feed themselves, or fresh fruit and vegetables, or food that met their religious or cultural needs. Similarly, all respondents to a research survey by Freedom from Torture stated that their income was insufficient to meet their basic needs. Both surveys indicated that asylum seekers usually had to sacrifice one essential need to meet another.
A 2013 cross-party inquiry found that support was not meeting children’s basic needs. Children seeking refugee protection are some of the hardest hit by the lowest levels of support. Children under 19 recently saw their weekly payment under section 95 slashed from £52.96 a week to £36.95. That will leave a single parent with one child struggling to survive on an amount that is less than 50% of income support, despite the fact that children require extra support, especially to fully meet their social, educational and health needs. Even prior to the cuts, all lone parent respondents to Refugee Action’s research survey reported that they could not buy items for their children’s education and wellbeing, such as toys, books or stationery. No children should be forced to live in poverty as a result of Government policy, especially not those seeking protection from persecution.
One of the stated justifications for keeping asylum support rates low was that both section 95 support and section 4 support were only temporary. However, in the second quarter of this year, roughly 60% of the 29,586 pending asylum cases had either been waiting over six months for an initial decision or were awaiting further review. The Home Affairs Committee has already raised concerns about the impact of living off asylum support for extended periods of time.
In complying with a 2014 High Court judgment, the Government calculated the level of support necessary to meet asylum seekers’ most basic needs, based upon expenditure data from the Office for National Statistics for the lowest 10% income group in the UK. However, the Home Office saw fit to revise those figures downwards. In doing so, it introduced a subjective element to the calculation and ensured that support levels are vulnerable to political or budgetary pressures. Amendment 227 would introduce a level of support based on ONS data for the current financial year and ensure that it was adjusted according to the consumer prices index each year. Without those adjustments, support will continue to be eroded and asylum seekers will be pushed deeper into poverty.
Uprating asylum support levels would ensure that those seeking protection were able to meet their most basic needs. The level proposed in amendment 227 can hardly be described as profligate, amounting to only the absolute minimum necessary to stave off poverty. It is vital that we act now to address what amounts to state-enforced poverty. Failure to do so will inevitably lead to more and more vulnerable people being driven into increasingly desperate circumstances.
Anne McLaughlin
I always find—I am sure everyone will agree—that when looking at legislation it is important to remember who we are talking about and think through who will be affected by legislative changes. I will focus on one reason why amendment 226 is so important. I want to share with the Committee the story of Zara, whom I came to know extremely well, though not as well as my sister came to know her.
It took a long time for the trust to build up with Zara. She was extremely religious, came from a middle eastern country as an asylum seeker and had been refused asylum. She was therefore destitute. She came to trust my sister and, in her broken English, eventually managed to tell her what she needed. I do not want to say the words I am going to say, but I am going to say them anyway. What she needed was sanitary towels. She shared two stories—this came later, after more trust was built up—of cringe-worthy, humiliating experiences that she had gone through because she was destitute and had no support.
Once, when Zara was coming off the bus—and before anyone complains that if she had money for bus fares she had money for hygiene products, those bus tickets were given by a Glasgow charity that helps people with getting about—she heard a little boy saying something to his mum. She could not quite make out what he was saying, but he was pointing at her, and she realised was bleeding. Any woman would feel the horror and humiliation of that, but she was extremely religious and that was just the end for her.
Another experience came when a charity had made it possible for Zara to have three nights’ accommodation in the home of a very kind person. The Committee will be able to imagine what I will say. She bled through the night—because of her erratic lifestyle she had no idea that her period was about to come—and she was horrified when she woke up in the morning, went to clean the sheets and discovered the blood had seeped through to the mattress. There was no way of hiding from that very kind person, to whom she was extremely grateful, what had happened.
Sarah Champion
As I listen to the story, my heart is being ripped out, but I think what disturbs me most is having to justify someone going on a bus, as if that is an extravagant luxury. Is that what we have come to?
Anne McLaughlin
The hon. Lady raises an important point, and I gave the justification I did because in this Committee I think I am getting to the stage when I can read the minds of some of the Conservative Members. As they did not intervene I explained how Zara managed to get on a bus.
I want to make it clear that I appreciate how uncomfortable people in this room might feel at hearing me talk about bleeding and sanitary towels. I would not normally do that; I am normally discreet, easily embarrassed and notoriously squeamish. I feel extremely uncomfortable standing here forcing myself to talk about periods, bleeding and sanitary towels, and repeating myself again and again. I am doing it because I want everyone to feel uncomfortable; I want us all to feel that discomfort, because we need to realise that whatever we feel now is a minuscule fraction of what the women I am talking about experience.
To continue reading minds, some Members might think that there are charities and good Samaritans, and ask whether help could not be got from them; but it was so painful for Zara to ask for that help. There are charities that go out to offer help, but they are primarily focused on putting a roof over someone’s head, and, if they cannot do that, on feeding them, because food is essential and hygiene products are not. They are essential only to someone’s mental wellbeing, and the charities obviously must concentrate on keeping people alive.
Again, to use telepathy—it is working well—Conservative Members may be thinking that the simple solution would be just to go home. That is all very well, but as we have heard so many times, a significant proportion of the decisions made about people are wrong. It may therefore be assumed that a significant proportion of the people who some Members may think choose to stay here and humiliate themselves with having to ask for sanitary products have no choice.
I cringe when I talk and think about Zara. I do not imagine that anyone in the room is not cringing, and I understand that, but we can do something about it. In this amendment, we are not asking for money for fripperies; we are asking for money for absolute essentials, so that people can, first, stay alive; and secondly, and just as important, are allowed their dignity. Anyone who votes against this amendment today must be honest with themselves and know that they are consciously and deliberately denying that dignity to these women and to many others. I appeal to the Minister and to Government Members to defy their Whip and vote aye—vote in favour of dignity for everyone.
Mrs Emma Lewell-Buck (South Shields) (Lab)
It is a pleasure to serve under your chairmanship, Mr Bone.
I apologise to the Committee if I repeat some of the comments that have already been made by my hon. Friends, but I feel we can never hammer home enough the points that we are trying to make today.
I will mainly speak to amendments 226 and 227. Amendment 226 would provide a very basic level of support—just over £5 a day—for destitute families who have been refused asylum. These amendments have three aims: to make sure that vulnerable children are not left destitute; to ensure that families continue to engage with the Home Office; and to head off the danger that the removal of asylum support will in practice see a massive transfer of responsibilities and duties of care from central to local government.
The first point is the most simple and in some ways the most powerful. To be entirely blunt, cutting support will mean that innocent families and their children will go without food or shelter. The Minister noted last week the importance of considering the best interests of children. As a civilised and compassionate nation, we cannot ignore the impact that withdrawing support would have on children’s welfare, health and wellbeing, or the very real dangers that they could be exposed to as a result of their family’s destitution. Without a safety net, families will resort to extreme measures, often turning to illegal work that drives them into the embrace of criminal gangs.
Removing support is also entirely counterproductive, in that it does not have the desired effect of encouraging families to leave the UK. Witnesses at the Committee’s evidence sessions told us the same thing time and time again—you do not get people to leave the country by cutting off their only means of support. All it does is give them every incentive to disappear and to stop engaging with the Home Office. Families will do that because given a choice between destitution in the UK or returning to a homeland where they believe they may be killed or tortured, they will choose the former as the least worst option. When we consider some of the absolutely desperate steps that people have taken to reach the UK to begin with, and that they have risked their lives to make the journey to Britain, we should not underestimate what they will do to stay here.
Removing support forces these families to find other ways to survive, and makes them easy prey for criminal gangs who will ruthlessly exploit their vulnerability for profit. One of the aims of the Bill is to tackle illegal employment, and the very welcome Modern Slavery Act in the last Parliament was intended to help to fight terrible crimes such as human trafficking. By removing support for failed asylum seekers, the Government may undermine both those aims, by gifting the criminals who prey on desperation a new group of people to target and exploit.
The Government seem to think that by encouraging people to leave the UK they can make savings, but their approach just will not have the effect that they intend. If they want to save money, they will do it by engaging people in the process of return. Some 40% of returns are voluntary, and even those that are not voluntary are made much easier when we have records on people and consequently know where to find them. Keeping people on the books costs money, but nothing compared to the alternative. The best way to save money is to conclude cases as quickly as possible, and encouraging people to drop off the radar by removing their support does the exact opposite.
Last week, the Solicitor General stated that he would write to me with full details of how judicial reviews would be funded. Obviously, I am yet to receive such details and I wonder if he could provide them today or before the end of the week.
The Solicitor General (Robert Buckland)
I will write to the hon. Lady this week.
Mrs Lewell-Buck
I thank the Solicitor General for that.
There is a further cost issue to consider, which is the impact the proposed change would have on local authorities. Last week, the Minister and I had a long discussion about the ongoing dialogue with local authorities. I stand by what I said last week. I am not convinced that discussing with local authorities the impact of these burdens that will be placed on them once the Bill is already in place is the right way to do things.
Asylum seekers who find themselves destitute will be scooped up by local authority services—statutory homelessness services, child protection services under the Children Act 1989, mental health services, adult social care services and so on.
Chloe Smith (Norwich North) (Con)
I wonder whether it would be helpful if we were clear about our language. The hon. Lady used the phrase “asylum seekers”, and said that they will be forced to turn to the services she listed, but we are talking about failed asylum seekers—people who have exhausted their appeal rights. By that process, they have been deemed not to be refugees. The United Nations High Commissioner for Refugees said:
“National asylum systems are there to decide which asylum-seekers actually qualify for international protection.”
We have a system for a reason, and the hon. Lady’s use of the phrase “asylum seekers” in that sentence is not accurate.
Mrs Lewell-Buck
I thank the hon. Lady for that intervention. I made that error last week, too. I apologise again; I should have said “failed asylum seekers”, but what I am saying still stands.
Can the Minister clarify something? We had a long discussion last week, but I am still not entirely sure—this may be my fault, and I may be missing something—how the Bill fits with the ethos of other legislation in this country, which protects vulnerable people. I hope that the Minister can explain for my benefit—I am quite a simple character, and I like things in straightforward terms—how the Bill fits with the ethos of other legislation.
I feel strongly that this measure will potentially be a disaster for local authorities, which are already overwhelmed by funding pressures and will soon have a duty of care for other people as well. Asylum seekers are generally more concentrated in urban areas and areas of higher deprivation—the places where local authority budgets have been most dramatically cut in recent years. I do not need to remind the Committee that in the top 10 most deprived areas, the cost is 18 times higher per resident than in the 10 least deprived. If the Bill is passed, those local authorities will face a big surge in demand for such services. How will they pay for that? Will the Minister let us know whether he is going to offer them any funds?
Section 95 support cost the Home Office £45 million in 2014-15. Given that councils will have to process failed asylum seekers, assess their needs and so on, the process is likely to become much more expensive. The people concerned are spread across dozens of local authorities, which will entail duplication of work. What options do local authorities have? Should they cut services elsewhere, put up council tax or abandon their legal duties? The Bill’s lasting legacy may be to effect a massive transfer of responsibilities from the Home Office to local authorities, with no accompanying transfer of services or resources. On top of all the challenges that councils face, they will now be asked to do the Home Office’s job. The Government are washing their hands of failed asylum seekers and passing the buck to somebody else.
We must think of the human cost of causing families to live in the most dreadful poverty and separating children from their parents. When a family cannot feed their children, it is considered neglect. Children’s services will have to step in and take those children into care. I do not know what will happen when the time comes for the family to return. Will the child or children get returned to their family’s care? I have worked in child protection with a large number of families who have fled war and persecution, and I cannot stress enough the long-term damage that the separation of a child or children from their family can do to their and their parents’ mental health and emotional wellbeing. At the end of the day, it is the migrants who will suffer, and our constituents will too, with public services pushed beyond breaking point as their local authority is forced to clean up the Home Office’s mess.
The Home Office must know that that is about to happen. When the section 9 pilots were trialled a decade ago, the Home Office said that they placed “significant demands” on local authority resources. I believe strongly that the Government are on the brink of making a terrible mistake that will simultaneously undermine efforts to process asylum seekers quickly and heap unmanageable new duties on some of our country’s most deprived local authorities. I urge Government Members to accept our amendments to avoid this disaster.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
The amendments would allow destitute refused asylum seekers to continue to receive the basic level of support.
On amendment 226, I should point out that what we mean by the basic level of support equates to only £5 in change a day and to housing being provided for those who have nowhere to live. I have to ask whether any of us could afford to live, to eat and to raise a family on that minimum level of support. I would think not. Amendment 227 aims to expand on that by ensuring that asylum seekers have the support they need to exist, although, again, providing only very basic support.
The oft-quoted 2005 Home Office pilot study concluded that the removal of, or reduction in, support provided to asylum-seeking families had no significant influence on removing people from the UK. In fact, the year-long pilot reported that the power to remove support from families
“did not significantly influence behaviour in favour of co-operating with removal…This suggests that the section 9 provision should not be seen as a universal tool to encourage departure”.
Therefore, even though the Bill in general has a poor evidence base, I would direct Members to the evidence that does already exist, which proves that removing all support from a family will have no impact on removing them any sooner from the country.
We have to ask why we are willing to leave people, including children, in such a perilous position. The Still Human Still Here coalition suggests that removing all support could have the opposite effect from the one intended, making it harder for people to be removed from the UK. Receiving continued support will encourage families to continue to stay in touch with the appropriate authorities. That point was expanded on during our evidence sessions by Judith Dennis, from the Refugee Council, who said:
“We think that the Bill is incompatible with the processes for families to engage with the Home Office if they want to return or have come to the end of the asylum process—these measures would not be compatible with that. The Bill will shift responsibility to local authority children’s services, which have a duty to support children in need. We do not think that it will achieve the desired outcome, partly because families will inevitably lose touch with the Home Office—there will be no incentive for them to keep engaging with the Home Office to try to resolve their situation.”––[Official Report, Immigration Public Bill Committee, 20 October 2015; c. 5, Q1.]
The amendments aim to correct that by proposing that people be given basic support—and let us be clear that amendment 227 would only increase support from just over £5 a day to just over £6 a day. However, it does set a baseline of 60% of income support, which will, we hope, ensure that families receive the necessary support, but also that they continue to engage with the Home Office.
As a father, I do all I can to ensure that my kids have whatever they need, and I am sure all parents in the room and beyond feel the same. We would not accept our kids losing support, so why should we be content for the children of failed asylum seekers not to receive, at the very least, the basic level of support that we would want and demand? When it comes to children, we should not care where they are from or what their immigration status is—we should just help them when they need our help.
Paul Blomfield (Sheffield Central) (Lab)
Does the hon. Gentleman agree that the evidence we received was unanimous on this issue? That was the case right through to the supplementary evidence we received from Lord Green, of Migration Watch UK, who said:
“As regards to the treatment of failed asylum seekers with children, we are clear that they have no right to remain in the UK and should leave but, where children are involved, we believe that the process should take this into account.”
Unless the amendments are accepted, we will not be taking them into account.
Gavin Newlands
Absolutely. I agree with the hon. Gentleman. I think I referenced Lord Green’s evidence on children in an earlier sitting.
If the clause is left unamended, it will see us punishing children for their parents’ actions. If pursuing the goal of removing all forms of support is intended to cut the costs to the Government, the clause also fails on that account. We have received countless pieces of evidence suggesting that removing all support will see us simply pass the costs from central to local government. That was articulated during an evidence session by Stephen Gabriel, who said:
“if the Home Office stops supporting those families, that will potentially have a negative impact on the local authority. That could be a challenge for the local authority.”––[Official Report, Immigration Public Bill Committee, 20 October 2015; c. 71, Q162.]
Liberty has further made the point that, despite assurances from the Government, it seems inevitable that
“some costs will be transferred to local authorities because the…removal of accommodation and support, from children in particular, risks violations of the Article 3 prohibition on inhuman and degrading treatment.”
Given all that, and given the strength of feeling evidenced in a number of contributions to the debate, I hope Government Members will give the amendment serious consideration.
James Brokenshire
We have obviously had a wide-ranging debate on the amendments. In many respects, it has repeated some of the in-principle issues Opposition Members highlighted in respect of schedule 6. I therefore do not intend to spend a huge amount of time repeating the arguments we debated last week.
Amendment 226 seeks, in essence, to maintain the pre-existing arrangements. Under the current provisions in the Immigration and Asylum Act 1999, failed asylum seeker families continue to receive Home Office support as though their asylum claim and any appeal had not failed, with the onus on the Home Office to demonstrate non-compliance with return arrangements before support can be ceased. The amendment would maintain that position. We believe that is wrong in principle and would send entirely the wrong message to those who do not require our protection. It would also continue to undermine public confidence in the asylum system.
The current position needs to change. Failed asylum seekers are illegal migrants. Our focus should be on supporting those who have not yet had a decision on their asylum claim and who may need our protection, rather than on those who the courts have agreed do not need our protection and should leave the UK. Instead of indefinitely supporting failed asylum seekers because they have children, we need a better basis of incentives and possible sanctions. We, together with local authorities, can then work with these families in a process that secures their departure from the UK, and schedule 6 to the Bill will deliver that.
Home Office support will, of course, remain available if there is a genuine obstacle to the family leaving the UK. Opposition Members sought again to highlight the 2005 pilot, but I have already indicated the differences between these arrangements and the pre-existing arrangements. We have reflected carefully on those experiences and taken account of them, in order to provide a different approach. If failed asylum seekers decide to remain here unlawfully rather than leaving voluntarily, they should not automatically continue to receive Home Office support simply because they have made a failed asylum claim. We need a better basis of incentives, and we believe the Bill will deliver that.
Paul Blomfield
I am listening carefully to the Minister’s response to points made by Opposition Members. Does he accept there is a real risk that this measure will leave some families in destitution and therefore open to the sort of exploitation that part 1 of the Bill seeks to avoid?
James Brokenshire
That is why the arrangements have been framed as part of a continuing process in respect of those whose asylum claims have not been upheld by the courts, in terms of the notification periods and further safeguards that exist.
The hon. Member for South Shields has highlighted on a number of occasions the position of local authorities and whether this measure will transfer costs and obligations to them. I have responded to that previously. We propose that Home Office support will continue to be available to a failed asylum seeker with a dependent child or children while there remains a legal obstacle to their departure from the UK—for example, outstanding further submissions, documentation not being available or practical obstacles such as medical reasons. Human rights issues should not be engaged by the cessation of Home Office support, as any risk of destitution could be avoided by the family’s departure from the UK with assistance with the required travel costs or by their compliance with the conditions of Home Office support—for example, in applying for any travel documents required to facilitate their departure. The package of measures will be subject to the new burdens assessment process in the usual way. I say to the hon. Lady that a system has been put in place to ensure that issues related to the transfer of burdens are properly factored in and addressed.
Schedule 3 to the Nationality, Immigration and Asylum Act 2002 provides for a process whereby local authorities assess human rights-related issues such as destitution. That will continue to apply. Equally, our duties in respect of children under section 55 of the Borders, Citizenship and Immigration Act 2009 will still apply. We are discussing with local authorities the practical implementation of streamlining some of the processes in schedule 6 to those in schedule 3 to the 2002 Act, to ensure that they operate efficiently and effectively. That feeds into the concept of family returns, which I spoke about previously, and the considered fashion in which we are approaching this. This is not come automatic cliff-edge point, as the provisions will apply to those who have a negative asylum decision subsequent to the Bill being in place. Therefore, it forms part of the overall removal strategy that I have previously explained.
Anne McLaughlin
I cannot remember his exact words, but the Minister seemed to say that families are choosing, and refusing, to go back to where they came from, and therefore they cannot get support. Without going into the arguments of whether they can go back, do the children of those parents have any choice? Can the children choose to go back to where their parents came from, or are they at the mercy of decisions made by the adults around them? If the answer is that they are at the mercy of those adult decisions, do we owe them anything?
James Brokenshire
I understand how the hon. Lady seeks to argue her points and I know how strongly she feels on these issues. If one follows the line of what she has just said, it would be impossible to deport any families who are here illegally. She indicated that because someone had a child, it is not the child’s fault that the family are about to be deported; therefore the family cannot be deported. I respect her position in articulating that, but I cannot agree with it.
Anne McLaughlin
On a point of clarification, I was not saying anything of the sort. I said that while they are here and those children have no input into the decision making, should we support them or punish them as well, because of the decisions of their parents?
James Brokenshire
The hon. Lady says that if parents who are deliberately trying to frustrate the system have children, the state should automatically continue to support them. The point of the measures is that, on the basis of remaining obstacles, support will continue for all of the family in that situation.
That is why we have the family returns process. We have assisted return, where families are actively encouraged and assisted to leave while we put the family returns process in place, which has the humane nature of supporting people to see that they return. Obviously, where there are barriers to removal, support will remain, as I have already indicated.
Simon Hoare (North Dorset) (Con)
We have heard the hon. Member for Glasgow North East, but she has a topsy-turvy way of looking at the issue. Surely, parents have the primary duty of care for their children. The hon. Lady and the amendment seem to suggest that parents can abdicate that responsibility but expect the state to step in to have a greater level of care and concern for their children. That is loco parentis gone bonkers.
James Brokenshire
My hon. Friend makes a clear point on where support should be provided. We do have duties in respect of section 55 of the Borders, Citizenship and Immigration Act 2009. Under section 55, child welfare does not require—if a failed asylum-seeker family decides to remain here unlawfully when they could and should leave the UK—that they should automatically and indefinitely continue to receive support simply because they have made a failed asylum claim. That is the nub of the argument. I appreciate that there is a fundamental difference in the Committee. I note that hon. Members are seeking to catch my eye to give way. That is the nub of the argument and it seems there is a difference on that principle.
Anne McLaughlin
The Minister is talking about people who have barriers to returning being exception, but regardless of the arguments about whether the adult is able to make that decision, the barrier to the child returning may be the parent’s decision. In that case the child will have barriers, but will not be an exception because the parents are not seen to have barriers.
On abdicating responsibility, I thought that if a parent was deemed to do that—I am not arguing that asylum-seeking parents are doing that—the state was supposed to take over. I thought that was what the legislation that the hon. Member for South Shields mentioned was about. Is there a duty on the state to take over if responsibility has been abdicated?
James Brokenshire
I think the hon. Lady is confusing certain issues. As I have already indicated, certain obligations exist under schedule 3 and also under section 17 of the Children Act 1989. We are discussing in detail with local authorities the interrelationship between such backstop support powers and how the different regimes fit together. That needs to be done in the joined-up fashion of understanding that if families are here unlawfully, they could and should leave and there needs to be encouragement through the returns process to ensure that they do. It is in that considered way that we propose the provisions, although hon. Members may disagree with our approach. That is, however, the stance that we seek to take, given the factors I identified and the interrelationship with local authorities I indicated.
Let me turn to amendment 227, which seeks to set the level of the cash allowances given to asylum seekers at 60% of the income support rate for people aged over 25. That would raise the amount provided from £36.95 to £43.86 a week.
The cash allowance is only one element of the support package provided to ensure that asylum seekers are not left destitute. That package needs to be seen as a whole. Accommodation is provided free and comes fully furnished and equipped with bed linen, towels and kitchen utensils. Utilities such as gas, electricity and water are also provided free. Recipients receive free healthcare and schooling for their children. The cost of travel to appointments to pursue an asylum claim—to attend asylum interviews, appeal hearings and meet legal advisers, for example—is also provided separately.
Keir Starmer
Will the Minister confirm to members of the Committee who seek comfort from the fact that we have just discussed provisions that apply to asylum seekers who have exhausted their process, that we are now discussing something that applies to all asylum seekers, including, for example, a Syrian who has got to this country in the last few months by whatever means? I take into account what he said about accommodation, but in relation to the comments of the hon. Member for Glasgow North East, the rates in the package are £1.23 a week for toiletries and 69p for healthcare. Given the particular examples that she gave, which made people feel uncomfortable, perhaps Members would like to go to Boots this afternoon and see what they could get for that.
James Brokenshire
The hon. and learned Gentleman wrapped up two points. He said that the package would apply to Syrians applying for resettlement here, but that is a separate regime. [Interruption.] He used the pejorative term of Syrians, so it is important to understand the support provided through resettlement when refugee status is accepted, because then there would be entitlement to mainstream benefits. We are talking about the mechanism for those of all nationalities who have claimed asylum in the country but whose claims have not yet been determined.
Keir Starmer
The Minister will know that I deliberately did not give that example. I said a Syrian who had arrived in this country from Europe or somewhere—not on the package. Any Syrian who is now in Europe and arrives in this country not under the resettlement regime will come on to this regime. That is the example I was giving.
James Brokenshire
I am grateful to the hon. and learned Gentleman for that clarification, because he had not given that clarity initially and it is important to understand the different regimes that operate for those with refugee status and for someone who has come here and claimed asylum. It is helpful that he explained his intent. That is why I said what I did about how asylum support rates are intended to operate for all nationalities of people claiming asylum in this country.
I come on to the second point about the amount of cash, having already indicated to the Committee all the other support mechanisms provided to those seeking asylum fairly and appropriately. The cash amount is provided with reference to a specific legal test set out in section 95 of the Immigration and Asylum Act 1999. The allowance is there to cover what is described as “essential living needs”.
The Home Office reviews the level of the cash allowance each year but the way that review is conducted changed in 2014. Following a judicial review, the Home Office put in place a new assessment methodology designed to give full effect to the findings of and the valuable guidance given by the court. It is important to understand how the rates are set in the context of what the court said and the guidance that it provided. First, a careful assessment is made to identify all needs that are essential and not covered through some other part of the package.
The needs identified in this way are: sufficient food to eat healthily, adequate clothing, provision to cover toiletries, household cleaning items and non-prescription medicines, sufficient provision for travel and communications for everyday purposes and to maintain interpersonal relationships and a minimum level of participation in social, cultural and interpersonal relationships. That is a term of art and an essential need identified by the court. Having identified all these particular needs, an assessment is made of how much money is required to meet each of them. This is done through a mixture of market research into the cost of the particular items and analysis of Office for National Statistics data about expenditure on the items by people in the lowest 10% income group of the UK population. This approach resulted in the allowance for a single asylum seeker being set at £36.62 per week in 2014, rising to £36.95 per week from April 2015. In 2015 we also decided that providing £36.95 for every person in the household—in other words for the asylum seeker and each dependant—would be sufficient to cover the essential living needs of all family groups. This is because of the economies of scale available to large households and is an approach taken by other European countries as well.
I recognise that many organisations representing asylum seekers and children disagree with the changes, but none of these groups has provided detailed evidence to show that the findings of the review are wrong.
Paul Blomfield
The Minister referred to ONS data in his justification for the formula that the Home Office uses. He will acknowledge that the Home Office deliberately reduces the sum calculated as essential by the ONS in several key respects, for example for clothing. How does he justify that?
James Brokenshire
I am looking at a letter sent out in July at the time of the consideration of the review and there are some adjustments. I am looking at an adjustment in relation to food and non-alcoholic drinks which was set under ONS expenditure data in 2013 but was increased after reasonable adjustment. So there is no mindset of trying to adjust down, but of seeking a fair and appropriate approach in respect of the attributable costs.
Paul Blomfield
The Minister’s point about food is of course right. Clothing goes in the other direction. If we look at all the essential living needs, the ONS data would suggest that a level of £40.47 was appropriate, which the Home Office has downgraded to £36.95. Is that not the case?
James Brokenshire
The hon. Gentleman was seeking to impute that there was a preordained mindset to adjust everything down. I have already given him an example where there has been an adjustment up. It is that fair assessment, subject to reasonable adjustment, based on the twin tests of ONS data and market research data on costs, which produces the figure. I say to him again that concerns have been expressed by various groups representing asylum seekers and children, but none has provided detailed evidence to show that the findings of the review are wrong. We will continue to assess, we will hold a further review of the allowance levels for 2016 and we would welcome detailed evidence and submissions about the level of the allowance. That is the right forum to address any perception that the allowances are not adequate.
We also do not consider that seeking to apply this to a level under income support is appropriate. It is not referencing the essential living needs test. This was debated by the other place on 27 October, when a motion to annul the regulations that implemented the findings of the most recent review was rejected. I recognise that there are differences of view on this but, on this detailed analysis, on some of these specific items, I would welcome further submissions to show whether the evidence that has been presented to us needs further reflection. Obviously we would consider that in setting the levels for 2016, but I urge that the amendment be withdrawn.
Keir Starmer
The two amendments go to the heart of one of the most important provisions. On the withdrawal of support from certain categories, I will not rehearse the powerful argument showing that all the evidence says that this will not achieve the desired objective and in all likelihood will push people into destitution and exploitation. That is why it is such a fundamental issue.
A lot has been said already about the daily rates. It is true that the food and non-alcoholic drink rate is up from the ONS data to £24.96. That is just over £3.50 per day for the very many weeks and months that it takes for a decision to be made about someone who is seeking asylum and may have come from any number of countries, fleeing persecution. All the other rates that have been adjusted, have been adjusted down.
Keir Starmer
All the others that have been adjusted have been adjusted down. Some have not been adjusted. I will happily take an intervention if I am wrong about that. Clothing and footwear has gone down from £4.62 to £2.51, and travel from £3.62 to £3. That is 45p or so a day for travel. I do not know in which city people are expected to live for these weeks or months, but travelling for 45p a day is not an easy task. There are not many bus fares that can be bought for that even in one direction. On those adjustments down, the question that my hon. Friend the Member for Sheffield Central put was not whether this was a preordained decision but whether that downward trend could be justified. That question was not answered.
The amendments go to the heart of this part of the Bill and I will press them to a vote.
Question put, That the amendment be made.
Keir Starmer
I beg to move amendment 228, in schedule 6, page 100, line 16, at end insert—
‘(43A) The Immigration Act 1971 is amended as follows.
(43B) After section 3(9) (general provisions for regulation and control) insert—
“(10) In making rules under subsection (2), the Secretary of State must have regard to the following.
(11) Rules must provide for persons seeking asylum, within the meaning of the rules, to apply to the Secretary of State for permission to take up employment and that permission must be granted if—
(a) a decision has not been taken on the applicant’s asylum application within six months of the date on which it was recorded, or
(b) an individual makes further submissions which raise asylum grounds and a decision on that fresh claim or to refuse to treat such further submissions as a fresh claim has not been taken within six months of the date on which they were recorded.
(12) Permission for a person seeking asylum to take up employment shall be on terms no less favourable than those upon which permission is granted to a person recognised as a refugee to take up employment.””
This proposed amendment would provide for asylum seekers to be able to work if their claim is not determined within the Home Office target time of six months.
The amendment follows amendment 227 in that it would provide for asylum seekers to be able to work if their claim was not determined within the Home Office target time of six months. One of the injustices here is that those who have to exist on the low rates that the Committee has just discussed must do so under a system that prohibits them from working.
More than 3,600 asylum seekers currently wait more than six months for an initial decision on their cases. They are the individuals surviving on just over £5 a day, as we have just discussed. As things stand, they can apply for permission to work only if they have been waiting for more than a year for an initial decision. If that permission is granted, they are allowed to seek employment only in an occupation listed on the shortage occupation list.
This system has changed over the years as a result of a number of challenges and different policy decisions. The evidence that not allowing people to work deters them from coming to the UK is extremely hard to maintain when the position in other EU countries is taken into account. Some 11 EU countries grant permission to work after six months or less, if a decision has not been made on the asylum application. All those countries have had policies in place for many years. The recast EU reception conditions directive reduces the period an asylum seeker can be excluded from the labour market in an initial decision to nine months. Some 27 EU states have more generous policies than the UK as a combined result of those provisions.
This simple amendment would put people who have had to wait more than six months for their decision in a position where they can work, which is what many of them want to do. The net result for the taxpayer is likely to be a saving rather than a cost.
Sarah Champion
I would like to build on my hon. and learned Friend’s well made argument. I thank the Regional Asylum Activism Project for Yorkshire and Humberside for their help.
Despite often arriving in the UK with a host of skills and experiences gained in their country of origin, hardly any asylum seekers are allowed to work while their claim is being assessed by the Home Office. Only asylum seekers who have waited over 12 months for an initial decision on their case are eligible to apply for permission to work, but even those granted permission to work are not allowed to work in a self-employed capacity, set up a business, or take up a job that is not included on the highly specialised shortage occupation list. The current restrictions on accessing employment for people seeking refugee protection stops many highly skilled, experienced and educated individuals from contributing to the UK’s economy and society. For example, refugees started Marks & Spencer and brought us fish and chips and the Mini. People seeking refugee protection today will include, among many others, entrepreneurs, doctors, nurses, engineers, teachers, scientists and solicitors. Fundamentally, allowing asylum seekers to work will make economic, social and political sense.
First, on economics, if asylum seekers were granted permission to work, they would be able to contribute to the UK economy immediately through income tax, adding directly to the UK’s coffers. Equally, amounts spent on asylum support would decline, resulting in a net benefit to the economy. That has been recognised by the European Commission, which states:
“Mandatory unemployment… imposes costs on the State through the payment of additional social welfare payments.”
Government research has also recognised that delayed entry to the labour market, loss of skills and confidence, and difficulty getting qualifications recognised in this country can cause problems even when status is granted, leading to high levels of unemployment and underemployment. Allowing people to work while waiting for their asylum claim decision will not only allow them to start rebuilding their lives free from persecution, but allow them to start the journey towards meaningful employment as soon as possible.
Secondly, the indirect costs of enforced poverty are significant. Without the right to work, people in the asylum system are forced to rely on Government support to survive, but with asylum support rates set at £5.28 a day—barely 50% of the income support equivalent—many in the asylum system are forced into institutionalised poverty. As I and other hon. Members have said, extended periods living in poverty have huge impacts on physical and mental health and self-esteem. For some, a reliance on Government support is considered shameful, as they are unable to support themselves and their families; that concern has been raised by the cross-party parliamentary inquiry into asylum support for children and young people. Research from the University of Leeds and the University of Salford found that the experience of poverty was a key factor in pushing many individuals in the asylum process into exploitative and precarious working conditions. I suggest that providing those in the asylum process with the legal permission to work is in line with the Government’s commitment to ending modern day slavery.
Thirdly, the rationale for the current policy does not hold up. The reasons for restricting permission to work for asylum seekers hinge on the idea that it will act as pull factor, but it is important to remember the conclusions of research the Home Office commissioned in 2002:
“There was very little evidence that the sample respondents had a detailed knowledge of: UK immigration or asylum procedures; entitlements to benefits in the UK; or the availability of work in the UK.”
That was confirmed by a review of the 19 main recipient countries for asylum applications in the OECD in 2011, which concluded that policies that relate to the welfare of asylum seekers did not impact on the number of applications made in destination countries. All but one of the countries that granted permission to work to people seeking asylum received fewer asylum applications than the UK in 2012 and 2013.
A change of policy to allow asylum seekers the permission to work is long overdue. In 2007, the Joint Committee on Human Rights described the denial of the right to work for asylum seekers as part of a “deliberate policy of destitution”, which was breaching human rights. In 2013, the cross-party parliamentary inquiry into asylum support for children and young people called for parents and young people to be given permission to work while their claims were being decided. Thirteen local authorities have passed motions condemning the destitution of people seeking asylum. To date, 71 current Members of this House, of all political persuasions, have signed Still Human Still Here’s declaration on permission to work. They join the Trades Union Congress and a broad coalition of organisations, from Refugee Council to Crisis, Doctors of the World to The Children’s Society, in their call for people seeking refugee protection to be allowed to live in dignity, not destitution.
Allowing asylum seekers permission to work will enable many to support themselves through the asylum process. We should grant permission to work to all asylum seekers if they have been waiting more than six months for an initial decision, up until their protection needs are recognised or a safe route back to their country of origin has been negotiated. For this reason, I urge the Minister to support the amendment.
James Brokenshire
This is clearly a debate that has been going on for some time. I know there are differences of opinion on the time period that should or should not operate for those who have claimed asylum in this country. The amendment would radically change existing permission to work arrangements for asylum seekers, allowing permission to work where an asylum claim is still outstanding after six months instead of 12 months, removing the caveat that any delay must not be of the asylum seeker’s own making and lifting all restrictions on the type of employment available. Those are the three elements that have been advanced by Opposition Members.
The amendment would enable persons to take any employment of their choice, rather than be restricted to those on the shortage occupation list published by the Home office. The arguments made were initially about compliance with some of our EU obligations and what other EU partners are doing—I will come on to that—and then, separately, what those who are working could contribute. Also, some evidence was adduced on whether permission to work is a pull factor. Let me deal with each in turn.
On the issue of the EU, our current position is consistent with our obligations under the EU reception conditions directive, which sets out the minimum benefits and entitlements afforded to asylum seekers while they await a decision on their claim. That is reflected in part 11B of the immigration rules, but we decided not to opt in to the recast reception conditions directive requiring member states to grant automatic access to the labour market for asylum seekers after nine months, regardless of a decision at first instance being taken, because we considered the Commission’s proposal could undermine our asylum system by encouraging unfounded claims from those seeking to use the asylum system as a cover for economic migration.
It is important to understand that asylum claims cover a range of different circumstances and scenarios. Someone might have claimed asylum at their point of arrival, or been smuggled into this country and then claimed asylum. Someone may already be in the UK, having come via a lawful route, and circumstances change in their home country, so they might claim asylum, or they simply seek to stay here and they use an asylum claim as a means of extending their stay in this country. Sadly, that is the reality of some of the asylum claims that we seek to respond to within the system.
The amendment poses a challenge. Should we be taking steps that are more consistent with our EU partners? I think that in the UK it is right that we should form our own decisions, based on our assessment of our asylum system and what we judge is in the best interests of this country, while supporting the processing and the proud tradition that we have had in this country of granting asylum in this country.
On the labour market issues, an argument was advanced in the context of the asylum support budget, but that argument does not take into account the potential to open up the resident labour market in a way that could blur the distinction between economic migration and asylum. I genuinely worry about measures that blur that distinction. People could apply for asylum but not engage with the process, with the deliberate intent of delaying the process so that they can then be granted the benefit of being able to work after the end of the six-month period. We are concerned that this may lead to an increase in asylum applications that would divert valuable resources away from ensuring that those genuinely in need of protection are recognised quickly, enabling them to integrate and begin rebuilding their lives. That is the approach that we have taken in seeking to ensure that the processing of asylum claims is much better than it was when this Government came in.
Paul Blomfield
If that is the case, presumably the amendment presents no risk or significant worry to the Government. Does the Minister accept that the longer somebody is out of the labour market, the more difficult it is for them to integrate—to get back into the labour market, to contribute to society and so on? Is there not an assumption of failure or refusal underlying the Government’s position, when in fact a very large number of asylum applicants are successful and we all share the objective of seeing them successfully integrate into the labour market?
James Brokenshire
The hon. Gentleman makes the point that I was underlining about the need to see that asylum claims are processed as efficiently and effectively as possible. However, I do think that the amendment would blur the lines and might well lead to spurious or inappropriate asylum claims being made, perhaps by people already in this country coming to the end of their stay, whether they came as visitors, students or via other routes. That is a real challenge. The amendment would undermine the integrity of what we all believe in: providing protection to those who are fleeing persecution, ensuring that we have a system that is efficient, effective and focused on making those decisions and seeing that people receive support as recognised refugees at the earliest opportunity. It risks more claims, of whatever character, being made.
We also have to bear in mind the resident labour market. It is argued that if you give an asylum seeker the right to work, you are, in essence, denying a job to someone who is already living in this country lawfully. Because of the implications of that we judge that it is right to have a system that recognises that if there is delay—we judge that 12 months is the right period—people can work, but they should not be seeking to frustrate or delay the system; that test has to be captured as well. It is about shortage skills, those that are needed. That is why the focus is there, otherwise we get into a blurring of issues in relation to economic migration. We must do our utmost to ensure that people in this country who have the skills and the ability are able to access the job market.
Sarah Champion
I hear the Minister’s argument. Does he know—if he does not, perhaps he will write to us—the average length of time that an asylum claim takes? From the casework that I get, it seems to be considerably more than 12 months normally, so does his argument stack up? What is the difference between six months and 12 months if the average is 18 months?
James Brokenshire
I can tell the hon. Lady that 85% of cases are straightforward and we have a service standard of dealing with those within six months. We dealt with a big backlog earlier this year—that is why I make the point about the effort that has gone in. Many people in the asylum processing system will say that asylum processing is probably in as good a place now as it has been in for many years, but of course I look for further improvements; we do not sit back. Equally, it depends on some of the pressures in terms of changes or increases in the numbers of those who are claiming asylum. We are very vigilant in monitoring how we are dealing with this. I can say to the hon. Lady that 85% of cases are straightforward and that our service standard is to deal with those within six months. Obviously, it is difficult to know what proportion of the people in her constituency may be in the situation she describes; it is difficult to draw that parallel. However, I hope that it is helpful at least to set out the approach that we are taking and that balance in terms of how asylum claims are dealt with.
We judge that the current policy strikes the right balance. Asylum seekers are provided with support and accommodation, but if their asylum claims are undetermined for 12 months for reasons outside their control, they can apply for permission to work. We believe that that is a fair and reasonable policy that we should keep. For the reasons that I have outlined, we ask that the amendment be withdrawn.
Keir Starmer
The Minister puts forward a number of good reasons for the decisions to be made within six months and prays in aid the service standard, which is to be supported, but the real question is: how many cases are actually decided within the service standard? We all have examples of where they are not. We know that the number is roughly 3,600. I am sure that the Minister did not welcome the ombudsman’s report published this morning, or at least reported on this morning, about the very high level of complaints upheld by the ombudsman, particularly in relation to immigration decision making. That does not mean that things are not moving in the right direction, but it does mean that very many cases are not decided within the six-month period.
James Brokenshire
The point that I was making about the service standard for dealing with the 85% of cases that are straightforward was that that has been met. I do not know whether that is helpful to the hon. and learned Gentleman in relation to his point.
Keir Starmer
I am grateful to the Minister for that, but it still leaves outstanding the 3,600 cases in which people have not had their decision made within the six-month period. The Minister says that there is a concern that if there is a change in the current regime to a six-month regime, that may lead to adverse consequences, but as I understand it, that is simply unevidenced. Whatever research has been carried out in this area, it is unevidenced. It is a fear, but it is an unevidenced fear. The reason why I cited the EU provisions was not so much to argue that we should necessarily align ourselves with the EU position and should not take our own position as it was to say that it is much more difficult to make the argument that a six-month regime would operate as a pull factor if other countries are operating that regime at the moment.
James Brokenshire
Will the hon. and learned Gentleman accept that the evidence that has been cited is from prior to the current migration crisis and that many EU countries are reflecting on their support and other mechanisms for providing asylum, precisely because of a number of these factors?
Keir Starmer
I do accept that, although I think that anyone in this Committee would be hard-pressed to say that the migration crisis of this summer was linked in any way, shape or form to whether someone could work after six months or after 12 months.
James Brokenshire
The reason why I intervened on the hon. and learned Gentleman was that his hon. Friend the Member for Rotherham, I think, had alluded to the timing of the reports. The point that I was trying to get across—I will make it briefly in this intervention—was that, sadly, we do see people traffickers, through social media and other means, seeking to set out the position of certain member states and what people are entitled to and, in a very deliberate way, encouraging people to try to come to other European countries.
Keir Starmer
The Minister was intervening on me. I take that intervention; I have no quarrel with it in any way, shape or form. This is an important point, because there is a real fairness and justice in allowing people to work if they want to work, rather than surviving on £5 a day. Most people would agree on that. The concern expressed by the Minister is that if the period is too short, it can have adverse consequences, which is a serious point that needs to be debated.
Paul Blomfield
My hon. and learned Friend will note the enthusiasm with which the Minister is intervening on him. Does he share my hope that the Minister might intervene to provide some more evidence regarding the pull factor? In his earlier comments, the Minister said he would outline exactly why the Government thought that was not the case, but he has conspicuously failed to do so. Now would be a good opportunity for him to do that.
Keir Starmer
In fairness, knowing the Minister, I think that if there was a sound evidence base, he would have referred to it already and the fact that he has not speaks volumes. There has obviously been a discussion about the migration crisis this summer and the impact—
The Chair
Order. I am sorry to interrupt, but I thought it might be useful to the Committee—I did say this right at the beginning—and particularly for new Members to say that Members are not restricted to one speech. As this debate has developed, if more Members want to catch my eye, that is quite appropriate.
Keir Starmer
Thank you, Mr Bone.
Clearly, as a result of what has happened this summer, there will be discussions about all aspects of the framework across the EU in relation to migration, but at this point, I was only praying in aid the EU provisions to counter any suggestion that the change proposed in the amendment would act as a pull factor when so many other countries in Europe have operated a different system for some time. In the crisis this summer, although there may be individual examples of traffickers exploiting pretty well every provision that they are capable of exploiting, I would have thought that the vast majority of cases had absolutely nothing to do with whether people can work after six or 12 months.
The Chair
I am not entirely sure whether the shadow Minister is pressing the amendment to a Division.
Keir Starmer
I do apologise, Mr Bone. That is because I did not say one way or another, but I will press the amendment. I am grateful for the steer.
James Brokenshire
I beg to move amendment 105, in schedule 8, page 107, line 34, leave out sub-paragraphs (ii) and (iii).
This amendment makes minor drafting changes by omitting the unnecessary alterations to the conjunctions in section 25B(3) Immigration Act 1971.
James Brokenshire
Amendments 105 to 112 are technical corrections to the drafting of the Bill. I will provide a brief explanation.
The lead amendment makes minor drafting changes by omitting the unnecessary alterations to the conjunctions in section 25B(3) of the Immigration Act 1971. Amendment 106 makes a minor amendment to correct the reference to which paragraph requires amending. Amendment 107 ensures that immigration officers must seek authorisation from the Secretary of State before exercising the maritime powers in relation to a foreign ship, or a ship registered under the law of a relevant territory, within UK territorial waters adjacent to Northern Ireland. That aligns the provision with the equivalent provisions applicable to UK territorial waters adjacent to England, Wales and Scotland. Amendment 108 removes the superfluous definition of “home state” and has no substantive effect. Amendments 109, 110, 111 and 112 are all minor drafting changes to ensure consistency of language throughout the schedule.
Amendment 105 agreed to.
Amendments made: 106, in schedule 8, page 108, line 9, leave out “28A” and insert “28A(3)”.
This minor amendment substitutes “28A” for “28A(3)” to correct the reference to which paragraph requires amending.
Amendment 107, in schedule 8, page 109, line 26, after “before” insert “an immigration officer,”.—(James Brokenshire.)
This amendment ensures that immigration officers must seek authorisation from the Secretary of State prior to exercising the maritime powers in relation to a foreign ship or a ship registered under the law of a relevant territory, within UK territorial waters adjacent to Northern Ireland. This aligns the provision with the equivalent provisions applicable to UK territorial waters adjacent to England, Wales and Scotland.
Keir Starmer
I beg to move amendment 229, page 109, line 35, in schedule 8, at beginning insert—
‘( ) Hot pursuit can only be commenced when a ship is in United Kingdom waters.”
Probing amendment to provide the Minister with an opportunity to confirm that hot pursuit will only start when the ship is in territorial waters, as required by Article 111 of the UN Convention on the Law of the Sea.
The amendment is a probing one and, following our debate, we might not have to press it to a Division. There are provisions on hot pursuit in article 111 of the UN convention on the law of the sea. We tabled the amendment to seek assurance that the schedule, which is on maritime enforcement, is aligned with that international obligation, providing the Minister with the opportunity to confirm that hot pursuit will start only when a ship is in UK territorial waters. If that is the case, the provisions in the schedule will align with article 111 of the UN convention and the amendment is unnecessary.
James Brokenshire
The right of hot pursuit from territorial waters into international waters has long formed part of UK common law and reflects the provisions in article 111 of the UN convention. The Bill preserves the common law position by virtue of new section 28P(10) of the Immigration Act 1971, inserted by schedule 8. I can therefore confirm that under the maritime powers in the Bill, hot pursuit will commence only when a ship is in territorial or internal waters, as permitted by article 111 of the UN convention. In the light of that assurance, I hope the hon. and learned Gentleman is minded to withdraw the amendment.
Keir Starmer
I am, and beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment made: 108, in schedule 8, page 111, leave out lines 21 to 24.—(James Brokenshire.)
This amendment removes the superfluous definition of “home state” and has no substantive effect.
Keir Starmer
I beg to move amendment 236, in schedule 8, page 113, line 29, at end insert—
“(3A) If in the course of questioning or otherwise a person expresses to or in the presence of an immigration officer, a fear of return that may be a claim for asylum then the person shall be taken to the UK for that case to be considered.”
Probing amendment to seek assurances the powers granted in the Bill will not be used to push back asylum seekers at sea.
The Chair
With this it will be convenient to discuss the following:
Amendment 237, in schedule 8, page 118, line 7, at end insert—
“(3A) If in the course of questioning or otherwise a person expresses to or in the presence of an immigration officer, a fear of return that may be a claim for asylum then the person shall be taken to the UK for that case to be considered.”
See explanatory note for Amendment 236.
Amendment 238, in schedule 8, page 122, line 29, at end insert—
“(3A) If in the course of questioning or otherwise a person expresses to or in the presence of an immigration officer, a fear of return that may be a claim for asylum then the person shall be taken to the UK for that case to be considered.”
See explanatory note for Amendment 236.
Keir Starmer
I will deal with the amendments in the group together, as amendments 237 and 238 would simply apply the provisions of amendment 236 to Scotland and to Northern Ireland. Again, it may be that the Minister’s remarks mean that there is no need to press the amendment.
Our concern is that the powers in the schedule for immigration officers to detain or search those found on boats in UK territorial waters should not be used to push back asylum seekers arriving by boat. As things stand, claims for asylum can be made in UK territorial waters, and if made are dealt with in accordance with the appropriate procedures. There is a wealth of support for that remaining the position. The amendment is probing, and if the Committee is given an assurance on the issue I have raised, I may not need to cite that great wealth of support.
James Brokenshire
I will give a brief response to the hon. and learned Gentleman’s probing amendment. The powers in the Bill do not permit officers to turn vessels back. Under the power, vessels may be diverted only to a port in the UK. Upon arrival in the UK an individual wishing to claim asylum may do so and will be processed in the ordinary way. As is the case for all persons arriving in the UK, they will be subject to an immigration examination under the Immigration Act once they have arrived on land, and may also be detained under relevant provisions pending an immigration decision. If they are assessed as being an illegal entrant or attempted illegal entrant, they will be processed under paragraph 9 of schedule 2 to the 1971 Act, and removed accordingly.
Keir Starmer
I am grateful to the Minister for that assurance. What he has just said will appear on the record of the proceedings in Committee. In those circumstances, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Immigration Bill (Fourteenth sitting)
(8 years, 6 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 9 / Noes: 1 - Question accordingly agreed to.
The Committee divided: - Ayes: 2 / Noes: 9 - Question accordingly negatived.
Keir Starmer (Holborn and St Pancras) (Lab)
I beg to move amendment 230, in schedule 8, page 114, line 9, leave out “elsewhere” and insert “, at port or as conveniently as possible thereafter”
To limit powers of search to the ship, the port and as conveniently as possible thereafter, not anywhere in the country.
The Chair
With this it will be convenient to discuss the following:
Amendment 233, in schedule 8, page 114, line 22, leave out “elsewhere” and insert “, at port or as conveniently as possible thereafter”
See explanatory note for Amendment 230.
Amendment 239, in schedule 8, page 116, leave out lines 4 to 6
To prevent persons accompanying immigration officers carrying out searches in accordance with this part of the Bill.
Amendment 242, in schedule 8, page 116, leave out lines 13 to 18
To remove the immunity from prosecution and civil suit for constables and enforcement officers exercising powers under the Bill.
Amendment 231, in schedule 8, page 118, line 32, leave out “elsewhere” and insert “, at port or as conveniently as possible thereafter”
See explanatory note for Amendment 230.
Amendment 234, in schedule 8, page 118, line 45, leave out “elsewhere” and insert “, at port or as conveniently as possible thereafter”
See explanatory note for Amendment 230.
Amendment 240, in schedule 8, page 120, leave out lines 26 to 28
See explanatory note for Amendment 239.
Amendment 243, in schedule 8, page 120, leave out lines 35 to 40
See explanatory note for Amendment 242.
Amendment 232, in schedule 8, page 123, line 9, leave out “elsewhere” and insert “, at port or as conveniently as possible thereafter”
See explanatory note for Amendment 230.
Amendment 235, in schedule 8, page 123, line 22, leave out “elsewhere” and insert “, at port or as conveniently as possible thereafter”
See explanatory note for Amendment 230.
Amendment 241, in schedule 8, page 125, leave out lines 4 to 6
See explanatory note for Amendment 239.
Amendment 244, in schedule 8, page 125, leave out lines 13 to 18
See explanatory note for Amendment 242.
The Solicitor General (Robert Buckland)
On a point of order, Mr Owen. This morning I assured the hon. Member for South Shields that a letter would be written. It has indeed now been sent to you and Mr Bone. I hope that that will answer some of the queries that she raised in debate some sittings ago.
Keir Starmer
This is a daunting number of amendments, but most relate to extensions with respect to Scotland, Northern Ireland and Wales.
There are three substantive points. First, as the background to amendment 230, schedule 8 inserts new schedule 4A into the Immigration Act 1971. It covers enforcement powers
“exercisable by immigration officers, English and Welsh constables and enforcement officers”
in relation to ships. We spoke this morning about the power to stop, board, divert and detain a ship, and about the power to search and obtain information under new paragraph 3. Under new paragraph 3(2) the “relevant officer” may search
“the ship; anyone on the ship; and anything on the ship”.
The provision to which amendment 230 relates is new paragraph 3(8), which states:
“A power conferred by this paragraph may be exercised on the ship or elsewhere.”
“Elsewhere” is obviously widely defined. There is a power to search the ship and anyone or anything on it, which suggests that it is ship-focused, but sub-paragraph (8) is open-ended and provides for a power to search on the ship or anywhere. To some extent the amendment may have a probing function to enable us to understand the reasoning behind the provision, but our concern is that the power is very broad and we seek assurance that it is not intended that the power under the schedule could be exercised literally anywhere, at any time.
Secondly, to give the context to amendment 239, new paragraph 4 deals with the power of arrest and seizure; new paragraph 5 is on protective searches of persons—searches that can be made of individuals to seize and retain items; and new paragraph 6 deals with searches for nationality documents.
Then comes new paragraph 7, which is odd. The “relevant officer” appears pretty well through the Bill and is the officer with the relevant powers, training, duties and so on. New paragraph 7(1) provides for assistants:
“A relevant officer may…be accompanied by other persons”.
Then sub-paragraph (2) creates a very broad power:
“A person accompanying a relevant officer under sub-paragraph (1) may perform any of the officer’s functions under this Part of this Schedule, but only under the officer’s supervision.”
If that means what it says, anybody can exercise powers of search, including searches of people, and other powers without the need for any of the normal training and safeguards around the exercise of that power. On the face of it, simply anybody with the officer who is deemed to be an assistant can carry out all of these functions. That is an extraordinarily wide power. I do not think that exists in other areas of the law. Designating someone as an assistant in that way certainly does not exist in relation to police officers or other enforcement officers. That is a very broad power.
Thirdly, on amendment 242, we turn again to page 116 and the same set of provisions:
“A relevant officer is not liable in any criminal or civil proceedings for anything done in the purported performance of functions under this Part of this Schedule if the court is satisfied that—
(a) the act was done in good faith, and
(b) there were reasonable grounds for doing it.”
That is a very wide-ranging immunity which is as broad as anything I have ever seen. If, heaven forbid, there were a fatality when someone was being held or searched or force was used—as has tragically happened in immigration cases—this would exempt from any criminal or civil proceedings anyone acting in good faith with reasonable grounds, notwithstanding the other common law and statutory defences that would be available. On the face of it, that would prevent a court looking into the exercise of these powers. That is obviously a deep cause for concern. Although there are many amendments, those are the three core issues that run through the set.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
We can all agree that we do not want to see anyone attempt to gain illegal entry into the UK by means of being smuggled in an overcrowded boat or vessel. Ensuring that immigration officials have the proper power to carry out their important duties is important not only in terms of enforcing our immigration control but with regards to increasing safety at sea.
That said, part 6 and, in particular, schedule 8 introduce a raft of new powers for immigration and maritime officers. It is only right and proper that we scrutinise those powers appropriately to ensure that the proper powers are being introduced to the correct officers and that they balance appropriately with the liberties that people are entitled to. I am not convinced that these provisions in their current form meet that aim and balance the equipping of immigration officers with the power that they need with ensuring that they treat international citizens with the respect that they deserve. Therefore, the aim of the amendments is to strike that balance between protecting an individual’s liberty and human rights and giving Home Office officers sufficient, important powers to carry out their duties. I accept that this is a difficult balance for the Home Office to strike.
We should be concerned about the regular use of the word “elsewhere” throughout this section of the Bill and what that implies. This in particular relates to the searches that will be conducted into the personal lives of individuals. In earlier sittings of the Committee, we have spoken about the dangers of speculative searches and the Home Office’s poor track record on completing them. I will not repeat the arguments already made but I will stress that these searches could have a significant and deteriorating impact on community relations and social cohesion.
Amendments 239, 240 and 241 make the point that, regardless of what happens with the Bill and the form it ends up taking, regardless of what law is finally passed, we all need to be sure that we have fully trained, capable and appropriate individuals carrying out the checks and enforcement that the law will demand. They will have powers of arrest without warrant, search, arrest and seizure. The Bill proposes that persons wholly unspecified may be able to carry out all these powers without limitation, under supervision of an immigration officer. Any powers under these provisions should be exercised by immigration officers alone. The amendments will ensure that the Home Office has the appropriate immigration officers carrying out the proper checks. The power and functions relating to this section of the Bill are wide and varied, including arresting without warrant, seizing property and conducting searches. The implications for the individuals concerned are so severe that these functions must be exercised by fully trained immigration officers. There is no excuse for them not to be.
The responsibilities of immigration officers who are operating at sea are arguably more demanding than those who are operating on land. Not only do they have to be qualified in immigration law, but they have to be experienced at dealing with ships at sea. This is an extremely important point. Safety concerns are at stake and I again make the point that we cannot make a half-hearted attempt on who we delegate these powers to. Schedule 8 may not have been one of the most widely discussed provisions in the Bill, but that should not distract our attention from it. Events over the summer have highlighted the danger that exists in trying to gain asylum through a vessel of some sort. Schedule 8 grants officers the
“Power to stop, board, divert and detain”
ships for immigration offences. Safety concerns arise in that regard and therefore careful consideration should be given to the schedule and the amendments that have subsequently been proposed.
The Minister for Immigration (James Brokenshire)
I hope that, with our clarifications and assurances, hon. Members will realise our purpose and intentions. We are taking the power because of a gap in the law. Until now, there has been a small number of relatively isolated incidents involving suspected facilitation in UK territorial waters. However, those incidents illustrate a gap in the legislation. Border Force officers currently have no powers to act unless the vessel is also of customs interest. In those circumstances, they have to pass the information to immigration officers on land and monitor the vessel’s movements while it remains at sea.
We judge that that gap in the law needs to be addressed to reflect the difference between powers that could be exercised for customs purposes and powers that could be exercised for immigration purposes. It is an issue if the powers cannot be exercised in the context of a vessel that is considered to be smuggling people rather than contraband, given the risk that organised crime groups, as we are seeing elsewhere, may over time seek to smuggle in a different way. The purpose of the schedule is to be prepared and to have the right legislative framework in place to be able to respond to any such risk in UK territorial waters.
Amendments 230 to 235 seek
“To limit the maritime search powers under the Bill to the ship, the port and as conveniently as possible thereafter”.
The amendments raise concerns, as the hon. and learned Gentleman, the shadow Minister, and the hon. Member for Paisley and Renfrewshire North have highlighted, about whether the powers could be exercised anywhere on land. For ease, I will simply refer to the part of the schedule that deals with England and Wales, but I assure hon. Members that the same provisions equally apply, in certain other aspects of the schedule, in respect of waters adjacent to the coasts of Scotland and Northern Ireland.
The power to search in paragraph 3 of new schedule 4A only applies to a search of the ship, anyone on the ship and anything on the ship, as the hon. and learned Gentleman highlighted. The Bill does not limit where the power may be exercised in order to ensure that there are no gaps in the power. He was rightly probing and testing as to the intent of the term “elsewhere”. In part, it ensures that there is provision to arrest a person should they jump overboard to evade enforcement officers. Given the nature of the powers that we are seeking to provide, that could be entirely possible, whether they jump into the water or, if the vessel is in more inland waters, on to land. We need to be able to ensure that the provisions are operable in those circumstances. That will not be possible if the provision is limited to a ship or a port. I reassure the Committee that the test in paragraph 3(1) of new schedule 4A to the Immigration Act 1971 connects the exercise of the powers with suspicion regarding the ship. I hope that that connection may be helpful in giving an understanding of what we are trying to get at here.
Keir Starmer
This is in the nature of a probing intervention to ensure that I understand the Minister. The search is constrained by new paragraph 3(2) and I understand the reasoning, but there is no power of arrest in the paragraph; there is only a power of search. So sub-paragraph (8) would not help in the circumstance where someone jumps overboard and needs to be arrested. If someone jumped overboard, they could only be searched. I am probing because I do not quite understand the logic, but it may be that I am not quick enough.
James Brokenshire
That is connected to sub-paragraph (3), which states:
“The relevant officer may require the master of the ship, or any member of its crew, to take such action as is necessary for the purposes of sub-paragraph (2)(c).”
Obviously, the officer would require the ship to be taken to a port. That is connected to the ability to search, as the hon. and learned Gentleman has highlighted. There may be circumstances, for example, in which someone jumps off a ship and is rescued by officers where a search may be appropriate under the exercise of that power. We are trying to cover such circumstances. I recognise that he is fairly seeking to probe on that, and I hope my answer is helpful.
Amendments 239 to 244 would ensure that only the officers specified in the Bill can use the powers, and would remove the protection of officers from personal, criminal and civil liability. I will address those two points separately. The provision permitting powers to be exercised by accompanying officers reflects existing powers under other legislation—most notably, the powers recently considered by the House in the Modern Slavery Act 2015. The extension of powers to assistants also exists in general for those working alongside customs officers under section 8 of the Customs and Excise Management Act 1979.
In my opening comments I sought to explain the arrangement that Border Force officers have responsibility for revenue protection, as well as for the border, and they utilise those powers when they are on board cutters. We have therefore sought to ensure that there is no mismatch between customs powers and immigration powers. Other examples in the maritime context include paragraph 5 of schedule 3 to the Criminal Justice (International Co-operation) Act 1990, concerning powers to combat drug smuggling.
The reason why such powers may be given to assistants is not to permit untrained individuals to exercise those powers, but to ensure effective joint working with partner agencies that have at least a basic level of law enforcement training. The measure permits officers from partner organisations who may be working alongside enforcement officers, such as fisheries inspection officers, to assist immigration officers. It is important to emphasise the requirement that such persons must still be supervised.
On the protection of officers against civil and criminal liability, the measure extends only to personal liability; it does not prevent a claim for which an employer may be vicariously liable. When a court considers that officers have acted in good faith and that there were reasonable grounds for their actions, we think it is right from a public policy perspective that they are not held personally liable for carrying out their duties and acting in good faith. There are many other examples of where law enforcement officers are given equivalent protection. I understand that the principle has long been part of English law—prior to this sitting, the Solicitor General and I were discussing that it can be traced back to section 6 of the Constables Protection Act 1750, which I am assured remains in force today. Members may not have anticipated that they would be referring back to certain legislation in Committee, but the Solicitor General has come across the 1750 Act, which I underline.
With those reassurances, I hope that the hon. and learned Member for Holborn and St Pancras will recognise that the measure is not an extension of the law but builds on existing legislative practices and principles. I therefore ask him to reflect on what he fairly said are probing amendments to gain a better sense of our intent and the purpose and nature of schedule 8. I hope that he is minded to withdraw his amendment.
Keir Starmer
I am grateful to the Minister for those assurances. I wonder aloud how long that immunity provision, however long-standing it is, can survive. The idea that people are immune from criminal law in that way is hard to reconcile with later legislation, but that is a much bigger argument than the one we are having now. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments made: 109, in schedule 8, page 114, line 17, leave out “detain” and insert “retain”.
This amendment and amendments 110 and 112 are minor drafting changes for consistency with language used elsewhere in the Schedule and have no substantive effect.
Amendment 110, in schedule 8, page 118, line 40, leave out “detain” and insert “retain”.
See the explanatory statement for amendment 109.
Amendment 111, in schedule 8, page 122, line 6, leave out “(in England and Wales or elsewhere)” and insert “in the United Kingdom”.
This amendment is a minor drafting change for consistency with the language used in the equivalent provisions for England, Wales and Scotland.
Amendment 112, in schedule 8, page 123, line 17, leave out “detain” and insert “retain”.—(James Brokenshire.)
See the explanatory statement for amendment 109.
Schedule 8, as amended, agreed to.
Clause 37 ordered to stand part of the Bill.
Clause 38
English language requirements for public sector workers
Question proposed, That the clause stand part of the Bill.
The Solicitor General
Clauses 38 to 45 deal with the question of English language requirements for public sector workers.
I will deal with the subsections of clause 38 in turn. Subsection (1) sets out the requirement for public authorities to ensure that each of their workers in customer-facing roles speak fluent English. I know you will have an interest in this, Mr Owen: clause 43 provides specifically that where there are statutory duties in Wales, the requirement includes fluency in English and in the language of heaven. All members of the public who access public services need to be able to understand the information provided and be confident that their needs are thoroughly understood. Ensuring that that is the case will not only create better and more efficient services for taxpayers but will contribute to meeting our manifesto commitments to promote British values, in a positive and appropriate way.
Subsection (2) will require all public authorities to have regard to a code of practice when deciding how to comply with the duty set out in subsection (1). Of course, public authorities will have an opportunity to help shape that code of practice by responding to the open consultation that has been live since 13 October and will run until early December. Copies of the consultation documents have been placed in the Library of the House.
Subsections (3) and (4) will require each public authority to operate a complaints procedure. Citizens must, of course, be able to report their experience of a customer-facing worker not speaking fluent English. Public bodies must consider and respond to those complaints.
Subsections (5), (6) and (7) explain that a worker in the scope of the duty will be someone working under a contract of employment or of apprenticeship with a public authority, as a contractor to do work personally for a public authority, as an agency worker or as a police officer, civil servant or member of the armed forces. Speaking with members of the public must be a “regular and intrinsic part” of their role.
Keir Starmer
There is some concern that such a clause could operate in a discriminatory manner, with complaints and assumptions being made about what is fluent English and who is able to speak fluent English. Will the Solicitor General give an assurance that effective measures will be put in the code or elsewhere to ensure that any potential discriminatory effects and consequences are mitigated or eliminated?
The Solicitor General
I can give the hon. and learned Gentleman several assurances. First, in assessing the potential discriminatory impact of the clause, the consultation process is an important part of allowing Government to understand precisely what the pressures might be. I also assure him that the standards of fluency will be assessed by the employer. The draft code of practice already contains welcome indicative standards for what various qualifications mean in terms of English fluency. Therefore, within the interview and selection process, there will be systems in place that can be deployed to deflect some of the more specious complaints that might be made. There will be an objective standard rather than a somewhat fluid situation, which I am sure he agrees would be wholly unsatisfactory.
I was going to deal with the basic definition of fluency that will underpin the code of practice. Subsection (8) explains that for the purposes of the Bill,
“a person speaks fluent English if the person has a command of spoken English which is sufficient to enable the effective performance of the person’s role.”
Therefore, it follows that employers will have to satisfy themselves of that criterion among the others that they might deploy in seeking persons to fill vacancies for customer-facing jobs. Subsection (9) clarifies that the requirement to speak fluent English applies to existing workers and new members of staff. Finally, subsection (10) provides that the clause does not apply to those who work for public authorities where work is carried out mainly or wholly outside the United Kingdom.
The code of practice will be an important part of fulfilling our commitment, and it will assist public authorities to comply with every aspect of the new duty. I commend the clause to the Committee.
Anne McLaughlin (Glasgow North East) (SNP)
Part 7 of the Bill, which comprises clauses 38 to 45, is completely unnecessary and unworkable. It will have negative consequences, whether intended or not; I have some difficulty coming to a conclusion on that one. Perhaps when the Minister speaks later, it will be easier for me to do so. It goes against the wider measures advocated by the Government in the Bill. I will argue those points in turn, but I hope that the Committee will allow common sense to prevail and scrap this part of the Bill.
It is clear that the clauses are unnecessary from the overwhelming lack of evidence from the Government or anyone else that legislation is required. Page 25 of the explanatory notes state that clause 38 is being introduced in order
“to improve the quality of service provided by public authorities, such as the NHS and the police”.
The question is surely why those professionals have not demanded such legislation themselves. I note the submission from the British Medical Association stating that doctors must already pass the international English language testing system to a level set by the General Medical Council or provide evidence to the equivalent. If the Committee does not agree to scrap part 7 of the Bill, will the Minister provide assurances that it will not result in duplication?
The fact is that part 7 in its entirety is merely a duplication of what any employer asks of an applicant: do they have the skills for the role? I challenge any Member here to tell me whether they know of any firefighters turning up to save our lives who have to bring an interpreter with them, or whether any of them have visited a GP and had to explain their symptoms in mime because the GP does not speak English. It simply does not happen. Many of my constituents have terrible problems with the Department for Work and Pensions. I was of the view that that was due in the main to unfair policies, but I had not considered that it is perhaps because the Government employ people who do not speak the language of this country. I have never heard of that, and have never experienced it.
That point is made eloquently by the Royal College of Nursing, which argues against duplicating and undermining the standards being developed by the Nursing and Midwifery Council. That is what it is: an undermining of professional bodies. The fact remains that it is professionals, not Ministers, who have a sophisticated understanding of the level of English required for professional roles. The RCN states:
“We question whether it would be appropriate for ministers to set out standards rather than professional regulators, such as the NMC, as is currently the case.”
Far be it from me to argue for lighter-touch regulation to a Tory Government, but the professionals themselves are safeguarding public services, so it is difficult to envisage a Minister, of whatever party, devising a more sophisticated practice-led assessment of language skills than the professional bodies representing the public sector. The Government are fond of saying that they are fixing the roof while the sun is shining, but here they are putting a leaky tin roof in place of one that functions. Like much of the Bill, regardless of our respective opinions on the rights and wrongs, these provisions simply do not make sense.
The Chair
Order. May I say to Members on the Back Benches that the microphones are very sensitive and are picking up every conversation? I wish to hear only one voice: that of the person speaking.
Anne McLaughlin
Thank you, Mr Owen. Discrimination has increased following the trial of the right-to-rent provisions, which has led to people being judged not to look or sound British and to their having increased difficulty finding accommodation. The exact same prejudice will now face those working in the public sector, with people who sound as if they are not from Britain at risk of spurious complaints and victimisation.
Our public sector workers are doing increasingly difficult work, thanks to the Government’s cuts agenda. They are often working with fewer resources and taking on more responsibilities. It does not take a genius to see that this will be stressful for the worker and for those using the service, nor does it take a particularly high IQ to imagine that a disgruntled and stressed-out member of the public may take out their frustration with their situation on a member of staff. If that person is obviously an immigrant, there is a risk that complaints will be brought against them on the grounds of language ability—a complaint that would then have to be investigated. All that does is waste time and money, and increase the stress levels of everyone involved.
I have seen it myself. I have been in a GP surgery where I heard people muttering about the African receptionist—“Could they not get somebody who can speak English?”—when she was speaking perfectly good English, since it was her first language, as it is for many people coming to this country. All that was different about her was the colour of her skin and her accent. Now those racist mutterings can be turned into formal complaints—[Interruption.] Yes, they can. The Government are legitimising that racism instead of tackling it head on. If I am wrong about the intentions, will the Minister tell us if and how he will assess the implementation of this part of the Bill? If he does not intend this part of the Bill to have such consequences, and if he does in fact care but does not believe that my fears are founded, will he at least consider the possibility that I might be right, assess this at a later stage and be willing to review it if necessary?
Part 7 makes it much more difficult for genuine migrants to integrate. It places a ludicrous burden on public agencies at a time when the Government are asking them to tighten their belts. It punishes those who have come here legally and are trying to get on and contribute to this society. Part 7 legitimises the rantings of racists, who will say, “Well, there is obviously a problem or the Government wouldn’t have to have a law to stop it.” In fact, it goes against much of what people believe the Tory party stands for—not me, incidentally, but some people. Part 7 certainly goes against the principles of the Scottish National party, and I urge all Members to reject clauses 38 to 45.
The Solicitor General
I would like to say that this debate has created more light than heat, but I am afraid that I cannot do so. With the greatest of respect to the hon. Lady, people such as the receptionist she mentioned will be protected by these provisions, safe in the knowledge that they have fulfilled the criteria set out in the code of practice. They have nothing to fear from people who, through racism or prejudice, may wish to make specious claims. I wholly reject her prospectus.
Anne McLaughlin
If the Minister is saying that that receptionist will be protected against spurious complaints, does he mean that nobody is allowed to make a spurious complaint? If so, will it be decided that a complaint is spurious before the receptionist is informed? The stress levels suffered by someone who has had an unlawful complaint made against them are just as bad as they would be if the complaint were founded.
The Solicitor General
I am sorry, but the hon. Lady acknowledged that several parts of the public sector have basic proficiency requirements in place. I am afraid that all of us in a public sector role, including everyone in this building and elsewhere, will be the subject of complaints from time to time. Some of those complaints might be wholly justified; others will not be justified. I do not accept for one minute that these provisions will increase the culture of fear that she has colourfully, but wholly erroneously, painted. She is right to say that some parts of the public sector have minimum standards of English for their staff. The provision underpins and widens that duty so that the rest of the public sector is brought into line with those who are leading the way and being proactive.
Anne McLaughlin
I thank the Minister for giving way—I appreciate it. Which parts of the public sector employ people who do not speak English in a public-facing role? I have listed all the possibilities, but I have never experienced it, and I have seen no evidence that anyone here has experienced it.
The Solicitor General
I am grateful to the hon. Lady for sharing her anecdotal experiences, but the Home Office has done pre-consultation modelling, based on the proportion of over-16s in employment in the public administration, education and healthcare sectors according to 2011 census data—those are important, objective, statutory data obtained from the British population. According to that modelling, about 3.6 million employees are within the scope of the proposed duty and about 1.5 million employees in Great Britain, excluding Northern Ireland, are subject to English language standards, so an extra 2.1 million employees will be newly affected by the duty. We anticipate that between a low of 8,500 workers and a high of 25,000 workers may not have the required standards of English fluency. There is objective evidence upon which we can base this policy.
The policy is not designed suddenly to change the game or somehow create a wholly new structure that will alter the balance and change societal attitudes towards people who have a heavy accent. I include myself in that—I know the hon. Lady is as proud of her accent as I am proud of mine. We are seeking to standardise and enhance the position of people who have come to this country to work and who might have a different ethnicity or background. They will be employed under the same objective criteria that will be applied to everybody else in the public sector.
The Solicitor General
I will give way in a moment, but first I want to read a highlighted extract from the draft code of practice consultation relating to complaints. I hope that it will help the hon. Lady. Paragraph 4.5 says:
“Public authorities are not obliged by this Code of Practice to respond to complaints that are vexatious, oppressive, threatening or abusive. These should be given their usual dictionary meaning and could be defined as those complaints that are without foundation and/or which are intended to result in harsh or wrongful treatment of the person referred to in the complaint. In these types of circumstances a complaint should not be allowed to continue.”
I commend that paragraph to the House.
Keir Starmer
In so far as the measures extend the existing duties on public authorities to consider the requirement in the first place, they do not go much further than the existing position, but I think that the hon. Lady is pointing at the complaints procedure, which the Minister just touched on. Will he assure the Committee that the only complaints that the provision is intended to open up are complaints against the public authority for failing to carry out its duties, and not complaints made about an individual? That would give a considerable degree of assurance that there is no intention for the measures to allow anyone to say, “I am complaining about X,” when what they are really complaining about is public authority Y, which has not done its job properly. There is a big difference in terms of how the complaints procedure would then be used.
The Solicitor General
I can confirm that paragraph 4.1 of the draft code says:
“This section of the Code is about the procedure a public authority should take should there be a complaint regarding a breach of the fluency duty.”
That means a complaint against the public authority for having breached that duty. There are no sanctions in part 7 that could be applied directly to staff. As I said, it is a duty for the public authority.
Keir Starmer
This is an important point. Can the Minister write to us on that specific issue? It also arises from clause 41(2)(c), according to my reading; I think that he would provide assurance if he wrote to the Committee—to me and other hon. Members—to say that that is the intention of the complaints procedure. One can see the scope otherwise for concern about complaints.
The Solicitor General
I understand entirely, and I am happy to do so. I assure the hon. and learned Gentleman and any Committee members concerned about consequences for staff that dismissal would be a matter extremely far down the line in these procedures. We are talking about improving systems. That does not entail an ad hominem attack on individuals; it is about the public authority and any perceived failure on its part.
Keir Starmer
I am grateful for the assurance about frivolous and other vexatious complaints. I know from having 9,000 staff of my own that what causes great anxiety is the fact that a complaint has been made to the individual, even if some weeks or months down the line it might be ruled out. If a number of complaints are made about a particular member of staff, that will increase anxiety hugely. The greater the clarity that the Minister can give here, the better. For a member of staff, simply knowing that a complaint might be knocked out in three months does not affect the anxiety that they feel when doing in their job.
The Solicitor General
I take point made by the hon. and learned Gentleman, and that made by the hon. Member for Glasgow North East. I will write to the Committee, as I have indicated.
On the question of bureaucracy, the measures take a minimalist approach. The code of practice will guide public authorities to align their actions regarding the new duty with existing practice. We expect a minimal expansion to existing procedures to suffice. Our open consultation will allow any concerns about bureaucracy to be raised and taken into account.
Anne McLaughlin
Does that mean that the British Medical Association, for instance, will be allowed to make its own assessment?
The Solicitor General
The hon. Lady has mentioned a body that operates its own minimum standards. I envisage that where organisations are already doing that work, it will be a fairly easy task for them to satisfy a code of practice, but again, I would be interested to hear what they have to say as part of the consultation. I am sure that the intention is for dovetailing in any expansion of the duty, so that we standardise it across the whole public sector, thanking those particular outliers for being proactive in the area.
Keir Starmer
Again, this is by way of seeking assurance. This discussion is in the context of an Immigration Bill, but the measures will cover all individuals. Can the Minister give an assurance that careful consideration will be given to how the measures apply to individuals with any kind of learning or speech difficulty, regardless of background, ethnicity and so on? There is the potential for impact on people who fall into those categories. I know that that is not the intention, but we would gratefully receive a high level of assurance.
The Solicitor General
I am happy to give that. From my own understanding and experience of such issues, I am extremely keen to ensure that people who are fluent but who might, due to disability, express themselves slightly differently, are not discriminated against in any way.
On the question of setting a single standard, again, to enlarge the point that I was making, because the public sector has such a broad range of customer-facing roles, whether they be heart surgeons or parking enforcement officers, different particular standards will be appropriate. Therefore, the code will guide public authorities to set a standard that is proportionate to the nature of the spoken interaction that is an integral part of each role. To reinforce the point that I just made to the hon. and learned Gentleman about discrimination, public authorities, like all employers, are prohibited from discriminating against members of staff and job applicants by the terms of the Equality Act 2010, under which disability is a protected characteristic. Of course that will be relevant to individuals with a speech impediment.
Anne McLaughlin
I appreciate the Minister letting me butt in so often. He has said that there is a public duty under equalities legislation not to discriminate against a potential employee, but discrimination happens and we know that it happens. It is far harder for someone to find a job if they are black; basically, it is much more difficult. The Committee has heard most of my fears, but my fear on this is that is that, just as landlords feel that they will discriminate whether they really want to or not, these measures will make employers more fearful of employing somebody who might get complaints against them because of language—not because they cannot speak the language fluently, but because they sound and look different. It will make it even harder for people to find employment. All the equalities legislation in the world is only useful if people know how to use it and have the resources to use it.
The Solicitor General
I hear the hon. Lady, but I must remind her that we are talking about public authorities, which have had to, quite rightly, adapt their practices to take into account legislation such as the Equality Act 2010, which consolidated and enhanced a number of other statutes passed over a generation or more, which in turn dealt with racism, disability discrimination and so on. They were Acts of Parliament passed by all parties in this House. I would be as distressed as she if a public authority misused in any way what I would submit are the benign duties in the clause to reverse the progress that we have made. It is not about whether somebody looks or sounds different; it is about basic standards of proficiency and fluency that will improve public services.
Keir Starmer
I apologise for adding to the shopping list of assurances, but it is done, I hope, in the right spirit and with concern that is shared across the House. This problem might have been addressed, but there must be some public authorities that use sign language for some of those deemed to be customers or service users. Those fluent in sign language may not in fact be able to speak fluent English. Perhaps there is an obvious answer to this—if there is, I apologise—but the words “speaks fluent English” in clause 38(8) cause me some concern. There may be an easy reassurance. If there is, I will be assured.
The Solicitor General
I am grateful to the hon. and learned Gentleman for raising an issue in which I take a personal interest—the use of British sign language and other means for deaf people to participate in all aspects of our mainstream life. To parenthesise for a moment, I am sure that he would be interested in the work that I am doing to explore why deaf people cannot serve on juries, for example. It seems to me wholly ridiculous, but that is the position at the moment. Perhaps we can talk about that offline.
A British sign language interpreter is of course arguably a reasonable adjustment that is provided under an employer’s duty towards staff with a disability under the Equality Act 2010. That would be part and parcel of a person’s work; so to use it as a basis for suggesting lack of fluency would be wholly wrong and self-defeating. It is important to remember that people with disabilities, with reasonable adjustments, increasingly form part of the mainstream workforce. The provision is not designed to cut across that.
I think we all benefit from the fact that people with different ethnic origins work in our public services. Whatever they sound like and wherever they are from we welcome them all; but it is important—and they would agree—that we make sure there is a basic standard, to ensure that all sections of society have the fullest confidence in our public services. The measure goes a long way to protect our public servants.
Paul Blomfield (Sheffield Central) (Lab)
I concur with the point that the Solicitor General makes, but I did not necessarily recognise the figures he gave earlier as a description of the problem. They were census data, which did not necessarily relate to the issue. However, let us assume that there is a problem. Is the Minister not concerned that what he wants to do will be undermined by the cuts of the order of 30% in the adult skills budget since 2010, which have had a direct impact on the courses in English for speakers of other languages that give people precisely the skills he is looking for? In the spirit of his proposals will he make representations to his colleagues in the Department for Business, Innovation and Skills to increase that budget?
The Solicitor General
At this stage what I will say is that those points need to be fed into the consultation, so that in the code of practice we get objective standards for fluency absolutely right. I note from the code of practice that there is a helpful table in the draft suggesting the stages of proficiency that can be equated with various qualifications, such as GCSEs, GCE A-levels or NQFs.
The hon. Gentleman makes an interesting point, which I would argue needs further discussion. I hope that if, when the code of practice is finalised, the issue he raises is causing problems, that will be reflected in a system that, while still objective, will include an understanding that fluency can sometimes be measured in a non-academic way, which would therefore need to be built into any assessment such as a written test or other proficiency test conducted by the employer or prospective employer when interviewing candidates for a job. That could be an objective standard.
Anne McLaughlin
Is not that the same as allowing the employers to follow their current recruitment processes and make the judgment themselves? If things are going to be that vague, why do not we just continue to allow employers to make the assessment themselves?
The Solicitor General
What we are doing is making sure that the practice spreads. Indeed, some employers do it already; but we think that the duty would spread it throughout the public service. The hon. Lady may well be right; normal assessment processes may be perfectly sufficient. Examples might be a spoken interview or the choice to require an applicant to answer a detailed interview question in English or Welsh, or to possess a relevant qualification, or pass a specifically tailored competency test. It is not a matter of heavy prescription.
The Opposition cannot have it both ways. On one level, they are telling us that they are concerned that the proposals will be too bureaucratic, and on another, when I suggest that this is in fact, more flexible, they ask what the point is. There is a point: it is all about spreading best practice through all levels of public service.
The Solicitor General
The clause sets out which public authorities must ensure that each of their workers in customer-facing roles speak fluent English or, in Wales, fluent English or Welsh. Hon. Members will understand that it is important to define the scope of the duty as broadly as possible so that we make sure that all members of the public receive advice, help and support in fluent English or Welsh, regardless of the nature of the public service.
Subsection (1) defines public authorities as any organisation that carries out functions of a public nature. Subsection (2) clarifies that that does not include other bodies that carry out functions on behalf of a public authority. For example, it excludes a private company that appears to the customer to be part of the local council’s services even though the service is actually provided by an independent organisation through a contract with the local authority. Subsections (3) and (4) clarify that this duty will apply in Scotland only if a public authority exercises functions which relate to a reserved matter.
Subsection (5) limits the scope of the bodies included in this duty very slightly to exclude the security services, the Secret Intelligence Service and the Government Communications Headquarters. Subsection (6) provides that a relevant Minister may add, modify or remove the name of a body in relation to this list. The term “a relevant Minister” is defined in clause 44 to include either the Secretary of State or the Chancellor of the Duchy of Lancaster. The regulation-making power to amend the list of public authorities must be done in accordance with the provisions that relate to regulations in clause 53.
That brings me to Government amendments 37 to 39. These technical amendments ensure that clause 53 applies to regulations made by either the Secretary of State or the Chancellor of the Duchy of Lancaster under part 7.
Question put and agreed to.
Clause 39 accordingly ordered to stand part of the Bill.
Clause 40
Power to expand meaning of person working for public authority
Question proposed, That the clause stand part of the Bill.
The Solicitor General
Clause 40 provides a power to make regulations to expand the meaning of a person in respect of whom this duty applies. Should the relevant Minister—the Minister of the Cabinet Office or the Chancellor of the Duchy of Lancaster—choose to make such regulations, the duty would apply to customer-facing staff of contractors and subcontractors delivering a public service through an arrangement with a public authority. To comply with the statutory duty in clause 38, public authorities need to have regard to the code of practice to ensure that the customer-facing staff of these organisations, as well as their own directly engaged staff, meet the language standard.
Public authorities need to make sure, first, that the standard of fluency applied is proportionate to the nature of each customer-facing role; and secondly that their complaints process allows citizens to report their experience of a customer-facing worker employed by such organisations who is not speaking fluent English. Hon. Members will be aware from our previous debate about the consultation that is now live that respondents are asked explicitly for their views on the impact of expanding the scope of the duty to the staff of private and third-sector suppliers. We will publish those views as part of the Government response to the consultation. However, any expansion of this duty to apply to the staff of private and third-sector providers of services will involve separate consultation before any regulations are made.
Question put and agreed to.
Clause 40 accordingly ordered to stand part of the Bill.
Clauses 41 and 42 ordered to stand part of the Bill.
Clause 43
Application of Part to Wales
Anne McLaughlin
I beg to move amendment 246, in clause 43, page 39, line 23, at end insert—
‘(4) This Part does not apply to Scotland.”
I have set out why I do not want this measure to be part of United Kingdom legislation, so this is really just to make the argument that if the rest of the United Kingdom does, indeed, want it—I have set out the different experiences of Members in the different countries—then it should not stand in Scotland.
The Solicitor General
I gently remind the hon. Lady that the title of clause 43 is “Application of Part to Wales”. I see the point she is making, so I do not want to make too lawyerly a point, but the provision relates to Wales rather than Scotland.
The purpose of the hon. Lady’s amendment is to exclude Scotland from the whole of part 7. Subsections (3) and (4) of clause 39—the governing clause of this part of the Bill—provide that the requirement for customer-facing public sector workers to speak fluent English applies in Scotland only to the extent that a public authority exercises functions related to a reserved matter.
Hon. Members may not be aware of a letter sent on 3 November from the Cabinet Secretary for Social Justice, Communities and Pensioners’ Rights in the Scottish Government, Mr Alex Neil, to my right hon. Friend the Minister for the Cabinet Office and Paymaster General. In that letter, Mr Neil acknowledges that this part of the Bill will only apply to reserved matters, and we agree that any further extension into devolved matters would require a legislative consent motion.
I am grateful to Mr Neil and his team for the work that has been done with members of the British Government and the discussions with Scottish Government officials that have resulted in this proposal. I am also grateful to him for instructing his officials to ensure that the Cabinet Office received every support in understanding the landscape of the reserve public sector in Scotland. Such lines of contact have been established, and indeed the consultation continues. For all those reasons, I very much hope that the hon. Member for Glasgow North East will withdraw the amendment.
Anne McLaughlin
On a point of clarification, Mr Owen. Being a new MP and a new member of the Committee, I am a bit confused by the gentle reminder that the Minister gave me. Amendment 246 says:
“This Part does not apply to Scotland.”
I am not entirely sure what the Minister was referring to when he mentioned Wales—I am just looking for a bit of guidance on that. Do we have different pieces of paper?
The Chair
I will try to help the hon. Lady. The title of clause 43 is:
“Application of Part to Wales”.
It is not possible to amend the title of a clause; I think the Minister was explaining that. Does the hon. Lady wish to withdraw the amendment?
The Solicitor General
As alluded to in the previous debate, clause 43 sets out how part 7 will apply to public authorities exercising functions of a public nature in Wales. I am grateful to the Clerk to the Committee for confirming my understanding that the clause title is not an amendable part of the Bill but an indicative description of the clause.
James Brokenshire
The clause inserts a new section in the Immigration Act 2014 to provide a power to impose a charge on employers sponsoring non-European economic area skilled migrants. In addition, it contains provision for regulations to be made regarding the charge. The immigration skills charge will help to address current and projected skills needs in the UK economy and contribute to reducing net migration. The intention behind the charge is to encourage employers to think differently about their recruitment so that, where possible, they recruit and train up resident workers.
Paul Blomfield
I do not disagree with the principle, which is right, but I wish to explore some of the detail.
I represent the University of Sheffield, which is involved in apprenticeship training. As I understand the proposals, the money raised from the charge will go to the Consolidated Fund to assist in addressing the skills gap in the UK. The university’s Advanced Manufacturing Research Centre, which has been held up as a model by the Government, is involved in higher apprenticeship training, much of which is undertaken by academics who are recruited through the tier 2 route. It appears nonsensical to make a levy on the University of Sheffield and other universities and educational institutions for recruiting tier 2 workers who are actively involved in filling the skills gap. What does the Minister think about that issue?
Similarly, we have received representations from the British Medical Association and the Royal College of Nursing about the position in the health service where, because of skills shortages, the Government and the NHS are actively recruiting from abroad. Given the financial pressures on the NHS, does it make sense to levy a skills charge on it? Perhaps that is not the Government’s intent and I have misunderstood the provisions of the Bill, in which case I will be grateful if the Minister can clarify the position on both those points.
James Brokenshire
Perhaps I should underline that employers over time should reduce their demand for migrant labour. We recognise that many employers invest in training, but throughout the economy investment in training has been declining over 20 years and use of tier 2 visas is up by 30% if we compare 2010 with 2014. We want to encourage employers to invest in upskilling our resident work force and reduce reliance on migrant labour. The immigration skills charge will fund training of the resident work force, including apprenticeships.
The hon. Gentleman’s argument is whether in principle there should be some exemptions. That is a question that we have asked the Migration Advisory Committee, which has been asked to advise on the charge’s impact on different employers. The Government will consider the MAC’s advice in due course; we expect to receive its full advice next month. The MAC will make recommendations, including on the scope and level of the charge. We are setting out the principle. We have asked the MAC to consider some of these details, and we will reflect on its recommendations and implementation.
Question put and agreed to.
Clause 46 accordingly ordered to stand part of the Bill.
Clause 47
Power to make passport fees regulations
Question proposed, That the clause stand part of the Bill.
James Brokenshire
Clause 47 provides new powers to make regulations to charge fees in respect of passport and travel document functions. The measures in the clause focus on increasing the transparency of how passport fees are set.
Question put and agreed to.
Clause 47 accordingly ordered to stand part of the Bill.
Clauses 48 to 50 ordered to stand part of the Bill.
Schedule 9 agreed to.
New Clause 14
Private hire vehicles etc
‘(1) Schedule (Private hire vehicles etc) (private hire vehicles etc) has effect.
(2) The Secretary of State may by regulations make provision which—
(a) has a similar effect to the amendments made by Schedule (Private hire vehicles etc), and
(b) applies in relation to Scotland or Northern Ireland.
(3) Regulations under subsection (2) may—
(a) amend, repeal or revoke any enactment;
(b) confer functions on any person.
(4) Regulations under subsection (2) may not confer functions on—
(a) the Scottish Ministers,
(b) the First Minister and deputy First Minister in Northern Ireland,
(c) a Northern Ireland Minister, or
(d) a Northern Ireland department.
(5) In this section “enactment” includes—
(a) an enactment contained in subordinate legislation within the meaning of the Interpretation Act 1978;
(b) an enactment contained in, or in an instrument made under, an Act of the Scottish Parliament;
(c) an enactment contained in, or in an instrument made under, Northern Ireland legislation.”—(James Brokenshire.)
This new clause inserts a new Schedule NS1 which amends the licensing regimes for taxis and private hire vehicles in England and Wales. It also contains a regulation-making power to amend the legislation in Scotland and Northern Ireland to equivalent effect as that Schedule.
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss the following: Government new schedule 1—Private hire vehicles etc.
Government amendment 245.
James Brokenshire
We move to new clauses, having considered the main substantive provisions of the Bill. New clause 14 requires immigration checks and continuing compliance with immigration laws as part of the existing licensing regime for taxis and private hire vehicles. It does so by adapting existing provisions for private hire vehicles in London in the Private Hire Vehicles (London) Act 1998 and for taxis and private hire vehicles in the rest of England and Wales in the Local Government (Miscellaneous Provisions) Act 1976.
The new clause seeks to prevent illegal migrants and migrants whose status does not permit them to work from holding taxi and private hire driver and operator licences. It is important to note that, because the majority of drivers are self-employed, they are not subject to existing right to work checks. In our judgment, that leaves scope for the sector to be exploited by illegal workers.
Licensing authorities already conduct checks to determine whether someone is a fit and proper person to hold a driver or operator licence. However, a licensing authority has discretion as to many of the checks that it undertakes to satisfy itself that someone passes the fit and proper person test. Many licensing authorities make immigration checks, but they are advisory at present. The new clause will make immigration checks mandatory and embed immigration safeguards in the existing licensing regime.
New clause 14 gives effect to new schedule 1, which amends the Private Hire Vehicles (London) Act 1998 for private hire vehicles in London and the Local Government (Miscellaneous Provisions) Act 1976 in respect of taxis and private hire vehicles in the rest of England and Wales. The new provisions also make relevant changes so that the same measures can be implemented in London, where the taxi licensing regime is slightly different, by amending the Metropolitan Public Carriage Act 1869.
We are in the process of consulting with the Northern Ireland Executive and the Scottish Government with a view to making similar changes to the licensing legislation in Scotland and Northern Ireland in the Bill or, if that is not possible, by regulations, for which provision is made in the new clause.
I will now comment in more depth on new schedule 1, the main meat of the provisions. On the changes to the Metropolitan Public Carriage Act 1869 for London, first, the provision ensures that where someone’s immigration leave is time-limited to less than the statutory length for a driver or operator licence, the licence will be issued for a duration that does not exceed the applicant’s period of leave. If someone has so-called section 3C leave under the Immigration Act 1971, because they have, for example, made a valid application to the Home Office to extend their leave, any licence granted will be limited to a period not exceeding six months.
Secondly, if someone is disqualified from continuing to hold a driver or operator licence for immigration reasons, they must return their licence, any copy and their driver’s badge to the licensing authority. Someone who fails to return their licence within seven days without reasonable cause will be committing an offence and, on summary conviction, liable to a fine not exceeding level 3 on the standard scale and, in the case of a continuing offence, a daily fine for each day they fail to return the documents after conviction. Thirdly, the grounds for disqualification—this is for someone who already holds a licence—will include that someone has no lawful status in the UK, or has no right to undertake the work in question.
The Local Government (Miscellaneous Provisions) Act 1976 and the Private Hire Vehicles (London) Act 1998 are similarly amended for operator and driver licences. In addition, the new schedule provides that a licence must not be granted under those Acts to someone who is disqualified by their immigration status. The licensing authority must have regard to any guidance issued by the Secretary of State in making a decision about someone’s immigration status. Importantly, the new schedule also specifies that the conviction of immigration offences and the requirement to pay penalties since the licence was issued are grounds to revoke a driver or operator licence. That is our approach, which intends to catch operators who may seek to engage people who are in the country unlawfully.
Sarah Champion (Rotherham) (Lab)
I would like further clarification from the Minister; I did not want to intervene in case he was coming on to this. Will he talk us through the logistics of how the legislation will be enforced?
I welcome the recommendations. I have not gone through the details of them, but it seems that currently different local authorities have different legislation and rules, so there can be confusion about who is responsible for enforcement of the local authority recommendations when people cross the border. Will the Minister talk a little more about how the legislation will be enforced and who will be responsible? He mentioned a seven-day period and said that the local authority would then have to enforce this. How does the local authority find out about that? What will happen with on-the-ground resources to enable the local authority to act? What happens if someone is in violation—will the Home Office or the local authority be responsible for that? I ask for practical ways in which the legislation will work.
James Brokenshire
I am grateful to the hon. Lady for her probing questions about enforcement. It is worth underlining that some licensing authorities are already doing basic right to work checks. That is what we are seeking to embed within the overall licensing regime.
Sarah Champion
I would like just a little more information. At the moment, if someone fails the fit and proper person test they can appeal through a magistrates court. Is it correct that under these measures that right would go and it would become a straight immigration issue?
James Brokenshire
Let us look at the provisions. Paragraph 12 of the new schedule amends the Local Government (Miscellaneous Provisions) Act 1976 as follows:
“In section 62(1) (suspension and revocation of operators’ licences) before the “or”…insert…“…that the operator has since the grant of the licence been convicted of an immigration offence or required to pay an immigration penalty”.
The point is that that will be a matter of established fact. The terms are further defined in proposed new section 79B of the 1976 Act, which is inserted by the new schedule, and defines immigration offences and immigration penalties. The measures will be embedded within the overall framework of the licensing arrangements. If the relevant local authority were, for example, to seek to revoke or suspend a licence, a legal process would no doubt be followed. The point is that it would be made clear whether an operator had been subject to these specific measures, because of the nature of the definitions.
The fit and proper person test is built in. It takes place when someone is applying for a licence. Immigration offences are a clear factor that will have to be weighed in any determination of whether someone is a fit and proper person. If someone does not have the right to be here, the new provisions make it clear that they should not be considered a fit and proper person. That is how we are embedding the measures within the existing process. We believe their operation can be effected smoothly. We will issue guidance, as I have already indicated, to assist local authorities in the implementation of the provisions.
This is a question of raising standards, to ensure that abuse does not take place within the sector. These are positive and important new provisions, which will see immigration enforcement agencies working with local authorities—something that, as I have indicated during our discussions, I strongly support. If we can get our activities embedded well, in places where immigration enforcement officers may come across intelligence and information, we can work smartly with other agencies such as local authorities to raise standards more broadly and root out abuse and rogue operators. The measures are important and distinct, and will, we hope, not only deal with immigration offending and people who are in the country unlawfully and engaging in employment or contracts for services, but raise standards in the sector more generally.
Question put and agreed to.
New clause 14 accordingly read a Second time, and added to the Bill.
New Clause 15
Supply of information to Secretary of State
‘(1) Section 20 of the Immigration and Asylum Act 1999 (supply of information to Secretary of State) is amended in accordance with subsections (2) to (10).
(2) For the heading substitute “Power to supply information etc to Secretary of State”.
(3) In subsection (1) for paragraphs (a) to (f) substitute—
“(a) a public authority, or
(b) any specified person, for purposes specified in relation to that person.”
(4) In subsection (1A) in each of paragraphs (a) and (b) for “a person listed in subsection (1) or someone acting on his behalf” substitute “a public authority or someone acting on behalf of a public authority”.
(5) After subsection (1A) insert—
“(1B) This section does not apply to—
(a) information which is held by the Crown Prosecution Service, or
(b) a document or article which comes into the possession of, or is discovered by, the Crown Prosecution Service, or someone acting on behalf of the Crown Prosecution Service,
if section 40 of the UK Borders Act 2007 applies to the information, document or article.”
(6) After subsection (2A) insert—
“(2B) Subsection (2A)(a) does not affect any other power of the Secretary of State to retain a document or article.”
(7) In subsection (3) after paragraph (d) insert—
“(da) anything else that is done in connection with the exercise of a function under any of the Immigration Acts;”.
(8) After subsection (3) insert—
“(3A) “Public authority” means a person with functions of a public nature but does not include—
(a) Her Majesty’s Revenue and Customs,
(b) either House of Parliament or a person exercising functions in connection with proceedings in Parliament,
(c) the Scottish Parliament or a person exercising functions in connection with proceedings in the Scottish Parliament,
(d) the National Assembly for Wales or a person exercising functions in connection with proceedings in that Assembly, or
(e) the Northern Ireland Assembly or a person exercising functions in connection with proceedings in that Assembly.”
(9) Omit subsection (4).
(10) After subsection (6) insert—
“(7) Nothing in this section authorises information, a document or an article to be supplied if to do so would contravene a restriction on the disclosure of information (however imposed).”
(11) After section 20 of the Immigration and Asylum Act 1999 insert—
“20A Duty to supply nationality documents to Secretary of State
(1) This section applies to a nationality document which the Secretary of State has reasonable grounds for believing is lawfully in the possession of a person listed in Schedule A1.
(2) The Secretary of State may direct the person to supply the document to the Secretary of State if the Secretary of State suspects that—
(a) a person to whom the document relates may be liable to removal from the United Kingdom in accordance with a provision of the Immigration Acts, and
(b) the document may facilitate the removal.
(3) A person to whom a direction is given must, as soon as is practicable, supply the document to the Secretary of State.
(4) If the document was originally created in hard copy form and the person possesses the original document, it must be supplied to the Secretary of State unless it is required by the person for the performance of any of the person’s functions.
(5) If the original document is required by the person for the performance of any of the person’s functions—
(a) the person must, as soon as is practicable, supply a copy of the document to the Secretary of State, and
(b) if subsequently the person no longer requires the original document, the person must supply it to the Secretary of State as soon as is practicable after it is no longer required.
(6) Subsection (5)(b) does not apply if the Secretary of State notifies the person that the original document is no longer required.
(7) If subsection (5) applies the person may make a copy of the original document before supplying it to the Secretary of State.
(8) The Secretary of State may retain a nationality document supplied under this section while the Secretary of State suspects that—
(a) a person to whom the document relates may be liable to removal from the United Kingdom in accordance with a provision of the Immigration Acts, and
(b) retention of the document may facilitate the removal.
(9) Subsection (8) does not affect any other power of the Secretary of State to retain a document.
(10) The Secretary of State may dispose of a nationality document supplied under this section in such manner as the Secretary of State thinks appropriate.
(11) Nothing in this section authorises or requires a document to be supplied if to do so would contravene a restriction on the disclosure of information (however imposed).
(12) The Secretary of State may by regulations amend Schedule A1 so as to add, modify or remove a reference to a person or description of person.
(13) Regulations under subsection (12) may not amend Schedule A1 so as to apply this section to—
(a) either House of Parliament or a person exercising functions in connection with proceedings in Parliament,
(b) the Scottish Parliament or a person exercising functions in connection with proceedings in the Scottish Parliament,
(c) the National Assembly for Wales or a person exercising functions in connection with proceedings in that Assembly, or
(d) the Northern Ireland Assembly or a person exercising functions in connection with proceedings in that Assembly.
(14) In this section “nationality document” means a document which might—
(a) establish a person’s identity, nationality or citizenship, or
(b) indicate the place from which a person has travelled to the United Kingdom or to which a person is proposing to go.”
(12) In section 166 of the Immigration and Asylum Act 1999 (regulations and orders)—
(a) after subsection (5) insert—
“(5A) No regulations under section 20A(12) which amend Schedule A1 so as to—
(a) add a reference to a person or description of person, or
(b) modify a reference to a person or description of person otherwise than in consequence of a change of name or transfer of functions,
are to be made unless a draft of the regulations has been laid before Parliament and approved by a resolution of each House.”, and
(b) in subsection (6), before the “or” at the end of paragraph (a) insert—
“(ab) under section 20A(12) and which falls within subsection (5A),”.’
(13) Before Schedule 1 to the Immigration and Asylum Act 1999 insert the Schedule A1 set out in Schedule (Duty to supply nationality documents to Secretary of State: persons to whom duty applies).”—(The Solicitor General.)
This amendment expands the information gateway in section 20 of the Immigration and Asylum Act 1999 for the voluntary supply of information to the Secretary of State for immigration purposes. It also places a duty on authorities listed in new Schedule A1 to that Act (see NS2) to supply nationality documents to the Secretary of State where directed to do so.
Brought up, and read the First time.
The Solicitor General
I beg to move, That the clause be read a Second time.
The Chair
With this it will be convenient to discuss Government new schedule 2—Duty to supply nationality documents to Secretary of State: persons to whom duty applies.
The Solicitor General
The new clause expands the existing information gateway in section 20 of the Immigration and Asylum Act 1999 for the voluntary supply of information to the Secretary of State for immigration purposes. It also places a duty on the authorities listed in new schedule 2 to supply nationality documents to the Secretary of State where directed to do so.
At the moment, in addition to common-law data-sharing powers, section 20 of the 1999 Act allows for information and articles from specified public authorities, such as the police and the National Crime Agency, to be supplied to the Secretary of State for immigration purposes. We would like to ensure that other public authorities that may find themselves in possession of information or documents that may be used for immigration purposes have clear statutory authority to pass those to the Home Office. The new clause will ensure that any public authority, other than those expressly excluded, may provide information and documents to the Secretary of State for immigration purposes, should it wish to do so.
We also want the Secretary of State to be able to require the provision of nationality documents that are lawfully in the possession of specified public authorities. That power would be exercisable where the Secretary of State suspects that a person to whom the document relates may be liable to removal from the United Kingdom in accordance with a provision of the Immigration Acts and that the document may facilitate the removal.
I want to make it abundantly clear that the new clause does not require the listed bodies to collect data or information on behalf of the Secretary of State or to seize documents from people, as it applies only where the Secretary of State has reasonable grounds for believing that a document is already lawfully in a body’s possession—that is to say, that it holds the document for the purposes of its functions.
To give an example, a person may be arrested for overstaying his visa in the UK. Immigration officers search his home for a passport or other documentation that will help with obtaining an emergency travel document from his embassy. They do not find it, but they do discover a letter to him from his local council. An immigration officer can then contact the council and ask whether it has taken a copy of that person’s passport or ID card, or a record of the number. Under the new powers, if the council has such a document, the immigration officer may direct that it is sent to the relevant immigration team. If the council confirms that it does not have such a document, there is no further action for it to take.
In a nutshell, we believe that it is important that the public sector works together to achieve effective immigration control. For those reasons, I ask that new clause 15 and new schedule 2 stand part of the Bill.
Question put and agreed to.
New clause 15 accordingly read a Second time, and added to the Bill.
New Clause 16
Detention etc. by immigration officers in Scotland
‘(1) Section 26B(1) of the Criminal Law (Consolidation) (Scotland) Act 1995 (interpretation of Part 3) is amended as follows.
(2) In the definition of “immigration offence”—
(a) after “means” insert “— (a)”, and
(b) at the end of paragraph (a) insert “, or
(b) (insofar as it is not an offence within paragraph (a)) an offence under the Immigration Acts or in relation to which a power of arrest is conferred on an immigration officer by the Immigration Acts;”.
(3) In the definition of “immigration enforcement offence”, omit paragraph (a).’—(The Solicitor General.)
This amendment ensures that the Scottish powers of detention prior to arrest and of arrest without warrant apply to all immigration offences contained in, or for which an immigration officer has a power of arrest under, the Immigration Acts. It ensures consistency in the immigration-related criminal investigation powers of immigration officers across the United Kingdom.
Brought up, and read the First time.
The Solicitor General
I beg to move, That the clause be read a Second time.
The aim of new clause 16 is to ensure that there is consistency in the immigration-related criminal investigation powers of immigration officers across the United Kingdom. As I have mentioned in this Committee, we have been involved in a dialogue with the Scottish Government to ensure that this clause, as with others in the Bill, will enable immigration officers to work effectively within the Scottish criminal justice system.
In England, Wales and Northern Ireland, a person may be arrested and interviewed in accordance with the Police and Criminal Evidence Act 1984 or the Police and Criminal Evidence (Northern Ireland) Order 1989 until a decision is made on whether they should be charged with the offence. In Scotland, that differs to the extent that in most circumstances, a suspect can currently only be questioned if they are detained but not yet arrested. Once the suspect is arrested, the general rule is that they cannot be questioned. That means that immigration officers in Scotland cannot properly investigate immigration-related offences for which they have a power of arrest under the Immigration Acts, but do not have the power to detain pending arrest.
The Chair
With this it will be convenient to discuss the following:
New clause 3—Time limit on detention—
In paragraph 16 of Schedule 2 to the Immigration Act 1971 after subsection (4) insert—
“(5) ubject to regulations under subsection (6), a person detained under this paragraph must be released on bail in accordance with Schedule 5 to the Immigration Act 2016 after no later than the twenty-eighth day following that on which the person was detained.
(6) The Secretary of State may by regulations make provision to vary by category of person the time limit under subsection (5).”
Paul Blomfield
I beg to move, That the clause be read a Second time.
I am very pleased to be speaking to new clauses 1 and 3, were tabled by the hon. Member for Bedford (Richard Fuller), a Conservative. I was delighted to have the opportunity to add my name to them so that they can be debated by the Committee. I think we are moving into new territory here, and I hope that the cross-party consensus that is reflected in my decision to support the clauses will be reflected in our deliberations.
In the previous Parliament I was pleased to serve as vice-chair of an inquiry into immigration detention on a panel that included the hon. Member for Bedford, along with other colleagues from the Government Benches, including the hon. Member for Enfield, Southgate (Mr Burrowes) and a former Conservative Cabinet Member, the right hon. Member for Meriden (Mrs Spelman). Opposition Members were in a minority on the inquiry panel, which drew parliamentarians from both Houses, including many with huge experience such as a retired Law Lord and a former chief inspector of prisons.
The inquiry was brought together by the all-party group on migration and the all-party group on refugees. Our recommendations, which were prepared after eight months of deliberation, included the limits on detention contained in new clauses 1 and 3. The recommendations were endorsed by the House of Commons on 10 September. The new clauses therefore build on the work of the inquiry and provide expression for the will of the House by introducing limits on indefinite immigration detention. This is not a particularly controversial proposal: we are unusual in this country in having no limit on administrative detention for immigration purposes.
Sadly, we have become increasingly dependent on detention, and that has been the case under successive Governments. This is not a party political point. Detention takes place in immigration removal centres, and the clue for their purpose should be in the name. They are intended for short-term stays, but we have become increasingly reliant on them, and as the use of detention has expanded rapidly over the last two decades, so has the size of the estate. In 1993, there were 250 detention places available in the UK; by 2009 the number had risen to 2,665, and by the beginning of this year it had risen to 3,915. The number of people entering detention in the year to June 2015 was just over 32,000—up 10% on the previous year. In contrast, Sweden, a country that in most years receives something like three times the number of asylum applications—I accept that immigration detention does not simply relate to asylum; nevertheless, there are much larger demands on that much smaller country—has 2,893 places, while Germany has just over 4,300.
Home Office policy, which is a good starting point, states that
“detention must be used sparingly”.
The reality is clearly different. Members will be aware of a number of high-profile incidents in immigration removal centres, including deaths and allegations of sexual assault. That was reflected in the evidence heard by our inquiry. In our first oral evidence session, we heard from non-governmental organisations and medical experts. Most powerfully, we heard from people who were at that time in detention centres via a phone link to immigration removal centres.
One young man from a disputed territory on the Cameroon-Nigeria border told us his story. He said that he had been trafficked to Hungary as a 16-year-old, where he was beaten, raped and tortured. He managed to escape and eventually made his way to Heathrow using a false passport, which was discovered on his arrival. He was then detained. We asked him how long he had been detained for. He told us that he had been detained for three years in the immigration removal centre. His detention conflicts with three stated aims of the Home Office: first, that those who have been trafficked should not be detained; secondly, that those who have been tortured should not be detained; and, thirdly, that detention should be for the shortest possible period.
New clause 1 seeks to put those Government aims on torture and trafficking in the Bill, and to add victims of sexual violence and pregnant women to the category of people not to be detained. Her Majesty’s chief inspector of prisons, Nick Hardwick, following an unannounced inspection of Yarl’s Wood immigration removal centre earlier this year, said to the Government:
“Procedures to ensure the most vulnerable women are never detained should be strengthened and managers held accountable for ensuring they are applied consistently.”
Following a case that was reported on 6 October, I understand that the Home Office is reviewing its policy on the detention of pregnant asylum seekers. I would welcome the Minister’s clarification on where that review stands.
New clause 3 seeks to deal with the wider issue of indefinite detention, the impact of which was a constant theme of our inquiry, and about which we received some striking testimony. Time and again we were told that detention was worse than prison. Initially, a number of us were puzzled by that, because we were not talking about the criminal justice system—many of those people demonstrate in due course that they have the right to be here—but those who were detained said that people in prison at least know when they will get out. As one former detainee told us:
“The uncertainty is hard to bear. Your life is in limbo. No one tells you anything about how long you will stay or if you are going to get deported.”
Medical experts told us that the sense of being in limbo and the hopelessness and despair leads to deteriorating mental health. One told us that those who are detained for more than 30 days have significantly higher mental health problems.
However, it is not just the impact on those who are detained. A team leader at the prisons inspectorate told us that the lack of a time limit encourages poor caseworking and lazy procedures in the Home Office. He told us that one quarter of the cases of prolonged detention that the prisons inspectorate had considered were the result of inefficient casework. That is not because it was inappropriate for people to be released. Despite being called immigration removal workers, we found—this is an important point—that most people who leave detention do so for reasons other than being removed from the UK. According to the latest statistics produced by the Government, more than half the detainees are released back into the UK. The system is therefore not only bad for those involved, but expensive and a waste of public resources, at a time when the Chancellor is looking for savings. Detaining someone costs £36,000 per year. Alternatives to detention, proved to be more effective in other countries, are significantly cheaper; so alternatives driven by imposing such a limit would save taxpayers’ money.
The recommendation to set a maximum time limit in statute, which new clause 3 would introduce, would not simply right the wrong of indefinite detention, but change the culture endemic in the system. By doing so, it would meet the aims of the Home Office’s own guidance, which is about detention being used more sparingly and only as a genuine last resort to effect removal. The proposed limit of 28 days reflects best practice in other countries and is workable for the Home Office, given that in the first three quarters of 2014 only 37% were detained for longer. It also reflects evidence about the mental health impact on those detained for more than a month.
Deprivation of liberty should never be a decision taken lightly or arbitrarily. Decisions are taken by relatively junior officials, with no automatic judicial oversight. With no time limit in place, it has become too easy for people to be detained for months on end, with no meaningful way to challenge their continued detention. The introduction of a time limit and the reduction in reliance on detention represents a significant change—it is in line with what happens in other countries, but it is a significant change for us. Therefore, in order to detain fewer people for shorter periods of time, the Government will need to introduce a much wider range of community-based alternatives.
In the report of the inquiry panel that I mentioned earlier, we gave a number of examples of such alternatives from other places, including the United States—we are not talking about countries that might be perceived as a soft touch. Indeed, Australia, a country whose immigration system is often held up as an example of toughness, has also developed constructive, effective and much cheaper alternatives to detention. Those alternatives allow people to remain in communities while their cases are being resolved, including when making arrangements to leave the country. Not only are the alternatives better; as I have said, they also cost less and are more successful, because they have higher compliance rates in terms of people’s willingness to return.
There is a recent UK precedent. When the coalition Government committed to reduce the number of children detained, they introduced the family returns process. The House of Commons Library described its design as
“to encourage refused families to comply with instructions to depart from the UK at an earlier stage, such as by giving them more control over the circumstances of their departure”—
and it worked. There has been a dramatic fall in the number of children detained, and the Home Office’s own evaluation of the scheme found most families compliant with the process, with no increase in absconding.
Gavin Newlands
They say that a country should be judged based on how it treats the most vulnerable, but the way that we have treated people who are attempting to gain asylum into the UK has been, at times, shocking.
The UK is the only country in Europe that uses detention with no official end date and that should shame us all. I am sure that I am not the only one who has been appalled at some of the detention stories that we have read about or seen on television. In particular, “The Glasgow Girls” served as a harrowing reminder of the cruelty that the UK’s detention policy brings about. Even though the policy of detaining children was ended in 2010, the Scottish Refugee Council has highlighted that children are wrongly assessed as being of adult age and therefore are still being detained. The council says:
“A small number of children are still detained at the end of the asylum process, after their case is heard by an independent panel, in Cedar’s Pre-Departure Accommodation. It is run by private companies…with welfare services provided by Children’s Charity Barnardo’s. This ‘open’ facility is designed as a last resort, before families are removed to their countries of origin. But there are still concerns about the affect its use has on children—many of whom are sent from Scotland on their way to their countries of origin.
In addition, some children who have been wrongly age assessed as adults find themselves detained, often for long periods of time.”
I hope that the new clause serves as a catalyst for further investigation, so that these young people/children are treated with dignity and respect, and are not detained full-stop. Westminster might still favour the policy of detention, but I think that we all agree that detaining young people is cruel and inhumane, and I ask the Immigration Minister to look further at this issue.
The case of Souleymane, who was detained for three and a half years, was highlighted in the detention inquiry report, and it serves as another cruel reminder of the policy of detention. There is no excuse for such a long period of detention. The case highlighted that detainees were being transported from one detention centre to another. The length of time that Souleymane spent in detention had an obvious and significant impact on his mental health, and I must ask, is that something that we are proud of?
New clause 3 does not go far enough, in that it has a caveat that I do not agree with. Nevertheless, it is a massive step in the right direction. Again, I want to see the ending of the policy of detention, as it is not a sign of the caring and compassionate country that I recognise the UK to be. The new clause will leave the provision for the Home Secretary to detain someone beyond 28 days by varying the time limit by category of person. In and of itself, it does not prevent cases such as that of Souleymane from happening again, as it hands the Home Secretary a wide discretionary power to overcome the 28-day obstacle.
Also, the parliamentary inquiry report suggested that the longer an individual is detained, the less likely it is that they will be removed from the UK. For example, the report found that, of the 178 people who have been detained for 12 months or more, 57% of them were ultimately released.
In talking about detention, I must use this opportunity to praise the work of the Scottish Refugee Council and other community-based organisations and groups that support asylum seekers on the frontline. Regardless of our political views, we should extend a debt of gratitude to those groups for the fantastic and at times difficult work that they do. The Bill and this provision in particular will have a significant impact on their work, and it is important that we support them when the Bill becomes law. Therefore, I ask the Immigration Minister to take time to meet groups such as the Scottish Refugee Council to learn more about the issues that they face, and to find out what support they need to perform their important jobs.
Detaining someone for any period of time is not something that we should be proud of. These detention centres are a symbol of the cruel approach that successive UK Governments have adopted with regard to asylum seekers. That is why we in the SNP do not think that the new clause goes far enough. The SNP policy on asylum seekers is more progressive. We want asylum seekers to have the chance to work, earn a living, pay tax and contribute to the community while they are waiting for a decision to be made on their application. Economically that makes sense but, more importantly, it is the right and moral thing to do.
Keir Starmer
I support my hon. Friend the Member for Sheffield Central’s new clause and I pay tribute to the part he played in the report to which he referred. As he said, the report was powerful and strong recommendations were made. The key recommendations from the report were, first, that there should a limit of 28 days on the length of time anyone can held in immigration detention. Secondly, detention is currently used disproportionately frequently, resulting in too many instances of detention. The presumption, in theory and practice, should be in favour of community-based resolutions and against detention. Thirdly, decisions to detain should be very rare and detention should be for the shortest possible time and only to effect removal. Fourthly, the Government should learn from international best practice and introduce a much wider range of alternatives to detention than are currently used in the UK.
This is a real concern, a growing concern and a cross-party concern. I know that the Stephen Shaw work has been done and there is a report. I think that that mainly touches on welfare, but I will be corrected by the Minister if I am wrong. The new clause is important because it goes well beyond welfare issues; it is a point of real principle. In that spirit I support it.
Anne McLaughlin
In the immigration debate that took place in the Chamber, I spoke about a child who had been in detention. I know that the policy, notwithstanding what my hon. Friend the Member for Paisley and Renfrewshire North said, is no longer to detain children, but I want to repeat what I said about that child, and I will explain why.
I talked about a 10-year-old boy who was detained with his mother in Dungavel in Scotland and was then moved to Yarl’s Wood. He lost 10 lb in three weeks and lost so much hope that he turned to his mother one day and whispered, “It would be easier if we died. Mummy, please can we die?” I appreciate that there is not a person in this room—I have absolutely no doubt—who, if that child were standing in front of them, would not do whatever they could to help that child. This was somebody I knew pretty well.
Okay, so we only detain adults now, but I am not willing to believe that there is any Member here who, if they had a woman standing in front of them who had been through so much trouble to get here, who was a victim of sexual violence, and they could make the decision about that one person standing there, having heard her story, would not help her. I do not believe that any of us would not use the key that we have to free her from detention if we were able to do it. They are not standing in front of us now, but we are the ones who hold the key to whether those people suffer in the way that many hon. Members have described. That mother wanted to comfort her child. She wanted to reassure her child that it would be over soon, that “this will be happening” in two weeks or one week, three days or three months or whatever, but she could not. She could not reassure herself because she had no idea how long they were going to be there.
I think that the worst thing for people is not having a clue when or where it is going to end. I visited a family in Dungavel a number of years ago, as an elected Member of the Scottish Parliament and I felt intimidated. I felt intimidated by the surroundings and the uniforms, by the big jangle of the keys, by the prison-like atmosphere and the fact that I was fingerprinted. I was a Member of the Scottish Parliament and they fingerprinted me as I went in. If I felt intimidated, what must it feel like to somebody who has absolutely no control over their life, and has not had any for a long time because they have had to flee their country and ask for help in a foreign country? I cannot imagine it.
I pay tribute, as my hon. Friend the Member for Paisley and Renfrewshire North has done, to the organisations that support people in detention. I particularly encourage the organisations that demonstrate outside such facilities to continue to do so, because it makes a big difference to the people inside. There was a demonstration at Dungavel a couple of weeks ago. I know people who went, although I was unable to attend.
James Brokenshire
The hon. Lady is making her case and has indicated that she thinks that the measures do not go far enough. Just so that I understand, does she believe that there is a role at all for detention in immigration removal?
Anne McLaughlin
As a last resort. I have never said that we should never detain anybody, but detention is to be used as a last resort. In fact, I think the Minister himself said that the power to detain should be exercised only sparingly and for the shortest possible time. I do not know whether that is the case, but it should be the case.
If it is for the shortest possible time, that is a good argument for having a time limit in statute. I agree with the hon. Member for Sheffield Central, who said—I think the report of the inquiry into the use of immigration detention in the UK also made the point—that, without a time limit, the casework will suffer. We are all human beings. I am a deadlines kind of person; I do things at the deadline. I would love to be the kind of person who does things in preparation for a deadline, and I am always telling myself that I will be that kind of person, but we are all human and we all work to deadlines. If there is no deadline, of course things take a lot longer.
I also wanted to say something about the categories of people who could not be detained if the new clause were accepted. They would include people who have been trafficked. In an earlier sitting, several Conservative Members and I had a debate about people allowing themselves to be trafficked. I was pretty upset at the time, as were a lot of people, but I realise now how that misunderstanding came about: it is because there is an awful lot of talk in the media about people trafficking when it is actually people smuggling. I accept that is not the fault of the people who pick up the term, but the language that we use is extremely important. If we all accept that trafficking involves coercion and is done against the person’s will and that those people have effectively been kidnapped, I hope that we can accept that detention is an absolutely dreadful experience for them and affects them even more severely. I certainly support not detaining that group of people.
On the assisted returns project, I reassure the Minister, as I have said, that I understand that sometimes people must be detained. I also understand that sometimes they must be deported—removed from this country—because not everyone is entitled to live here. If that is done, it is far better to continue with schemes such as the family returns project. I have constituents and friends who do not want to return because their memories are of the country that they came from as it was when they left. All they need is reassurance from somebody that they trust that it is not the way it was, that it is safe for them and that there will be provisions and protections for them.
Most people who come to live in this country do so in such circumstances. They do not come here because they desperately want to live here. Most people would rather live in the country that they have come from. In leaving, they are leaving their family, their friends, their neighbourhood and the school that they went to. Most people do not want to give that up. Sometimes they need reassurance that they will be protected and that life is very different in the country that we are returning them to. That is why the approach must not be to criminalise them, lock them up or refuse to tell them when or if they will be leaving. The approach should be more humane than that, and should be about working with them rather than against them.
Sarah Champion
I will speak very briefly to the new clauses, because they seem logical and non-contentious. I am particularly pleased that they have been tabled in a cross-party manner and that they were developed from a cross-party inquiry by the all-party groups on refugees and on migration. They build on existing legislation, such the Modern Slavery Act 2015; that is particularly true of new clause 1.
We whizzed through all the new clauses and amendments, so I want to read the explanatory statement to new clause 1, which
“would provide that pregnant women, victims of trafficking, torture and sexual violence, and any other group prescribed by the Secretary of State, may not be detained pending an examination or decision by an immigration officer.”
I hope that the groups prescribed by the Secretary of State would include vulnerable adults, particularly those with a learning age that is deemed to be under 18.
I want to focus on women, pre-empting some of the arguments that Ministers might make against the measures, particularly new clause 1. The organisation Women For Refugee Women has said that 72% of asylum seekers have been raped as part of the persecution that they are fleeing, and almost all have been victims of gender-related persecution. I ask the Minister to consider that. The United Nations High Commissioner for Refugees detention guidelines state:
“Victims of torture and other serious physical, psychological or sexual violence also need special attention and should generally not be detained.”
I would also like to draw to the Committee’s attention the work of the Foreign and Commonwealth Office, which is working hard to end sexual violence in conflict by protecting survivors and actively prosecuting perpetrators. It seems to me irrational that while the FCO is working so hard and courageously, and receiving great commendation internationally for doing so, the Bill will effectively re-traumatise victims who have crossed borders to find safety in this country. It is also my understanding that the Home Office’s policy is to detain pregnant women only in exceptional circumstances. I therefore ask Ministers to give serious consideration to new clauses 1 and 3.
James Brokenshire
We have had a wide-ranging debate on an area of policy that is challenging and difficult. I say that because a significant proportion of those in immigration removal centres will be foreign national offenders. There has been a lot of discussion about asylum claimants, but if someone has made a claim for asylum, they should be receiving humanitarian protection. Hon. Members will equally know, for example, that we have suspended the detained fast track—a decision I took—to ensure that appropriate issues about vulnerability can be properly reflected in the arrangements.
There is a real challenge, about which I caution hon. Members, because if the official Opposition vote for new clause 3, they will be voting for a change of their policy. I note that exclusions were previously advanced for foreign national offenders and other groups, in recognition of some of the complexities and other challenges in this matter. People will seek to frustrate their removal at all costs. That is why, regrettably, there will always be a need for some level of immigration detention for when individuals fail to comply with requirements to leave the UK, seek to frustrate their removal or seek at times to use time limits as a means to string things out, because they know that they may gain advantage. Having said all of that, we are clear that detention should be used sparingly and only as a last resort.
We take our duty of care to those who are in detention seriously, for example, through healthcare and other provision. I recognise the reports on the issue of vulnerability to which I will come on, but there are many people working in immigration removal centres day in, day out, doing a tough and challenging job. In commenting on a number of the points made today, I put on the record my appreciation for those who are doing that tough job that supports our immigration centres and seeks to ensure that detainees are treated in a just, fair, appropriate and dignified way.
I underline that alternatives to detention should be used where possible, and I recognise that more can be done. The Bill and its new powers are part of the wider work to ensure that the Home Office has the right measures to manage individuals who are not detained and to ensure that they leave the UK when they no longer have any rights to be here. I continue to give great thought to ensuring that we provide an effective system that delivers value for money and seeks the departure or removal of increasing numbers of people who have no right to be here. There is the balance between enforced removal and encouraged or facilitated departure and we have already debated that broadly in respect of family groups.
New clause 1 would introduce a statutory prohibition on the detention of pregnant women and victims of torture, trafficking and sexual abuse. I note the generous way in which the hon. Member for Sheffield Central sought to recognise that it was my hon. Friend the Member for Bedford (Richard Fuller) who, on Second Reading, tabled an amendment on this issue. Along with many other Members of the House, he is tireless in his work on issues of immigration and detention and takes such matters seriously. I pay tribute to the former Member, Sarah Teather, who chaired the all-party group on refugees. While we did not always see eye to eye, I never doubted her focus and determination to ensure that the issues were considered by the House. I know that the hon. Member for Sheffield Central was part of that all-party group and continues that work.
I can tell the Committee that we take such issues extraordinarily seriously and they weigh heavily on Ministers when we seek to deprive people of their liberty. Therefore, in our approach we seek to ensure that detention is part of a removals process, which at times has to take into account issues of public protection as well. The issues of safeguarding and vulnerability are very much in our minds and that is why my right hon. Friend the Home Secretary commissioned Stephen Shaw, the former prisons and probation ombudsman, to undertake an in-depth review of how the Home Office treats vulnerable people who are detained. As I indicated, that is why I suspended the detained fast track, because I could not be satisfied that safeguards were operating effectively.
The Committee will be aware that we have received Mr Shaw’s report and are considering our response to that important issue. We are actively considering the report’s recommendations and we will come back to the House in due course to report on that.
I think that the hon. Member for Sheffield Central was seeking a timeframe from me. We are not seeking to delay; we are considering those issues carefully, but I want to get it right and come back to the House with an appropriate response that recognises the thorough work that Mr Shaw has undertaken.
Paul Blomfield
I thank the Minister for his comments on that specific issue. Will he come back to the House with a response to that review before the Bill has completed its journey through both Houses?
James Brokenshire
I can certainly tell the hon. Gentleman that I wish to ensure that we publish the report and the Government’s response before the Bill completes its passage through Parliament. Equally, I want to ensure that we come back when we can. It is important that we reflect properly on the report and the recommendations, which we are actively doing.
During our debate on bail, I made it clear that vulnerable people should not normally be detained under immigration powers. I reiterate that point now. This approach is our published policy. We have a clear list of individuals who are not normally suitable for detention unless there are exceptional circumstances in play. The list includes pregnant women, the elderly, and those who have been identified by the competent authority under the national referral mechanism as victims of trafficking and torture. It is unlawful to act in a way that is contrary to our published policy.
The hon. and learned Member for Holborn and St Pancras raised the issue of mental health and release from detention. He asked whether there would ever be circumstances where a high-risk individual may need to be released from immigration detention because of their poor mental health. I can confirm that there will be some cases involving mental health issues where an individual should not be detained under immigration powers, no matter how high the risk and no matter how imminent the removal. In those cases, the right course of action will normally be to transfer to the appropriate authorities.
The new clause lacks definitions of the relevant exclusions and, as such, would be open to broad interpretation, so it contains weaknesses. Such an approach could leave the Home Office open to damages. For example, if a woman was pregnant at the point of detention but not aware of the fact or chose not to disclose her pregnancy, the Home Office could be sued for damages after the fact. It is an unfortunate reality that, in some cases, individuals will not comply with the requirement to leave the UK and their removal must be enforced, which often requires a short period of detention.
Anne McLaughlin
I appreciate what the Minister is saying but could he not just write safeguards into the legislation?
James Brokenshire
I am making a technical point on the drafting of the new clause. There are issues of principle, but we believe that even if the principle were accepted, there are technical deficiencies in the drafting that Members might wish to reflect on, given that no amendments have been tabled.
Sarah Champion
I appreciate the open and generous way in which the Minister has approached the matter. I would like to build on what the hon. Member for Glasgow North East said. If the Committee supported the intention of the new clause, we would be very keen to work with the Minister to try to get the wording in such a state that the Home Office felt comfortable in taking it forward.
James Brokenshire
I do not support the new clause. I am certain that the intention behind it is not to undermine immigration control or to reward those who make spurious claims about being a victim of hideous events to avoid enforced removal when they refuse to leave the UK voluntarily. Sadly, those cases exist, which is why this is difficult territory and regrettably, that may be the practical effect of the new clause. However, I recognise that the issue of vulnerable people in detention is a major concern to MPs and to many people outside the House. I therefore ask that the Government are given time fully to consider Stephen Shaw’s review before the House legislates on a very complex issue.
New clause 3 would introduce a statutory time limit on detention unless the individual was listed in the regulations as being exempt from the time limit. There is a common misconception that detention under immigration powers is indefinite. I want to make it clear to the Committee that that is not the case. Although there is no fixed statutory time limit on the duration of detention under immigration powers, it is not the case that there is no time limit. It is limited by statutory measures, the European convention on human rights, the common law, including principles set out in domestic case law, and the legal obligations arising from the Home Office’s published policy, which states:
“Detention must be used sparingly, and for the shortest period necessary.”
Keir Starmer
On the question of “indefinite”, surely the detention is indefinite in the sense that there is no definite limit to it. The detention might not be unending, but it is indefinite in the way that we all understand “indefinite”.
James Brokenshire
Indefinite detention implies detention that cannot be brought to an end. For reasons of bail and the relevant principles in common law, the detention has to be linked to the ability to remove.
If we look at the cohort likely to be in detention for longer, the vast majority are foreign national offenders. That is the reality we are dealing with. There might be challenges that we are working through on identification, so that they may get the relevant travel documentation, or they might take other measures to prevent their removal. There are a number of challenging policy issues in this area, but I underline the policy principles that exist in respect of why detention is there and why it is linked to removal. Equally, I underline the relevant safeguards.
Hon. Members might say that non-compliant cases could be added to the regulation that sets out cases where the 28-day limit does not apply, but the use of the detention power is increasingly focused on non-compliant individuals to ensure their removal. In reality, even if the clause was founded in that way, there would be little impact if non-compliant cases were added to the list.
I recognise what hon. Members have said about ending the detention of children for immigration purposes. I am proud that the Government have introduced measures to ensure that the routine detention of children under immigration powers is used only in very, very limited circumstances. Equally, we do not detain individuals for age-assessment purposes. In cases in which an individual is held in an immigration removal centre and doubts arise as to whether they are an adult, we aim to release them immediately into local authority care, pending an age assessment.
I recognise that we are discussing a controversial policy area, but I underline the fact that we are dealing with the details. There are a range of public policy views and objectives that need to be advanced, but ultimately there are clear safeguards in the system. We will continue to reflect carefully on the issues of vulnerability, but I hope that, given those assurances, the hon. Member for Sheffield Central is minded to withdraw the new clause.
The Chair
I remind the hon. Member for Sheffield Central that he may withdraw new clause 1, or press both new clauses to a vote—that is a matter for him—but he will be winding up the debate on new clauses 1 and 3.
Paul Blomfield
I am mindful there might be a vote in the Chamber in a few minutes, so I will try to be brief. I accept the Minister’s point that this is a complex and difficult area of policy, but evidence from other countries demonstrates that statutory limits on administrative intervention can and do work effectively. There is a case to be made for the limit suggested in new clause 3 and the specific exclusions suggested in new clause 1.
I underline the breadth of support across the House on this issue. That was evident in the inquiry and in our debate on 10 September, when 25 Members from all parties represented on this Committee—and more besides—spoke. The House, as a result of that debate, endorsed the recommendations.
On the Minister’s point about foreign national offenders and the wider caveats in new clause 3, not all foreign national offenders are necessarily a risk to public safety, and issues around that need to be addressed. I accept his point that there may be a lack of precision in how the new clause is drafted. For that reason, I agree not to press new clauses 1 and 3 on the understanding that he will, as he indicated, actively come back to us with the results of his consideration of the Shaw review. We will then have an opportunity to come back to the issue while the Bill proceeds in a way that achieves the objectives of the new clause, but perhaps in a better crafted way. I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
The Chair
Before we adjourn, I add that I may not be with you again if business finishes on Tuesday morning next week. I thank the Clerks, Members on both sides of the Committee, including those on the Front and Back Benches, and everyone for their co-operation during proceedings.
James Brokenshire
On a point of order, Mr Owen. As this may be our last opportunity as a Committee to recognise your contribution to the Bill in ensuring that our consideration is in order and in adding to the good-natured spirit of our proceedings, may I, on behalf of the Committee, thank you for your chairmanship? We have very much appreciated your guidance and assistance, which has added to our consideration of the Bill.
Keir Starmer
On a point of order, Mr Owen. I endorse that point of order. Not only for the group the Minister spoke of but for those of us who have gone round this track for the first time, your help and assistance and that of the Clerks has been invaluable to each and all of us.
Gavin Newlands
Further to that point of order, Mr Owen. May I point out that I was 6 feet behind Anne when the doors were locked for the earlier vote?
The Chair
The point has been made.
Ordered, That further consideration be now adjourned. —(Charlie Elphicke.)
Housing and Planning Bill (First sitting)
(8 years, 6 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chair
I welcome you all to the first Committee sitting of the Housing and Planning Bill. I hope to keep our discussions pleasant and civilised. There are a couple of little rules. We are not allowed to have coffees, or to drink or eat anything else, and if anyone’s mobile phone goes off they will earn my strict displeasure, or a wiggle of my eyebrow at the very least.
Before we begin the more interesting part of the sitting, I ask Members who have interests to declare now to do so.
Mr Richard Bacon (South Norfolk) (Con)
I am organising a seminar on 20 November called “How should Norfolk grow?” It has eight commercial sponsors: Barclays bank, the New Anglia local enterprise partnership, the local train franchise, Anglian Water, Saffron Housing, Norwich International airport, Swallowtail Print and the Maids Head hotel.
The Minister for Housing and Planning (Brandon Lewis)
May I draw attention to my entry in the Register of Members’ Financial Interests?
Mr Stewart Jackson (Peterborough) (Con)
May I also draw the Committee’s attention to my entry in the Register of Members’ Financial Interests?
Chris Philp (Croydon South) (Con)
May I likewise draw the Committee’s attention to my declarations in the Register of Members’ Financial Interests?
Julian Smith (Skipton and Ripon) (Con)
Likewise, I draw Members’ attention to my entry in the Register of Members’ Financial Interests.
Seema Kennedy (South Ribble) (Con)
I draw Members’ attention to my declaration in the Register of Members’ Financial Interests.
Helen Hayes (Dulwich and West Norwood) (Lab)
Chairman, I would like the Committee to note that I am a councillor in the London Borough of Southwark and that I employ a councillor in my parliamentary team.
Peter Dowd (Bootle) (Lab)
I also declare that I am a member of my local authority.
Kevin Hollinrake (Thirsk and Malton) (Con)
May I draw Members’ attention to my entry in the Register of Members’ Financial Interests?
The Chair
All duly noted. Thank you very much indeed.
Before we move to the discussion, I need to deal with a few formalities. I first call the Minister to move the programme motion.
Ordered,
That—
(1) the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 10 November) meet— (a) at 2.00 pm on Tuesday 10 November;
(b) at 9.25 am on Tuesday 17 November;
(c) at 11.30 am and 2.00 pm on Thursday 19 November;
(d) at 9.25 am and 2.00 pm on Tuesday 24 November;
(e) at 11.30 am and 2.00 pm on Thursday 26 November;
(f) at 9.25 am and 2.00 pm on Tuesday 1 December;
(g) at 11.30 am and 2.00 pm on Thursday 3 December;
(h) at 9.25 am and 2.00 pm on Tuesday 8 December;
(i) at 11.30 am and 2.00 pm on Thursday 10 December;
(2) the Committee shall hear oral evidence in accordance with the following Table:
Date | Time | Witness |
|---|---|---|
Tuesday 10 November | Until no later than 10.00 am | Greater London Authority |
Tuesday 10 November | Until no later than 10.45 am | Local Government Association; London Councils |
Tuesday 10 November | Until no later than 11.25 am | National Housing Federation; PlaceShapers |
Tuesday 10 November | Until no later than 2.45 pm | British Property Federation; Federation of Master Builders; Home Builders Federation |
Tuesday 10 November | Until no later than 3.15 pm | Shelter; Crisis |
Tuesday 10 November | Until no later than 4.15 pm | Peaks and Plains Housing Trust; Hastoe Group; Riverside; L&Q |
Tuesday 10 November | Until no later than 5.00 pm | National Landlords Association; Residential Landlords Association; Association of Residential Letting Agents |
Tuesday 17 November | Until no later than 10.15 am | Chartered Institute of Housing; Planning Officers Society; Royal Town Planning Institute; Town and Country Planning Association |
Tuesday 17 November | Until no later than 10.45 am | Campaign to Protect Rural England |
Tuesday 17 November | Until no later than 11.25 am | Department for Communities and Local Government |
(3) proceedings on consideration of the Bill in Committee shall be taken in the following order: Clauses 1 to 17; Schedule 1; Clauses 18 and 19; Schedule 2; Clause 20; Schedule 3; Clauses 21 to 86; Schedule 4; Clauses 87 to 90; Schedule 5; Clauses 91 to 102; Schedule 6; Clauses 103 to 121; Schedule 7; Clauses 122 to 127; Schedule 8; Clauses 128 to 134; Schedules 9 and 10; Clauses 135 to 139; Schedule 11; Clauses 140 to 145; new Clauses; new Schedules; remaining proceedings on the Bill;
(4) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Thursday 10 December.—(Brandon Lewis.)
The Chair
That means that the deadline for tabling amendments to be considered in the first two line-by-line Committee sittings is by the rise of the House on Monday 16 November.
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Brandon Lewis.)
Resolved,
That, at this and any subsequent meeting at which oral evidence is to be heard, the Committee shall sit in private until the witnesses are admitted.—(Brandon Lewis.)
The Chair
Copies of written evidence that the Committee receives will be made available in the Committee Room if anyone wishes to pick them up.
Examination of Witness
Richard Blakeway gave evidence.
The Chair
We now move to the interesting part of the morning, which is oral evidence from the Greater London Authority. I particularly welcome Richard Blakeway. Thank you for taking the time to come and speak to us.
Before calling the first Member to ask a question, I remind you all that questions must be limited to matters within the scope of the Bill. If they are outside that scope, I will call you to order. We must stick to the timings in the programme, which means, I am afraid, that we sadly have only until 10 o’clock. For the sake of the record, would you kindly start by introducing yourself?
Richard Blakeway: Of course. My name is Richard Blakeway. I am the Deputy Mayor, responsible for housing, land and property at the Greater London Authority.
The Chair
Members now need simply to catch my eye and then to ask Mr Blakeway appropriate questions.
Chris Philp
Q 1 Mr Blakeway, could you start by briefly outlining the powers you currently exercise on the London Land Commission and explaining to the Committee whether there are any further powers you might find useful?
Richard Blakeway: As you know, the Bill has great scope. The Mayor is very supportive of the Bill and of measures to increase house building. Among the features of the Bill that we think are very important are some of the measures regarding land. We have sought to establish with the Government a London Land Commission, which seeks to identify and release surplus public sector-owned land. That builds on the work that the Greater London Authority has done as a landowner. We now have something like 99% of our assets under development and delivering about 45,000 homes. We would like to see an amendment to the Bill for a duty to co-operate with the Mayor and the land commission. In addition, we would like an obligation on the part of public bodies to compile a register of assets and maintain it, building on the London-wide register of assets.
Finally, we would like to see the opportunity for the Mayor to acquire sites once they become identified as surplus—a kind of first refusal—where they have some strategic importance. They may sit with one of our initiatives, such as a housing zone, or within an opportunity area. In that way, we would be able to manage a proper disposal and ensure that homes are built at pace.
Chris Philp
Q 2 Do you need any further powers to make sure that other public bodies beyond the GLA—such as Transport for London, the NHS, Network Rail or even the Ministry of Defence—will actually bring forward the sites for disposal? Rather than you simply recommending it, do you need any further powers to—perhaps compel is the wrong word—take over the disposal process?
Richard Blakeway: I think we certainly need the transparency that I talked about and therefore the obligation to compile a register of interests and to co-operate. Having first refusal—the idea that we have the right to acquire an asset before someone else—would obviously mean that we would be paying for that asset at the appropriate value, but we could then lead a coherent procurement. I think it is a really important change.
Chris Philp
Q 3 Finally, are the CPO powers in the Bill adequate for the purposes of the Mayor of London and the GLA for things to go further?
Richard Blakeway: We welcome the Government’s focus on CPO, but we would like them to go further. We would like to see two things. The first is a general CPO power for the GLA around regeneration. At the moment, our CPO powers are separated, depending on which part of the GLA group you look at. The GLA itself has CPO for housing; Transport for London has CPO for transport. We would like that to be interchangeable.
Secondly, we would like to see the ability for us to devolve our CPO powers to members of the GLA family. For example, where we have established mayoral development corporations—something which was enabled through the Localism Act—we would like to see the ability for us to devolve those CPO powers. For example, the Old Oak Common mayoral development corporation could exercise CPO.
Helen Hayes (Dulwich and West Norwood) (Lab)
Q 4 What do you think will be the impact of the starter homes clause on the provision of affordable housing in London?
Richard Blakeway: The GLA welcomes the introduction of starter homes and the Government’s focus on promoting home ownership. A number of things relating to starter homes will be in the regulations. For us to undertake a full assessment of the impact, we will have to see the regulations first. The first important point to make is that starter homes are not a substitute for all affordable housing. They are another affordable housing product. While there will be a quota that has to be delivered on site, we would still expect the London plan policy, which seeks to maximise affordable housing and therefore other affordable housing products, to apply once the quota has been sought.
The second important point is that we already have quite a well-established intermediate market in the capital. In particular, we have a significant number of shared ownership properties coming forward. Since this Mayor was elected, we have helped 52,000 Londoners purchase through intermediate products, predominately shared ownership, and we have a target to help a quarter of a million Londoners over the next decade. It is really important that starter homes complement existing products such as that, rather than substitute for them. The two have to work alongside each other, not least because they will probably target people with different incomes.
Helen Hayes
Q 5 As you know, the cap price for starter homes in London is £450,000. Could you say a little about for whom you think a starter home at £450,000 in London will be affordable? Are you content that the cap is appropriate?
Richard Blakeway: Clearly, starter homes will have to be valued in the normal way. There should not be any suggestion that this will inflate prices in any sense. We would expect a range of homes to be delivered at a range of prices. We strongly support the comments that the Prime Minister made when he said that he hoped that in London he would see a number of starter homes come forward in the £150,000 to £200,000 price bracket. It is also important to recognise what happens in the open market at the moment. Typically, according to Council of Mortgage Lenders data, we are seeing first-time buyers purchase at about the £280,000 or £290,000 price mark. That is typically what happens in the open market at the moment. From our perspective, it is very important that a range of starter homes are delivered at different prices. It is also important that there is still space for the equivalent number of other intermediate products—particularly shared ownership—to be delivered on schemes.
Helen Hayes
Q 6 Finally, are you concerned that starter home development will be free from the community infrastructure levy and section 106 contributions?
Richard Blakeway: As we understand it, so-called exemption sites are free from the community infrastructure levy. Our expectation, however—our strategic land assessment has done a tremendous amount of work to identify brownfield opportunities—is that there are probably not many exemption sites in London where that would apply. Where it applies otherwise—clearly, starter homes should apply to all significant sites—affordable housing is already exempt from CIL, and it is just another affordable housing product.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
Q 7 May I press you on the impact of the starter homes clauses on more innovative models of affordable and intermediate housing? I am thinking, for example, of Pocket housing, which the Mayor has been very supportive of, and where eligibility is secured in perpetuity through a section 106 agreement. Do you think those clauses will have an impact on those types of models and their ability to expand across the capital?
Richard Blakeway: I emphasise the point again that starter homes are not a substitute for affordable housing and are not intended to be a substitute for all intermediate products. We would like to see both working alongside each other, and we would like to see products such as Pocket. The GLA is delivering a long-term investment partnership. I am sure Pocket would say that many of the people it helps to house are within the general expectation for starter homes—they are below the age of 40, for example, and within the price bracket to which the house-price cap applies. It is very important that starter homes work in London. They are a really important addition to help people achieve their aspiration to own a home, but they have to work alongside other intermediate products.
Matthew Pennycook
Q 8 As the Bill stands, have you been assured that they are an addition and will not simply squeeze out other affordable housing in the capital?
Richard Blakeway: A number of the key points will be articulated in the regulations. What is on the face of the Bill at the moment means that starter homes can certainly work alongside other intermediate products in the capital. The key bit will be what is in the regulations. One of the key issues is the quota of starter homes that will be required, which will be articulated in the regulations. There has been speculation that it will be 20%, but we are waiting to see the regulations. It is important that they work alongside each other. Just to pick up on your point, we have a number of intermediate products where the investment is locked in in perpetuity, and we would like to see that continue.
Mr Bacon
Q 9 Mr Blakeway, what possibilities are there for the provision of serviced plots within the GLA area for people who wish to build their own home, either individually or in what the Self-build and Custom Housebuilding Act 2015 calls “associations of individuals”, who come together to build their own houses?
Richard Blakeway: We think there is a real role for both custom build and self-build. On the identification of plots, we are working closely with local authorities to compile a list of potential sites. In addition, the GLA is acting as one of the Department for Communities and Local Government’s vanguards and establishing a register of people with an interest. We are seeing a phenomenal rate of interest in London: more than 600 people have signed the register in the past three months. People often look at London and say that custom build and self-build cannot work in the capital, but we do not believe that is the case. We think it has a role to play in the capital—particularly in outer London. We also think that custom build, in particular, has a role to play among conventional house builders and housing associations. There is absolutely no reason why you cannot reserve a proportion of plots for custom build on a large regeneration scheme or development site.
Mr Bacon
Q 11 In relation to large cities, Berlin has more than 3,000 dwellings that have been developed very recently using self-build and custom house building. Are you saying that in large urban areas such as London it is not a problem to do it in the way that some people are suggesting?
Richard Blakeway: It is more challenging because we have a very heated land market and development opportunities tend to be more complex, but it should not be dismissed. We think it has a particular role to play, for example in outer London where the kind of density that might be built through custom build and self-build is appropriate to the local vernacular.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
Q 12 Are you certain that the sale of high-value council housing will yield enough resource to fund the right-to-buy scheme? Do you think it will guarantee that enough houses are built?
Richard Blakeway: Certainly within London, our analysis—and we have had some support from Savills on this—suggests that there are sufficient capital returns and receipts from the sale of high-value council houses in the capital to cover the cost of discounts in the capital and the cost of reprovision, as well as other things such as debt financing and so on. The straightforward answer is yes, within London.
Dr Blackman-Woods
Q 13 The Bill does not require social housing to be built in the same place that houses were sold off through the right-to-buy scheme, so how can we guarantee that enough of those houses will be built in London?
Richard Blakeway: The Government have very clearly set out their ambition that there is at least a one for one replacement of those homes, so you will get one extra home each time. That is a very clear statement by Government and is something that our modelling shows can be achieved within London. In addition, we would like to see it go further. We would like to see a two for one replacement in London, so that you get even more affordable house building as a result. I note the point that you make about where those homes are built and whether they can be built within borough. Given that the reprovision of council homes should, in the first instance, be undertaken by the local authority in our view, we would expect that it would look to achieve that within borough, but I think realistically, constraints around both finance and land will mean that not all homes are reprovided within the existing borough. The important thing from our perspective, given that we have one housing market within London, is that they are reprovided within the capital.
Dr Blackman-Woods
Q 14 Nevertheless there is not a requirement to do that. Would it be more helpful if there was a requirement that the houses are replaced in the same area that they are sold from?
Richard Blakeway: There are a number of statements relating to reprovision which are very clear about that being done within the local area. We have an established role for the Greater London Authority as well as the London Government more widely around housing provision. The Localism Act gave the Mayor of London the same functions as the Homes and Communities Agency. We would expect the reprovision to be done within the capital. Government have been very clear that that is their intention and their aspiration. The issue is whether we are doing one for one replacement or whether we are seeking to exceed that, and we would like to see two for one replacement.
Seema Kennedy
Q 15 In relation to clauses 22 to 31 on rogue landlords, do you think the provisions in the Bill will raise the standard of property available in the rental sector in London?
Richard Blakeway: We very warmly welcome Government’s measures on tackling rogue—often criminal—landlords, not just the measures in the Bill but more widely. We very strongly welcome that. One of the key changes which we would like to see is for us to have access to the data which will be collected around bad landlords. One of those clauses pertains to that. We would like the GLA to have access to that because it would enable us to build on existing programmes which are seeking to improve the quality of the rented sector in the capital, not least the London rental standard. We have something like 140,000 private rented properties already managed under that standard and the higher expectations which that demands. So we think it will make a significant impact, we welcome the changes, but we would like access to the bad landlord database.
Kevin Hollinrake
Q 16 Mr Blakeway, one of the biggest challenges in providing more housing is delays in the planning system. There are a number of measures in the Bill, such as insisting on local plans by 2017, simplifying overall plans and more timely decisions in planning in principle. How do you think these will work out in terms of expediting the planning system?
Richard Blakeway: We welcome all the measures that are being introduced by the Government to try to accelerate or expedite the planning processes. As you know, since the GLA’s inception, we have had a long-established strategic planning role and in particular we are keen to build upon clause 101, which gives the Mayor greater authority to exercise those strategic planning powers. In addition, we would like to be able to play a role around permission in principle and issuing development orders, as well as the register of brownfield sites and our ability to co-ordinate that. As a basic principle, we would like to see the Mayor of London exercise the kind of functions that the Secretary of State envisages exercising in the rest of the country.
Mr Jackson
Q 17 Obviously there is a predisposition in the Bill towards support for residential accommodation and housing in London and across the country. What impact do you think that might have, specifically in London, on commercial and business premises?
Richard Blakeway: I think that some of the issues in relation to the conversion of office to residential are actually outside the Bill. None the less, we very much welcome the Government’s agreement that there will be an exemption until May 2019 for some of the existing areas that we have sought exemptions for, such as the CAZ—the central activities zone—the Royal Docks enterprise zone, Tech City, and the northern part of the Isle of Dogs. We really welcome the Government’s move on that. Clearly, the article 4 measure allows those areas to formulate an application to extend the exemption beyond 2019 and there is obviously a window to do that.
Brandon Lewis
Q 18 May I take you back to the conversation a few minutes ago about starter homes? Are you able to give us an idea, even if it is a ballpark figure, of the average price paid by a first-time buyer for a home in London?
Richard Blakeway: A ballpark price would be about £290,000. I think that is based on CML data.
Brandon Lewis
Q 19 So that is somewhere below the cap for starter homes?
Richard Blakeway: Correct.
Brandon Lewis
Q 20 So at what sort of level would you like or do you expect starter homes to be provided for in London?
Richard Blakeway: A similar level. That is why I do not see the cap as an issue. It is striking, for example, that the purchase price with shared ownership is broadly the same price as first-time buyers pay on the open market; again, it is about £290,000. It is logical, therefore, to expect starter homes to be in a similar price bracket.
Brandon Lewis
Q 21 From the work you have done looking at this and the opportunities for London in the starter homes brand, do you see that as an opportunity to get an overall increase in the housing supply in London—to push that supply up?
Richard Blakeway: Yes. We see a real role for starter homes within the capital. As I have set out and as you know from our conversations, we expect that to happen alongside other products, such as shared ownership, which can play a different but similar role to promote low cost of ownership in London. We think there is a real opportunity to increase not just the volume, but the proportion of low cost of ownership opportunities in London with a suite of products, including starter homes and shared ownership. What we would like to see is a role for the Mayor of London to co-ordinate that being reflected in the Bill—a change to the Bill to enable that.
Dr Blackman-Woods
Q 22 How can you be so confident? Have you carried out work on this to know that other affordable housing products will also be delivered alongside starter homes?
Richard Blakeway: I think I have expressed some caution to the extent of saying that some of the issues in relation to starter homes will be set out in the regulations, and that to undertake a full assessment we need to see the regulations. One critical thing is what percentage of starter homes are required on each site—that is a critical issue that will be set out in the regulations. What we have said very clearly, however, is that the quota of starter homes will be applied, but then we would expect that the London plan policy, which seeks to maximise affordable housing, will also be applied afterwards. So the two tests are still applied to schemes.
Brandon Lewis
Q 23 Just to finish off my query on starter homes, bearing in mind your comments a few minutes ago about planning permission in principle on brownfield land and the London Land Commission—I should declare that I am joint chair—do you see a role for the work that the London Land Commission is doing in identifying land, working with that brownfield register and planning in principle in being able to deliver homes such as starter homes?
Richard Blakeway: Yes, and that is why I think some of the changes that we are suggesting to strengthen the strategic role that already exists for the Mayor of London are important so that we can co-ordinate each of those elements. As you say, each of them are connected and interrelated. So the changes to allow us to strengthen the land commission and have that duty of co-operation, the changes so that we can issue development orders in relation to planning in principle—PIPs—and the changes to allow us to co-ordinate and ensure that boroughs are in conformity with the brownfield register are all really important, and it is important that the GLA and the Mayor play a strong role.
Brandon Lewis
Q 24 Okay, I have two other areas that I want to touch on. I know my colleague wants to jump in as well. The current Mayor and your office have had some fairly ambitious targets around housing provision for London and have achieved some really good numbers. I know you have big ambitions going forward—on Second Reading we heard my hon. Friend the Member for Kingston and Surbiton (James Berry) outline some of his ambitions, which involved having more extra homes built in London for every home sold, which is the point you were making. With the brownfield registers, planning permission in principle, the compulsory purchase order changes, the section 106 changes and so on that are outlined in the Housing Bill, and the work that the London Land Commission is doing, what do you think that means for affordable housing provision in London and for the work of your office?
Richard Blakeway: I think it strengthens our ability to drive house building within the capital, and it helps us to achieve our target of seeing 49,000 homes completed each year—a level that has not been seen since the 1930s. Clearly, it gives a stronger role to the Mayor to build upon his existing strategic planning powers. It also enables new roles in relation to co-ordinating affordable products in the capital, particularly around low cost of ownership, and enabling surplus land to come forward and identifying brownfield opportunities. So I think the combination of those measures will help us to achieve our goal to double house building.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)
Q 25 Good morning, Mr Blakeway. Much of the Bill is rightly predicated on supply, but using the existing stock we have to support people into housing is also extremely important. How do you think the Bill will support landlords in recovering properties that have been abandoned?
Richard Blakeway: It is clearly useful that the Bill seeks to enable landlords to do that. We need to undertake a full analysis of how it would work in the capital, but we think it is a useful measure that has been introduced.
Teresa Pearce (Erith and Thamesmead) (Lab)
Given what is in the Bill about starter homes, do you think the Mayor’s housing zone bids that have already been successful will need to be revisited? Secondly, where housing associations are undertaking the build—their tenants now have the right to buy—because of the quality that needs to be in a housing zone bid, some of those properties will cost more to build than the market value. Is it your understanding that they will be recompensed the full cost or just the difference between market value and the sale price?
Richard Blakeway: Taking your first point about the relationship between starter homes and housing zones, once starter homes are introduced formally they will be incorporated within housing zones—
Teresa Pearce
Q 26 Will they be revisited?
Richard Blakeway: Well, there is no reason why that would undermine the ability of the housing zones to deliver. It is also important to set out that a number of housing zones already have schemes that have planning permission and will therefore just continue. On your second point in relation to the value of the stock and replacement value, that needs to be looked at, but there should not be that many instances in London where that is the case.
The Chair
Mr Blakeway, may I thank you very much on behalf of the Committee for coming to give evidence? It is very useful indeed. We will now move on to the next witnesses.
Examination of Witnesses
Mayor Sir Steve Bullock, Councillor Martin Tett, Councillor Phil Glanville and Councillor Philippa Roe gave evidence.
The Chair
First of all, welcome to all our witnesses. Thank you very much for coming to give evidence to the Committee. For the record, please would witnesses introduce themselves to us?
Sir Steve Bullock: I am the Mayor of Lewisham, and I am the executive lead for London Councils on housing.
Martin Tett: I am leader of Buckinghamshire County Council, but I am here in the capacity of a representative of the Local Government Association, where I am vice-chair of the housing board.
Philippa Roe: I am the leader of Westminster City Council.
Phil Glanville: I am a cabinet member for housing in Hackney.
Dr Blackman-Woods
Q 27 We have just heard evidence from the Deputy Mayor with responsibility for housing. He was fairly confident that, in addition to starter homes being delivered, other forms of affordable housing would be guaranteed. Perhaps we could have your views on this. Do you agree with him?
Philippa Roe: I do agree with him, but it is about giving us the flexibilities to be able to deliver those homes. I certainly believe that within London we can provide significantly more housing than has been provided to date. The sites are there. From the local authority perspective, our hands are somewhat tied in what we can deliver; there are a number of reasons for that. First, there is the funding side of it and how we can use the money. We have the housing revenue account, but the amount we can borrow against it is capped at a relatively low level. We could lift that cap quite sensibly and still borrow prudentially, and use that money to build. We are limited on where we can spend that HRA headroom, as well as section 106 or community infrastructure levy monies. I will come on to talk about the issues we face in Westminster which are driving this, but we in Westminster would like to be able to team up with other boroughs outside Westminster but within London to deliver our housing need. Also, I think we ought to be able to put into that pot money from high-value council house sales and from right to buy. It should be voluntary.
There are several reasons why we in Westminster have a real issue with housing, although they are true of central London and across the parties. It stems from the fact that there is enormous demand—people want to come and live in central London—and the way that the regulations work on taking on a duty to house means that your local connection does not have to be that deep. About 40%—39%, to be precise—of the people we take on a duty to house each year have less than a year’s connection to Westminster, and many of them have no connection at all because they have come from abroad and we are the first authority they register with. They do not necessarily have a particular need to live in Westminster, because they are probably not working in central London. There is no particular need for them to live in Westminster. What they need is good-quality housing.
Combine that with Westminster’s existing density of all its building, not just housing, and the high value of those units, and we are put in a position where it is just about impossible to house that huge demand within the boundaries of Westminster. We therefore need to be quite selective to support people with a genuine long-term connection to Westminster; we also prioritise people with work needs or who perhaps need to stay in Westminster because they have connections with health support services or whatever here.
I think that I am speaking on behalf of London Councils when I say that we believe that there is a mechanism which would free up local authorities to team up together. Perhaps several central London boroughs with money could team up with one or two outer London boroughs with land, in order to produce not just housing but proper regeneration. One of the issues we face in this debate is that we talk about housing in a silo. Actually you cannot do that if you are to create a proper community. You have to talk about proper regeneration of an area.
If we could pool those funds—perhaps even get some GLA money as well and work with a private sector developer—we could create mixed communities with the market housing, intermediate housing and social housing that we need, alongside a GP surgery, a school and hopefully, although it would be much more expensive, transport infrastructure that we could work with the GLA to put in place. That way we would be creating communities, not just homes. In return for that, it is important that the funding boroughs have some nomination rights, but it would all be voluntary and by negotiation with the receiving boroughs. Everybody would be happy; it would not be foisted upon a borough.
Martin Tett: Just to add to that, the LGA very much recognises the Government’s aspiration to build a substantial number of new houses every year. Probably, 230,000 houses is the minimum we need to build in order to accommodate the rapidly growing population. We are very keen to work with the Government in order to make that happen; we think that local councils can be part of the solution to this problem, rather than part of the problem itself. We are very keen to have those negotiations with the Government.
On increasing the supply of affordable housing, clearly there is a change in the definition of affordable housing, which is obviously material. The other concern we have is about infrastructure. I completely agree with Philippa’s point that it is not just about putting up houses. It is about securing the infrastructure alongside them that makes houses into communities. We obviously need to make sure that the exemption from section 106 for starter homes, for example, does not result in additional congestion, additional pressure on school places, addition pressure on doctors’ surgeries—all the sorts of things that lead local communities to resist house building in their area.
My last point is that there is still some detail to be worked through as to how the financial process will work for the funding of some of the processes, particularly for the discounts involved. We need to make sure that houses sold, for example, from the registered social landlord sector are replaced on a one-for-one basis in the same area. Obviously, a replacement in a different part of the country by the same RSL will not meet the housing need in the area where the original house was.
Sir Steve Bullock: I will not repeat what Philippa has said—
The Chair
You do not all have to answer every question.
Sir Steve Bullock: —but she is right about the need for the boroughs to work together. That is something that we are very keen to do. To get to the heart of your point, I have to say that I am less confident than the Deputy Mayor about the impact of starter homes. We welcome them as another way of getting people on to the housing ladder in London, but we have two anxieties. One is that they might drive out other forms of affordable home ownership, rather than being additional. Secondly, they are time limited, by definition. One thing that I suspect we may come back to is the mix of units that we need to deliver in order to meet the housing needs that we have as individual boroughs.
Phil Glanville: I am a bit more pessimistic than some of my colleagues. I think we are going to squeeze out social housing and truly affordable housing in the planning system. We are already seeing a lot of challenges across London in terms of viability in planning schemes. Where we would have seen developments come forward with 30% or 40% affordable housing, it is falling to 10% or 20%. It is not an alternative to shared ownership as a truly affordable, low-cost housing option. Of people in Hackney that are registered on the Share to Buy website, nearly 3,000 of those that have registered for an affordable housing purchase product earn less than £40,000. If we are talking about an accessible product, a product that has a cap of £450,000 in inner London is simply not affordable. That would bring the cost down to around £420,000. That is not accessible for those who aspire to home ownership but are earning less than £40,000. If we want to have a creative, vibrant inner London, where people of different communities can afford to live and buy—we aspire to let people buy—then we need a range of products. Starter homes are not a replacement for shared ownership.
Seema Kennedy
Q 28 Councillor Tett, what is the LGA’s view on the Bill’s provisions on brownfield sites? Will the power for local authorities to compile registers of brownfield land help to protect the green belt, particularly in places such as Buckinghamshire? I know that your view is of the whole LGA.
Martin Tett: Yes, I have to be very clear that I am representing all of the LGA here, not my particular area. We are very supportive of the idea of building on brownfield first, rather than going into open countryside or particularly into the green belt; we support the Government’s policy on that. The issue we have is the actual process for identifying brownfield sites. We need to be very clear about what they are and how they are defined, as well as the additional burden placed upon local authorities to compile and maintain those registers in, frankly, very financially stretched times, when, particularly in planning departments, it is quite difficult to attract and retain experienced staff. We need to ensure that, if this becomes an additional burden for local authorities, it is fully funded by the Government. As a concept it is a very good idea; we just have concerns about the financial implications and the practicality of it.
Seema Kennedy
Q 29 So as a concept you think it is a good idea. Do you also think that it helps communities to have ownership of these things, because there will be something very visible for them to see and feed into?
Martin Tett: I think you have asked a slightly different question. Brownfield sites—previously developed sites—are normally more acceptable to local communities. In terms of the development hierarchy, it is nearly always the area that local communities would support first, rather than going into greenfield or green belt sites.
As for local communities, that is a different issue to do with the infrastructure surrounding them and that is where people look. I go back to my previous observation about ensuring, for example, that any development does not lead to undue pressure in terms of road congestion, pressure at junctions, doctors’ surgeries and so on. That is a separate issue that goes back to section 106 and CIL obligations, which most local authorities look to housing developers to provide.
Helen Hayes
Q 30 From your understanding from your respective boroughs and work undertaken across the LGA, do you believe the sale of higher-value council homes can cover the costs of both the right-to-buy scheme and the levels of replacement of both the housing association homes lost to the rental sector and the loss of those council homes? Is that a realistic scenario?
Sir Steve Bullock: The difficulty in giving you a definitive answer to that is that it depends on how you implement the scheme. The definition of high value will be crucial to this. The initial work done on this, certainly from the London perspective, does indicate that there would be an outflow of funds from London to the rest of the country, which we are deeply concerned about. We are clear that we would need to know more before we could give you a hard and fast answer on this.
Philippa Roe: I completely agree with what Steve has said, and I would certainly endorse what Rick Blakeway said about trying to keep as much money as possible within London, where the greatest housing crisis is, so it seems sensible to keep the money there.
One thing that has been mooted is that, instead of the money being put in a pot for literally every high-value council house sold, the boroughs should be given a fund—a sum of money that they have to find, however—which is then supposed to be driven by the council house sales. One concern we have in Westminster about that is that obviously we have some very high-value properties, but our churn rate is very low. Up until very recently we gave tenancies for life and they could even be inherited. A sub-market-value rental property in central London is an extremely valuable asset. People do not give them up easily, so our churn rate is incredibly low. I would call for recognition of that if any targets are set, particularly for central London boroughs. I do not think ours is the only one to face that issue.
Martin Tett: Taking a wider perspective than just London, one of the ambiguities I mentioned earlier, as my colleagues have said, is about the definition of high value. How would you define that in different parts of the country? High value in London may be different from high value in Buckinghamshire, which may be different from high value in Doncaster or Teesside. There is ambiguity at the moment on that. In addition, what is the definition of a vacant property? If you have a tenancy exchange, is that property vacant or an occupied property in transition?
So we need to work through some of those ambiguities and negotiate with the Government. The other issue we have is how the model actually works. How do you predict for a particular year how much money is required for the RSL discount, which means you know effectively how much you have to charge to local authorities as a levy? That in turn dictates how much they have to sell. We are not clear yet on the details of how that will operate. Again, we are happy to negotiate that with the Government.
Phil Glanville: We need to see some clear exemptions around the value of new properties that are being built. Councils such as Hackney and Islington, Camden and Southwark have ambitions to build new affordable housing on their own land in London in order to meet that housing need. If that is taken into account when they become void, building any new home in the centre of London is likely to see those homes included within any cap or formula. Although there could be flexibility on exempting them, if their value is still included in the formula, the effect is the same: you would have to sell more of your existing stock.
It is worth saying when we are talking about high-value properties in London that Hackney is still the 11th most deprived borough in the country and the wards on the City fringe are some of the most deprived in Hackney. On Rightmove today I saw properties there that are worth £450,000. That is for a two-bedroom flat in a block that was built in the 1930s and ’40s; it is not a street property in Kensington, Islington or Stoke Newington. That is the effect that the overheated London market is having on our council stock. These are still very humble family properties on council estates in London; that is not the definition of places where poorer people should not live, which is what I think was the genesis of the policy in the Policy Exchange report.
Helen Hayes
Q 31 Given some of the uncertainties that you have all outlined, do you think too much is being left to regulations when it should be in the Bill?
Phil Glanville: Yes.
Philippa Roe: I would say no, because the Bill is going through now, this is complex, and if we tried to rush it through too quickly now there might be unintended consequences. I would like to see proper time given for the regulations to be introduced, picking up on those unintended consequences.
Martin Tett: I agree with Councillor Roe about unintended consequences. If you try to shoehorn everything into the Bill, there is a danger of locking in things on which you might need flexibility later. The LGA is keen to sit down with the Government, understand some of the intentions behind the Bill and try to work through the best solutions that lead to the best outcomes for not just the Government’s policies but local councils and their housing responsibilities.
Sir Steve Bullock: Going forward, the Bill is interesting in the way it proposes to create that space. I suspect that that means that if we are going to be in an ongoing process of negotiation beyond the Bill becoming an Act, local and central Government need to step up their games to demonstrate how they will make that work and how we can have sufficient transparency to provide the reassurances that people will want.
Mr Jackson
I was rather remiss earlier for not declaring another interest that might not be in the Register of Members’ Financial Interests: I am a vice-president of the LGA, so that is on the record. That brings me neatly to Councillor Tett.
Mr Jackson
Q 32 Yes, regrettably.
If the Bill becomes law, the Secretary of State will acquire powers in respect of local development plans. With your LGA hat on, Mr Tett, why do you think a significant number of local planning authorities have still not adopted local development plans? Is there a systemic issue that is preventing them from doing as other local authorities have done?
Martin Tett: I can give a generic answer to that, but we would have to get down to some specifics as well. There is a complex answer to what sounds like a very simple question. In some cases I suspect that, quite frankly, local authorities have not risen to the challenge sufficiently. In some areas, though, I think they have made their best efforts but, during the process, have fallen foul of various requirements. The one that is cited to me a lot is evidencing the duty to co-operate to the satisfaction of the planning inspector.
There is a lot of frustration in some councils because they have been found to be inadequate and effectively have to restart the whole process. A lot of councils say to me, “Why can’t we go back to where we were found to be inadequate, rather than having to start again?” Councils in my area have failed their local plan on two occasions and are now well into their third, whereas had they been able to short-circuit that, they would probably now be well into adopting a plan. There is a variety of reasons throughout the country and it is a long-drawn-out process. In some cases, councils have not risen to the challenge; in other cases, the process itself is convoluted, complex and difficult.
Mr Jackson
Q 33 Is that officer capacity or political leadership?
Martin Tett: It is both. There is a variety of answers to that. In some cases, if one is honest, there has probably been inadequate political leadership, but often local councils are really struggling with sufficient professional, experienced officer capacity. One thing we have all experienced across virtually every council in the country is that experienced, professional planning officers are very difficult to recruit and retain. They are being hoovered up—I use that expression quite often—by the private sector. As the building and civil engineering industries have recovered nationally, they have been able to pay substantially higher salaries than local councils. It is very difficult to recruit and retain the experience required for the successful implementation of a local plan.
Mr Jackson
Q 34 May I ask the London representatives about the parts of the Bill that relate to rogue landlords, banning orders and so on? How do you see that working within the context of London boroughs?
Martin Tett: First, although we welcome the provisions in the Bill, we are not clear that they will necessarily go far enough to make the impact that we all feel is needed. For example, on the level of fines, in my borough we had a landlord who was making £319,000 a year. That is at the extreme end, with landlords who are close to being criminal. A fine of £5,000 would be a minor inconvenience to them. Secondly, we would welcome the proposed register, but it needs to be very accessible. The deputy Mayor has been talking about that. It may be something that individual or would-be tenants need to be able to access.
Philippa Roe: We similarly support the proposals. They sit alongside the tools which, as a council, we already use very effectively—for example, to do with environmental health—to pick up on landlords who are providing substandard properties. The proposals will be another tool in our armoury, which is good.
Phil Glanville: I would go along with what has been said: the proposals are positive. Sharing the tenancy deposit database with local authorities allows them to build up a better picture of landlords in a given area or neighbourhood. It is a question of where thresholds lie in terms of banning orders and the register, and where they will end up. Moving to a fine-based system rather than having to take things to a full prosecution is a positive step—though one questions whether the fines would be enough of a deterrent. In building more tools for our armoury the proposals are a positive step.
Matthew Pennycook
Q 35 I would like to return to part 4. There is nothing on the face of the Bill that would ensure the proceeds from the sale of high-value council homes—or payments to the Secretary of State, in cases where local authorities do not want to make those sales—will be kept in the local area. Miss Roe, you told the Evening Standard in July that as a result of this policy:
“What we will see is a reduction in the number of social housing units in London and more units built outside.”
There are concerns in rural areas, too, that we will not see that link. Let me ask all the witnesses—what would you like to see, or what would need to be amended in the Bill, to give you certainty that the proceeds will be kept locally, to meet housing need in the area from which the proceeds have been taken?
Philippa Roe: First, I was misquoted in that article—that was not quite what I said, although it has been used and used.
As Richard Blakeway said, we understand that London is going to generate far and away the largest proceeds from this measure, given the value of our housing stock. The Government need to find a solution to funding right-to-buy sales outside London, and there is an acceptance that some of the proceeds will have to go outside London. However, there needs to be a mechanism within the regulations for keeping most of that money in London, because it is London that has the biggest housing crisis. It seems sensible to use that money to create housing where it is most needed, so I am hoping that we can find a balance.
Matthew Pennycook
Q 36 You say there is an acceptance that some of the proceeds will leave the capital. Do you think, therefore, that the amendment tabled by the hon. Member for Richmond Park (Zac Goldsmith) to keep the proceeds within London is unrealistic?
Philippa Roe: I would like him to see it succeed. Whether the Government will accept that, given the financial pressures they will face with right-to-buy sales outside London, I do not know. It is worth trying, but I am not sure whether he will succeed.
Mr Bacon
Q 37 Councillor Glanville, you said that you want to build, in your authority, affordable housing on land that you own. You emphasised the importance of exemptions. Are you promoting housing co-operatives as a way of delivering affordable housing? Perhaps the other witnesses could answer for their own authorities.
Phil Glanville: To answer that question, we have quite a few housing co-operatives within the borough already. They tend to be managing existing stock that they have been bequeathed through CPOs in the past and through the squatting movement in the ’70s and ’80s. As far as I am aware, they are not currently seeking to develop. We are focusing on working with housing association partners and our own new build programme that will deliver 3,000 homes over 10 years, 52% of which will be truly affordable. The rental properties there will be council rented homes on our land, making best use of our assets. We are bringing forward 18 sites. In fact, the borough is the largest house builder of any kind within Hackney, including building homes for sale, which is important as we are not against building homes for sale or for low-cost home ownership; we just do not think that the Bill will help with that process in boroughs such as Hackney.
We are also doing regeneration with our partners. We are tripling the density of an estate called Woodberry Down in the north of the borough, where we are building 5,500 homes over the next 20 years. We have no lack of ambition to develop such homes within the borough. With some of the freedoms that Councillor Roe mentioned around the HRA, we could do a lot more.
Mr Bacon
Q 38 To be clear, for the land that you own on which you plan to build affordable housing going forward, the council is not proposing that those be held as housing co-operatives.
Phil Glanville: No.
Sir Steve Bullock: We also do not expect some of our existing housing co-operatives from that historical period to play a significant part going forward, although we are doing other things. Harking back to an earlier question, we have literally just agreed on a scheme for self-build. However, there is an issue with a number of these alternative approaches that is simply about scale. To get the volume of units that we need, we are having to build in thousands, rather than tens and hundreds. However, we have a housing association that is owned by the tenants, which is now beginning to develop itself. We think that that is potentially a useful development going forward.
Mr Bacon
Q 39 Could you clarify what you meant by “scale”?
Sir Steve Bullock: The housing co-ops tend to be very small. We are talking about building 15,000 additional units of housing in Lewisham over the next period. They would not be in a position to build anything like those kinds of numbers.
Mr Bacon
The existing housing co-operatives.
Sir Steve Bullock: Yes.
Martin Tett: I represent the LGA, rather than an individual borough, so it is probably better if I defer to Councillor Roe on this.
Philippa Roe: Similarly, we have big regeneration plans in Westminster. Everybody thinks that Westminster is extremely wealthy, but we actually have four of the poorest wards in the country with extreme deprivation in them. We have massive regeneration plans for those areas, but it will be us, the council, driving that regeneration programme. We will work with the housing associations that happen to have properties in those areas, but it will be mainly driven by the council, working with the private sector. Again, we will be building market housing to help fund the whole scheme, intermediate housing and social housing.
Mr Bacon
Q 42 Given that there is a lot of concern about right to buy, I am puzzled why authorities that wanted to protect affordable housing would not use the housing co-operative route as an obvious exemption. It is certainly obvious from international evidence that it can be done at scale using housing co-operatives.
Philippa Roe: It has crossed our minds as a route that one could look at.
Mr Bacon
You might want to look at Berlin.
Phil Glanville: Returning to what Mayor Bullock said about scale, it is the scalability of the housing co-ops that exist in London that makes it challenging. We are looking at working with, say, the almshouse movement to build new, affordable homes that are also exempt because people are beneficiaries rather than tenants. Where we can innovate on our land, we will do so, but the scale of the crisis in terms of the thousands of homes that we need to build makes it difficult to use the co-op movement as it is currently constituted.
Kevin Hollinrake
Q 43 The National Audit Office recently produced a report saying that some local authorities had reduced their budgets for planning and their planning departments by up to 50%. The Bill contains a number of changes that should expedite the planning process. Will this mean that authorities are more likely to staff up their planning departments with the right number of competent people to be able to turn round applications?
Philippa Roe: The absolute key to having the right staffing within our planning departments is to be able to charge a fee that covers the cost of expediting the planning process. At the moment, we cannot charge anything like enough to cover that cost, so basically our council tax payer is subsidising the developers. We are very lucky in Westminster, because of where we are. We have a Westminster Property Association, which funds six planners, to whom its members have access. We can pay appropriate salaries to attract good people, but they are limited to the Westminster Property Association members. I think other local authorities struggle, as we struggle with the rest of our planning applications. As was mentioned earlier, our good people who have Westminster experience are very valuable in the private sector, and they are being hoovered up. We cannot keep them unless we can pay them the appropriate salaries. We really need planning fees to be raised.
Martin Tett: I completely support Councillor Roe on this. There is an almost universal plea from local authorities, whatever their political complexion, that they be allowed to recoup the costs of planning with appropriate planning fees. That would do a great deal to help us to resource up. I also re-echo the point that some of the salaries that the private sector pays good, experienced planners are very high compared with what local government can pay. It is a real challenge.
Kevin Hollinrake
Q 44 But would you accept that cutting a planning department’s budget is a false economy?
Martin Tett: I want to echo one thing, to put it in context. Remember that lots of authorities, particularly municipal boroughs, have responsibilities that also include social care for children, safeguarding adults and so on, and almost universally those statutory responsibilities are growing as a proportion of total council budgets, so councils are in a very difficult position. I understand your point, but we have to weigh that against some of the other responsibilities that councils have.
Sir Steve Bullock: I was going to say exactly the same thing. The funding stream that goes into the planning department comes out of the same pot as social care, libraries, youth services and so on.
Brandon Lewis
Q 45 Councillor Glanville, to take you back to your earlier remarks, can you clarify something for me? I think you said that you have recently been able to negotiate down to—did you say 10% of affordable housing? You linked that to starter homes. Can you clarify exactly what you were saying?
Phil Glanville: I think that close to 10% of the Mount Pleasant sites on the border between Islington and Camden—the Royal Mail redevelopment—are affordable.
Brandon Lewis
Q 46 How does that link to starter homes, which have not actually come in yet? I am struggling with why you were linking a scheme that you are negotiating at around 10% with a policy that has not actually come into force yet.
Phil Glanville: Well, the developers work to the viability principles that are set out by the GLA.
Brandon Lewis
Q 47 I am trying to understand how that links to starter homes, which are not yet in force.
Phil Glanville: I think the starter homes will be seen as the first port of call when it comes to the delivery of affordable housing.
Brandon Lewis
Q 48 Right. Just to clarify, the local authority’s negotiation to 10% has nothing to do with the starter homes policy, because that policy is not in place yet.
Phil Glanville: No, but I fear for the future.
Brandon Lewis
Q 49 You also said that you want to build on a lot of the land that you, as a local authority, own. How much land have you got and not built on yet?
Phil Glanville: I do not have that figure in front of me, Minister.
Brandon Lewis
Q 50 Why have you not started building programmes on that land already?
Phil Glanville: We are building 3,000 homes on 18 sites, which is the largest development programme in inner London, and we are looking at a further 15 sites that we hope to develop on-site before 2018. We are making good use of our right-to-buy receipts, which we do not have to return to Government. We are doing all we can to develop new homes on our land within the housing revenue account cap. Once we have been through those sites and built that capacity, we will look at innovating, whether with almshouses, co-ops or housing associations. We are very ambitious about building new homes on our land. As I say, we have one of the largest development programmes in the capital.
Brandon Lewis
Q 51 I have been to see things such as City Mills, which is a really good example of great regeneration work that is bringing back more density. You talked about the HRA cap. How big a cap do you need? What extra capacity do you need in your HRA?
Phil Glanville: We have £168 million, and we have had some recent extensions, which obviously I welcome, from DCLG. It is about having flexibility. Nobody wants to go out and borrow £200 million, £300 million or £400 million, but the way the deals are structured means that to get the best value for the council, you often front-load the development costs to get the best value out of the development. That means that you need more flexibility around the cap, so you can have negotiated periods in which you can exceed the cap for two or three years and then come back down below it. All these schemes would need prudential borrowing requirements and proper financial management—they would not be signed off by the relevant council officers if they did not. A process, even where we had to go to the Secretary of State for that kind of permission, would be useful. I do not think anyone wants to run up the national debt, but the point is to have the flexibility to ensure that the development we need gets off the ground.
Brandon Lewis
Q 52 Are you using your un-ring-fenced reserves for this kind of work or just relying on the HRA?
Phil Glanville: We are looking at using the general fund to fund some of the private homes in those developments.
Brandon Lewis
Q 53 So with your current programmes, you have had an increase in building of over 60% since 2010, which is really good. We want to see more homes, and it is particularly good to see that kind of increase in supply. I assume from your earlier comment, that you also support housing supply and home ownership. Bearing in mind we are rebuilding—the reality is that we dropped below 200,000 first-time buyers in 2009; the figure is back to double what it was then, but we want to see that go further, so that more people have the chance to own their own home—surely starter homes have an important part to play in that. I emphasise, as I think Rick Blakeway did earlier, that there is a difference between the price and cap. I appreciate we all want to see houses below that price, but surely creating affordable homes for first-time buyers is quite an important part of the mix.
Phil Glanville: They could be part of the mix. The challenge of meeting the aspiration for home ownership is whether starter homes are truly affordable in boroughs such as Hackney and inner London where incomes are around £40,000 and below. That can work in shared ownership at the moment within the borough. We are building 500 shared ownership ourselves, because we want to meet that aspiration for low-cost home ownership.
The challenge is where the affordability is. The reality is also that, whether shared ownership or other forms of low-cost ownership like Pocket, they are there in perpetuity, whereas with the starter home discount only the initial purchaser benefits from it and is locked in for five years. That is also a challenge when we go back to the planning process and communities and social mix.
One of the things the planning process is there to do is to ensure that we have a mixed community and development—to have people like “them”, I suppose, in context. When people protest against new development, they often say, “My sons and daughters couldn’t purchase a home there.” The challenge is that, because starter homes come in before other forms of affordable housing, we will not see local people being able to afford to buy them. They will just be on the London market. The need is there, but I think we need to have another look at starter homes.
Brandon Lewis
Q 54 So to an extent, you would agree with what Rick Blakeway said—that they are an important part of a mix. Do you want to see a mix?
Phil Glanville: I just want to see a truly affordable mix, yes.
Brandon Lewis
Q 55 Councillor Tett, on a completely different topic and just taking the LGA—we have become very London-focused in the last half an hour.
Martin Tett: I hadn’t noticed.
Brandon Lewis
Q 56 I appreciate you sit on a county council, having visited you a few times in Buckinghamshire. Looking at part 6 of the Bill on neighbourhood planning, you have a number of areas in your county going through a neighbourhood plan process or which already have the plans. Some 1,600 or so are going through across the country. In terms of giving more flexibility, ease and speed to that process of creating the plans, do you think this could potentially play quite a big part in making sure that communities are more supportive of local development, where they feel they have that control? One of the challenges behind neighbourhood planning is that, like local plans, it is time-consuming. Do you think speeding up the process across local government and more importantly in the communities themselves will be welcomed?
Martin Tett: Are we supportive of neighbourhood planning? Absolutely. There is an enormous advantage in allowing local communities to shape the future of their own area, be they villages or towns; not just in terms of housing, but in terms of the style and architecture and where the facilities are based. We have seen significant engagement across the country where neighbourhood planning has been introduced.
One of the issues that arises is that sometimes neighbourhood planning runs ahead of the other local plan, for example, in district councils in rural areas. We have a number of examples where neighbourhood plans are in place but there is no local plan for the surrounding district, so they lack the overall planning context of how many houses the area will have. They may face the disappointment that, in the future, they have to effectively redo their plan because the housing numbers are significantly higher than were originally anticipated. Certainly in terms of community engagement, they have been successful. From the point of view of Buckinghamshire and from talking with other county leaders, I think neighbourhood plans have gained a lot of traction across the country.
Brandon Lewis
Q 57 If we are able to get the neighbourhood plans simpler and a bit quicker to get through for communities, but with links to areas that have a local plan, do you think that that proper, joined-up approach for community engagement and for ultimately delivering the housing we need would be welcomed by the local authorities?
Martin Tett: I am just trying to make sure that I fully understood your question. In terms of speeding up the delivery of local plans, we welcome anything that makes the local planning process simpler. We still believe that democratic accountability in local planning is important. That is what gets the local community buy-in to the ultimate adoption of local plans. Not in every case will the local community be fully supportive of a local plan, but if it is seen to be the local councillors they voted for who can explain to them why something has been done and why it is necessary, by and large you will get more acceptance than, for example, if there were, in extremis, a Government inspector appointed from Bristol who comes in and effectively writes the local plan for a community. We would like to ensure that local communities and local councillors effectively remain in the driving seats in developing local plans for their areas and that neighbourhood planning fits within the context of an overall local plan adopted by a council.
The Chair
Minister, can I be rude enough to say that with an eye on the clock, I want to hear from Roberta Blackman-Woods?
Dr Blackman-Woods
Q 58 I was struck by your opening remarks, where you all talked about having infrastructure to support housing development and building housing in communities. I wonder whether you think the Bill should do more to address the need for infrastructure and what you think about the provisions that could exempt some starter home sites from paying CIL. Would you like to see that amended?
Sir Steve Bullock: One of the things that will be important is that the Bill does not get in the way—this will largely be around the exemptions—of some of the big and complex schemes that we are doing. Those are, in effect, sweating land that is already there and intensifying the development. Some of that takes time and there are risks that we need to avoid. If the number of leaseholders on a development goes up and you are planning a comprehensive regeneration, you can make it unviable. It is those kinds of things. Crucially, working across Departments will be important. I am not sure whether the Bill can help that, but we need to be sure that it does not hinder that.
Martin Tett: I will comment on the generality. I mentioned the importance of infrastructure at the beginning. When I go to public meetings, it is the big topic raised by local communities whenever a development is talked about, and it is obviously significant when you have a major development of many hundred houses. There is also the cumulative impact of lots of small infill developments. People tend to ignore the impact of 10 or 15 houses, but if you have lots of them, particularly where large houses are being redeveloped in rural areas, you can cumulatively have a significant impact. People see the difference in their commute, their journeys and so on. There is a large impact in the south-east, which is already densely populated and seeing significant housing growth. The need to address the issue of adequate contributions towards local infrastructure is fundamental.
Philippa Roe: Some parts of the Bill are still being ironed out and discussed, such as those relating to who has which powers between the Mayor and the London boroughs. It is absolutely vital that any housing development regeneration is driven by the boroughs, because they have a far better understanding of the infrastructure impacts in their local areas. I just cannot see how a top-down approach, given how diverse the 33 boroughs are, can work in that holistic approach.
Phil Glanville: The 20% discount for starter homes is probably not enough to be offset in terms of the community infrastructure requirements. There is an element that some of that is local decision making. We decided to exempt the Woodberry Down regeneration from CIL, because of the challenges of the infrastructure: building the new schools, delivering the employment opportunities and delivering the public realm. You need flexibility at a local level to make some of those decisions, but I am not sure that the 20% discount warrants a full exemption.
Matthew Pennycook
Q 59 There is broad agreement that we need to increase supply, but as you said, Councillor Glanville, affordability is key. There is no statutory definition of affordability, and the Bill gives the impression that the working definition is 80% of market rent. Do you think there is an opportunity here to define what we mean by affordable?
Philippa Roe: No, I think that would be too prescriptive. The definition of affordable is up to 80% of market. That is absolutely crucial because it will be different in different boroughs. Each borough has different needs. For example, in Westminster about a quarter of housing stock is social housing; about 1% or 1.5% is affordable for that next tier of low to middle-income workers, and the rest is very expensive, either to rent or to buy.
Our real gap is that intermediate. Our businesses are telling us that that is a real gap. All the supermarket shelf-stackers, people working in our restaurants and theatres and so on, need homes where they can commute at a reasonable cost and time. That is Westminster and we are quite different from perhaps an outer London borough or Tower Hamlets or, indeed, some of the boroughs round the table. As long as we have the flexibility of up to 80%, given as the definition of affordable, then each borough can do it appropriately for their area.
The Chair
Without being impolite to the other witnesses, I fear that we have come to 10.45 am, which is the end of our allotted time for the session. Thank you very much to all four of our witnesses for their extremely useful and interesting evidence. I ask the next panel to come to the floor.
If there is anything members of this panel want to say and have not had an opportunity to say, we welcome written evidence at a later stage.
Examination of Witnesses
The Chair
Q 60 This is the final session of the morning, running to 11.25 am, when I will cut us off quickly. I welcome our final panel, Mr Orr and Ms Butters. Will you kindly introduce yourselves for the sake of the record?
David Orr: I am David Orr, chief executive of the National Housing Federation.
Sinéad Butters: I am Sinéad Butters, chief executive of the Aspire Group, but today I am chair of PlaceShapers and represent the views of 116 local community-based housing associations across the country.
Matthew Pennycook
Q 61 Mr Orr, regarding the voluntary agreement that you came to with Government over the right to buy, many housing associations voted no, many were unable to convene their boards and come to a decision, yet clause 58 of the Bill brings them within the remit of a compliance mechanism under the home ownership criteria. What options do those housing associations have, given that this will be a statutory measure imposed on them?
David Orr: That is an interestingly framed question. The offer that we put to our members and then to Government was a voluntary deal on the right to buy that would cover the whole sector. Everyone who voted, even the small number who voted no, understood that what we were crafting was an offer that included the whole sector. Indeed, quite a number of the individual responses that we got from people who said no none the less said, “We understand that if the overall result is yes, we will be involved.”
Matthew Pennycook
Q 62 And those that did not have time to reply?
David Orr: In overall terms, that was a relatively small number. We have continued to have conversations with those organisations, as we have with all of our members. People had the opportunity to take part in that vote; they expressed their views; many of those who voted yes had reservations that they described to us; some of those who voted no said that they could see some value in it. None of this was easy and straightforward. We have continued to be in regular contact with all of our members about the implications. We will be working with Government and others on a piece of work to craft more of the detail that follows from the deal.
Matthew Pennycook
Q 63 Following on from that, there are lots of areas of the Bill where we await further regulations and statutory instruments. What would be the sector’s reaction if the Government did not deliver on commitments given under that voluntary deal?
David Orr: I have been asked this question on a number of occasions and my answer is always the same: this is a voluntary deal. If the Government, for whatever reason, fail to meet the commitments that they have agreed to under the deal, the deal falls. If we fail to meet the commitments that we have agreed to under the voluntary deal, the deal falls. I have no expectation that that is going to happen—I think that the core principles that we wrote into the deal will be the basis on which it operates, but if not the deal will fall.
Helen Hayes
Q 64 Some of the housing associations that recently appeared before the Select Committee on Communities and Local Government indicated that they thought the likely impact of this Bill would be fewer homes delivered by housing associations for social and other forms of affordable rent. I wanted to ask both of you, first, what you think the net impact of the Bill will be on housing associations’ delivery of social and other affordable forms of homes for rent and, secondly, whether you fear developers deserting housing associations in favour of delivering starter homes themselves?
Sinéad Butters: Our members have raised significant concerns about the potential erosion of social rented housing as a result of a combination of impacts. That combination includes the pay-to-stay option, the starter homes initiative and, depending on what is replaced under right to buy, the erosion of social housing under right to buy. What I would like to make absolutely clear is that our members collaborated with the Government on the home ownership options and see home ownership as one part of something—it is not “either/or”, it is an “and” for our members.
The impact on the future for social rented housing prompts the question, where will the poorest live? If there is nowhere for poor people to live in future, one might imagine that poverty is decreasing, yet I do not see that. It is a very real question. We would ask for the flexibility to have local solutions in the areas where we work closely with local authorities to determine what is needed in that area, including a range of social rented housing, home ownership options, market rent and sale. Our members would embrace the opportunity to work locally to make sure that what the community needs is what the community gets.
David Orr: The Bill itself is a relatively small part of a combined package. If we are going to build a whole lot of new homes we need land first and foremost. Anything that this Bill can do to help to release land for new home building would be helpful. Like Sinéad, I have anxieties about the competing priorities in the space where section 106 presently operates. It has been a useful mechanism for delivering affordable homes for rent and for shared ownership, and a useful mechanism for volume developers to front-end the cash for their developments. If all these things are squeezed out by starter homes, the impact is likely to be a reduction in the overall supply. If we are able, as Sinéad has said, to have an environment where we see significant growth in new home building across all tenures—some for market sale, market rent, social rent, shared ownership, starter homes—that is where we need to be. We need to have this mixed-tenure package. The new homes that we build need to be across all tenures.
With regard specifically to the ability to provide social rent, I think that the Government have made it clear that they do not consider social rent to be their top priority. It remains the top priority for housing associations. The spending review will obviously be an important component, depending on what money, if any, is available to support that. Right to buy, certainly in some markets, has the potential to liberate assets that would then be turned to cash and could be used to build social rented homes. That will vary according to the different markets in different parts of the country. There is a range of factors that will influence this, but I am anxious about starter homes appearing in the section 106 space and crowding everything else out.
Kevin Hollinrake
Q 65 I also sat through the Select Committee hearing, and listened to the evidence from the housing associations. I took the absolutely opposite view, so perhaps we should review the evidence together.
In an article on your website, Mr Orr, under the heading, “More homes to rent (and buy)”, you state that,
“our offer to the government will see an increase in the number of…homes built, which has the potential to ease pressure in all parts of the market, including the rental market.”
Do you still stand by that in the overall context of this agreement?
David Orr: I completely stand by that being the offer that housing associations want to be able to deliver. We published a document called “An ambition to deliver” and I commend it to you, because it is a very strong statement of ambition about getting—at some point in the future—to a position where we are able to build perhaps 120,000 homes a year, half for sale and half for rent, half market value and half subsidised. That is exactly that: making a contribution across all parts of the market. We are completely committed to doing that. Ideally we would want to be working with Government—whichever Government—and local government to work in partnership to deliver that kind of package.
The most fundamental thing that will make a difference is access to land, both publicly and privately owned land. If you look at the pattern of provision, we have failed dismally to build the number of new homes that we need, particularly in rural England, and part of the reason is that we just say, “There’s no land.” We have kind of given up. We need to stop giving up because there is plenty of land that we could build on. Measures that speed up planning are helpful. Measures that give priority to the expectation of delivery of new homes are helpful. Accessing land is the thing without which the rest will not really work.
Kevin Hollinrake
Q 66 Can you see measures in the Bill that will speed up the planning process?
David Orr: I see measures that have the potential to speed up the planning process.
Dr Blackman-Woods
Q 67 At the moment, it seems as if homes sold under the right to buy will not have to be replaced in the same area. Do you have any concerns that that might lead to further regional disparities in the amount of affordable accommodation available? Would you like to see an amendment that would ensure that they are replaced in the same area?
Sinéad Butters: Our members certainly would. They are concerned about like for like replacements in the same geographical areas. The overriding factor is that local authorities working with their housing association partners can decide on what is appropriate for that community and have the flexibility to apply that. Some of the provisions in the Bill, such as the pay-to-stay provisions, are blunt instruments applied nationally which do not take account of local factors.
We would like to see that. Our members would be keen to ensure that those strong relations with local authorities in helping meeting housing need are maintained.
David Orr: I think this is a matter for individual housing associations and the conversations they have with local government partners and others. If, in any given local authority area, housing associations sell under the right to buy, I think how they are replaced is a matter for them in discussion with their local authority partners. I am not keen to impose unnecessary restrictions. It seems to me that we are under a great deal of pressure. There is much less public money going into new housing and we need to retain as much flexibility as we can. We have to look at the objectives and the pattern of behaviour of housing associations across the country. They mainly want to invest in the areas that they work in. That is what they care about, right across the country. I am anxious that we are creating a debate that will not turn into anything in real life because, in practice, if people sell they will want to try to replace in those areas where they can.
Dr Blackman-Woods
Q 68 I might come back to that later if there is time. I wanted to move on very briefly to the pay-to-stay provisions, because you mentioned them. I wonder how workable you think the provisions in the Bill are and whether, as a result of pay-to-stay, some of your tenants will not only have to pay a higher rent, but be able to claim housing benefit. Is that an economically competent set of proposals?
Sinéad Butters: We have case studies and examples that demonstrate just that: people who are at the margins of the £30,000 for a variety of reasons—bear in mind that that is two working adults outside London earning £15,000 a year—are judged to be able to pay a market rent. It is of significant concern to me and to our members when people are at the edges. The case studies indicate that some working-age adults in those particular circumstances would find that a disincentive to work or to gain promotion or to take on extra hours. That is why we are really concerned about the one-size-fits-all figure.
While we recognise that people who could pay more for a product should be able to, we can make those choices locally, but the blunt instrument of £30,000 outside London is really going to act as a disincentive. We have a number of examples of people who are, say, on zero-hours contracts or in part-time work where it would not be in their interests to take a promotion, because they would not be able to afford their rent.
David Orr: I think pay-to-stay is wrong in principle. Government should not be setting rents for housing associations, and personally I believe that Government should not be setting rents for local authorities either. Accountable boards and accountable local authorities should set the rents that they think are appropriate for their organisations, their neighbourhoods and their tenants.
The challenges we recently encountered with the Office for National Statistics and the classification decision all make it more difficult for housing associations to operate independently. I am very pleased that the Government said that they wish to see housing associations be independent bodies in classification terms. We should not be taking measures where Government tell; we should have measures where Government enable.
This is an absolutely clear case in point. For some housing associations, pay-to-stay, externally imposed, will be an administrative nightmare that will end up costing a huge amount of money and have an adverse impact on the day-to-day relationships with tenants. In an environment where housing associations had a much broader ability to set their own rents, they could think more strategically about markets, neighbourhoods and places where you would charge higher rents and where you would charge lower rents, and that is where we have to get to.
The Chair
You have sparked a great deal of interest and quite a lot of people are catching my eye, so may I ask for both questions and answers to be as crisp as possible in the 20 minutes left?
Mr Jackson
Q 69 May I ask you, Ms Butters, to restate your specific opposition to pay-to-stay? It seems that you might be overlooking fairness and social equity issues and the release of funds that the policy may very well give rise to. London aside, I would contend that £30,000 is significantly above an average wage in somewhere such as Stoke-on-Trent or Newcastle-under-Lyme or several other parts of your area. Therefore, apart from the administrative, bureaucratic issues that Mr Orr mentioned, on what basis do you oppose the policy?
Sinéad Butters: There are two reasons. One is the need for local housing providers to be able to make judgments about what their area needs and to reflect the points you made about affordability. An imposed national figure of £30,000 will not take account of local need and local incomes.
In Stoke, 38% of the working adult population earns £16,000, so two adults together would be above the £30,000 limit, yet that is a marginal figure for being able to pay a market rent. I accept that market rents in Stoke are low, but in other areas they are not. We had the example of a tenant in Oxfordshire whose particular circumstances could mean that her rent would be tripled from £600 to £1,800. Obviously, there are issues about tapers and how they would apply, but this national approach with a single £30,000 outside of London does not take account of local circumstances, and that is our greatest fear. For me, it is about the ability of housing associations to set rents that are appropriate for that tenant, and the freedoms and flexibilities that the National Housing Federation has talked about. That will mean a range of different choices, working with our local authority partners, on how to pitch and what is right for their area in terms of affordability. This does not allow us that flexibility.
Mr Jackson
Q 70 But you agree that registered providers, with the extra income that may arise from this policy—I do not know whether you have any examples; you mentioned some examples earlier—may have the authority and autonomy to ring-fence for developing other sites for social rented housing.
Sinéad Butters: Absolutely, but the point I am making is that that ability to use the additional receipts should be based upon known local circumstances—local incomes and local affordability—and not set nationally. That would allow flexibility.
David Orr: May I add something here? Rents in our sector are a shambles because of Government intervention in rent-setting for the past 17 years. Decisions that are made for short-term reasons, which do not understand the long-term impact, have created a pattern of rents that is almost incomprehensible to anyone. We would like to be in a position to relocate responsibility where it lies: with the boards of individual housing associations, to provide housing and associated amenities in accordance with their objectives and to be responsible for charging appropriate rents. The rents will be different for different people in different parts of the market. Part of pay-to- stay says, is it sometimes appropriate to charge people higher rents if they have higher incomes? Yes. Is it right for Government to be imposing it? No.
Mr Jackson
Q 71 That is a fair point, Mr Orr, but this is at the beginning of the process and Ministers might surprise you in a pleasant way.
David Orr: Good. I am always happy to be surprised in a pleasant way.
Mr Jackson
Q 72 Far be it from me to speak for the Ministers, but are you really suggesting that registered providers operate in a hermetically sealed bubble, given that the housing benefit bill has spiralled significantly over the past 20 years? The Government surely have a fiscal responsibility to make big strategic decisions in the provision of public housing when they have a spiralling housing benefit bill.
David Orr: The housing benefit bill is spiralling primarily because the number of people who need to claim housing benefit has grown as rents have grown, and because of the number of people in work in the private rented sector who have to claim housing benefit. It is not fundamentally about the growth of rents in the social sector, but, where rents have grown in the social sector, that has been a direct consequence of Government decision making. So I can sit here and say, “It’s not our fault, guv. It’s your responsibility. It’s Government decision making.” I don’t think that is acceptable. I think that local government and the public should be able to hold housing associations to account for the rents that they charge. It has been the case in the past that when the Government were setting rents, they also said that housing benefit would cover the cost of those rents. I am afraid that the decision to set the overall benefit cap at £20,000 and £23,000 means that rents that the Government have themselves set are not now, in a significant number of cases, covered by housing benefit. So if the Government want to limit their exposure by what they do with housing benefit rules, they should withdraw from rent-setting.
Grahame M. Morris (Easington) (Lab)
Q 73 I want to go back to starter homes and the issues that you have touched on. A survey found that 6 million people— 5.84 million, in fact—earn less than the living wage. That is not a TUC figure; it is from KPMG. Some 23% of the labour force earn less than the living wage, and the numbers are going up. There are 750,000 people on zero-hours contracts. What is there in the Bill to address the housing needs of that substantial sector of people who we refer to as the working poor?
David Orr: There is little in the Bill that addresses that group specifically. The only real new housing or tenure product that it contains is the starter home initiative. As a component of a much wider, mixed-tenure, mixed-priced series of developments, starter homes have a role to play, but a comprehensive transfer away from social rent or shared ownership towards starter homes would be a mistake. They have a role to play as part of a broad pattern of provision, but not instead of the other things we are doing.
Seema Kennedy
Q 74 Mr Orr, I want to ask you about affordable housing in rural areas, and the portable discount in particular. Will you expand on that? How do you think it will affect the affordability of housing in rural areas?
David Orr: In the voluntary deal, we have agreed with the Government that in small, rural areas, in most cases, housing associations will almost certainly say no to a request to sell a home that a tenant is currently occupying, but they will have the opportunity to use the portable discount, which I hope will help to stimulate the development of new supply.
The fundamental challenge in rural England is that we need to build more homes, especially ones that are affordable for young families. Rural England is being hollowed out. As the 25-45 population grows in the country at large, it is declining in rural areas, because people cannot afford to live in villages that are often becoming like theme park villages, and that are in danger of becoming mausoleums. How we invest in new supply to keep rural England dynamic is a huge strategic challenge. The portable discount might create some of the financing that will allow that to happen, but we need to take a broad view and say it is time we addressed what is a genuine crisis in rural England.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
Q 75 What is your estimate of the net impact of the Bill on London?
David Orr: I do not have a detailed estimate.
Mr Thomas
Q 77 With respect, the housing associations among your membership must have given you some indication of their view of the Bill’s effect in London.
David Orr: They have. If you assume that over time 5% or 10% of homes might be sold under the right to buy, that will raise very considerable sums that can be invested in new supply. I do not have a statistical analysis to back this up—we can ask our research team and provide further information if we have it—but my view is that it is likely to deliver an increase in both the number of homes built and the number of homes for social rent. Under the existing arrangements, it is very difficult to build for social rent unless you trade, sell and make a profit, and then use that profit to create the subsidy. The voluntary right to buy has the potential to release some of that trapped equity and allow it to be used for building new homes. It is likely that London housing associations will focus on building for social rent, as well as shared ownership and other products.
Kevin Hollinrake
Q 80 Ms Butters, I think you referred to the provisions under clause 74 on high-income social tenants as a blunt instrument, yet you conceded that there is provision to charge a proportion of market rent—I think you made some cursory reference to the taper. Is that not proof that the clause is not a blunt instrument?
Sinéad Butters: For us it is about the freedom and flexibility to set our own rents—decisions for our local areas, made by our boards, working with our communities and our local authority partners. I can understand that the taper has been set to mitigate some of the negative impact of applying that blunt instrument, in terms of an immediate move to market rents from social or affordable rents; however, that would not be my answer. My recommendation would be locally set rents, determined by local areas, with boards and local authority partners. We would still see the potential for those choices about higher-income tenants, but they would be based on real evidence and real income data and analysis, not on a judgment about what level is set nationally.
Kevin Hollinrake
Q 81 But the principle is that it is inappropriate for taxpayers to subsidise someone who can live in market-value housing. Do you accept that principle?
Sinéad Butters: Yes. Absolutely.
Teresa Pearce
Q 82 Mr Orr, on the voluntary deal, your organisation and the G15 will work very closely. It is my understanding that the G15 opposes the forced sale of vacant high-value council homes. Is that the position of the National Housing Federation?
David Orr: Just to be clear, the G15 are all members of the National Housing Federation, so we are all part of the same group, as is PlaceShapers. The deal that we have done with the Government is one that says that if the Government provide funding for a discount we will organise the sales. It is the job of the Government, under that voluntary arrangement, to find the finances to fund that. We have never proposed the sale of high-value council stock as a means of paying for it—that is a proposal that came from the Government—and we have not and will not endorse the proposal.
Teresa Pearce
Q 83 So you are in the same position as the wider federation of the G15?
David Orr: As a wider federation, what we have been trying very clearly to do is to locate the responsibility for the decision where it lies, which is with the Government. It is not a decision for us, and it is not a proposal we have ever sought or have ever endorsed, and we have no plans to do so.
Sinéad Butters: Similarly, we pride ourselves on our strong relations as community-based housing associations, and therefore we do not endorse the sale of high-value council homes in order to fund this.
Maria Caulfield (Lewes) (Con)
Q 84 If I understand it correctly, you both say that you agree that those who earn more should pay more, and I think you have both said that housing associations should have the discretion to set rates, but I understand that there is already provision to set higher rents for those who earn £60,000 or more. How many associations use that provision at the moment and, for those that do not, why not?
David Orr: Very few of them do, partly because there are very few people in those circumstances and partly because housing associations do not always know because they do not have a particular obligation to require that information from their tenants. We do not have very detailed data. Also, it is partly because it is very administratively complex to impose such things.
My view is that we should not think about this in terms of specifically focusing on individual households. We should offer different products at different prices in different parts of the housing market, among which people have the opportunity to choose. Our housing market is not nearly varied enough, and housing associations are an integral part of providing more variety and different pricing in different parts of the market.
I also think that we need to be smarter about how we turn things from a threat into an offer if someone is a tenant of a housing association and their income increases. Rather than pay-to-stay, I would much rather the housing association was in a position to say, “If your income is increasing, we would be happy to sell you a small equity share in the property that you live in.” That has the same effect of providing cash that the housing association can use, and the tenant gets an active benefit from it rather than just paying a higher rent. We have to be much more creative about how we look at all of this and how we change that relationship. In order to do that—to echo what Sinéad was saying—housing associations have to be much more free to run and manage their own businesses. This is a theme that we will be coming to all the time.
Maria Caulfield
Q 85 I agree with you in that sense, but if you are not actually collecting that information, that makes it very hard to gather evidence for that argument. If we really need to target—
David Orr: We don’t need to collect evidence about people’s income if we are making them an offer by saying that if they are in a position to buy an equity share that will gain in value over time, we will provide that for them.
Maria Caulfield
Q 86 Okay, but if we really want social housing to be for those on a lower income, if you are not collecting that information it makes it very difficult to gain support for your argument. You are not collecting information on which of your tenants actually earns that amount in the first place. I find it hard to understand how you have that evidence if you do not collect it yourselves.
David Orr: We presently have no legal basis for requiring that information. We can ask.
Maria Caulfield
Q 87 Hence why it is in the Bill.
David Orr: Well, pay-to-stay is in the Bill. One of the mechanisms that would deliver that is by requiring information to be given—
The Chair
Order. We have four minutes, and four Members are trying to catch my eye. The current point has been explored reasonably well.
Matthew Pennycook
Q 88 Mr Orr, you have clearly given an indication that you would like to see more freedoms around rents. Clause 73 specifies further reductions in regulations to come. What specific freedoms will the National Housing Federation be pressing for?
David Orr: We have said for a long time that housing associations must have much greater freedoms to manage their own assets. We have to change the present disposals consent by which a housing association requires the consent of the regulator to dispose of any building or any asset. I just gave the example of the sale of a £1,000 equity share in a property, which at the moment requires a valuation of the property and a specific disposal consent. That is just completely absurd. We need to remove all that kind of unnecessary bureaucracy, which basically leaves the regulator with a determining say in how an independent social enterprise uses or disposes of the assets that it owns. There are a number of other things which follow from the ONS determination which need to be looked at again, and also the circumstances in which the regulator might be able to intervene at board level. We need to be much clearer about what those relationships are.
Matthew Pennycook
Q 89 And specifics on allocations?
David Orr: I think that we need to have a different approach to nominations and allocations, which is much more about local negotiations between housing associations and local authorities, and then contractual relationships which are potentially subject to change. Housing associations do not want to move away from the business of providing housing for people who are in the greatest housing need, and working with local authority partners to deliver it. However, they do want to be in a position where they can say that if they are charging a rent which is 70% of the market value, they do not think it is appropriate to allocate that to someone who is in the greatest housing need far away from the jobs market, and who will become more trapped in benefit dependency by being offered that product. We need to have greater variation in those local discussions.
Brandon Lewis
Q 90 Very briefly, returning to the first part of the Bill, Mr Thomas made a comment earlier about linking right to buy and starter homes. Mr Orr, bearing in mind that the voluntary agreement means that for every home sold an extra home will be built, do you think that right to buy will lead to a housing supply increase? Within that, do you think that housing associations will be looking to deliver starter homes as part of the mix of housing that they deliver, and will be able to do this?
David Orr: Yes and yes. There will be an increase in supply, which will liberate some presently trapped assets that can be used for building new homes. Housing associations will build some starter homes, and they will build a lot of shared ownership homes. They will build as much social housing for rent as they can, and they will continue to build for market sale and market rent. We are becoming much more pluralist in the offer that we make to the nation.
Sinéad Butters: But—
The Chair
I am sorry, Ms Butters, but we have come to 11.25 am, which is an absolutely sharp cut-off point. I apologise for cutting you off in that way. I thank both our witnesses for their evidence. It has been extremely useful and interesting, and we are most grateful.
Housing and Planning Bill (Second sitting)
(8 years, 6 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text
The Chair
Welcome back to the second evidence session of the Housing and Planning Bill Committee stage. I particularly welcome our three witnesses from the British Property Federation, the Federation of Master Builders and the Home Builders Federation.
Examination of Witnesses
The Chair
Gentlemen, for the record, will you kindly identify yourselves?
Andrew Whitaker: I am Andrew Whitaker, planning director at the Home Builders Federation.
Brian Berry: I am Brian Berry, chief executive of the Federation of Master Builders.
Ian Fletcher: I am Ian Fletcher, director of policy at the British Property Federation.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
Q 9191 It has been suggested that it will be more profitable for developers to build starter homes than other types of affordable housing. Do you think there is a risk that starter homes will crowd out other types of affordable housing on developments? Do you think there should be any exemptions to developments having to provide starter homes, and what would those exemptions be?
The Chair
Answer as you will; just freelance it. You do not all have to answer all questions. Just jump in.
Brian Berry: It will be more profitable for builders to do starter homes; they will get 80% of the market value, compared with other types of tenure where they would have to negotiate section 106 agreements or give the land. On exemptions, you might want to look at very small sites—five or fewer, or even 10 or fewer—because that could affect the viability of small developments coming forward.
Andrew Whitaker: I think it is more of a balanced approach than that. You are looking at providing housing for all sorts of people, right across the housing market. Therefore, hitherto we have focused a little bit too much on social rented housing and full market housing. Therefore, allowing for this more intermediate market to be met—and there is a need for this kind of housing—I think you will see a much more balanced picture across the country with different types of tenure to meet different needs.
Ian Fletcher: To respond to the last part of the question about exemptions, we have a specific issue on the site-specific requirements for starter homes. My life’s work has been trying to get a build-to-rent sector off the ground in the UK where pension fund money is investing in rented accommodation. That is happening. We have just measured and we have about 25,000 units in the pipeline. But a site-specific requirement for starter homes does not really work with build to rent and could kill off that sector before it gets going.
Dr Blackman-Woods
Q 92 It might be useful to have more detail on that specific point but I will move on. In addition to raising queries about the type of property being built, there is nothing about the standards to which the new homes should be built, or improving the quality. Do you think we can rely on developers pushing up the quality of what is delivered?
Andrew Whitaker: Yes, I certainly think you can. You can rely on the building regulations to meet all sorts of requirements for new homes. In terms of urban design, the Home Builders Federation is very keen to promote the building-for-life standards. That will apply just as much to starter homes as to other kinds of house building development.
Brian Berry: I would just add to that. Small builders’ business depends very much on their reputation, so they tend to build quality homes. If they were not building quality homes that met market needs they would be out of business. In that sense, the concerns you may have about quality should be allayed, particularly if you bring in more developers that are small and medium-sized enterprises.
Ian Fletcher: I have no concerns about the quality of the build of the accommodation, for the reasons that colleagues have set out. What makes a housing development is not just the built quality of the housing but the other services—social services, schools and healthcare—that support it. I have some concerns about the relief that could be given on community infrastructure levy contributions and section 106. From where will the infrastructure on those developments be funded?
I want to come back quickly to the build-to-rent point. The reason a site-specific requirement for starter homes does not work for build to rent is that the institutions that invest in that sort of accommodation do so for 10, 20 or 30 years and want to have control over the development to ensure it remains a quality place to live. If you have a specific requirement for some starter homes, they lose control of their investment.
Mr Richard Bacon (South Norfolk) (Con)
I would like to ask Mr Berry about chapter 2 of the Bill, on self-build and custom house building. Specifically, do you think the Bill provides enough motivation for people to be on the self-build register, in terms of linking the presence on the register to decisions about how serviced plots are brought forward and allocated?
Brian Berry: May I start by saying that most of our members think that this is a very encouraging market and support the whole principle of custom build? The Self-build and Custom Housebuilding Act 2015 set up the register for interested people, but we are concerned about how it is coupled with the provisions in the Bill, which seems to water down the obligation to locate plots for people on the register. It suggests that local authorities must ensure that there are sufficient planning permissions, which is rather different. We are concerned that those on the register could be put off even hoping for a plot of land to build on. We would like to see that changed, because 89% of our members say they are interested in looking into this market.
Mr Bacon
Q 93 The Bill provides for exemptions and states that the Secretary of State “may” direct that a local authority is not subject to the duty to give suitable development permissions in respect of enough serviced plots of land to meet local demand. Do you think that is potentially a big let-out clause?
Brian Berry: I think we need to look at the whole exemption side. There is a danger that it will be a let-out clause. Local authorities should be looking at all ways of delivering custom built housing, even if that means looking at existing buildings that could be converted and customised. I share that concern.
Mr Bacon
Q 94 I have a question about the definition of “self-build” and “custom house building”. The Bill rightly excludes plots where the person selling the plot is the person who wholly or mainly decides the plans or specifications. That is obviously to avoid the gaming of the system, but will the definition work in practice?
Brian Berry: That is a good question. We also have concerns about the definition. You obviously want to make it sufficiently encompassing that it does not deter various forms of custom build housing, but you do not want to make it so wide that it includes minor or superficial adjustments to standardised housing. That part of the Bill needs to be looked at in detail to ensure it is clearer.
Mr Bacon
Q 95 So a volume house builder offering a fifth choice of tile colour, rather than just four choices, would not meet your standard.
Brian Berry: Absolutely. That is right.
Andrew Whitaker: We are rather concerned about that, too. A lot of the smaller developers who are members of our federation are very keen to provide what you would imagine to be custom build. The parody that you paint of course should not be allowed, but we think the definition goes a lot further than that and will exclude some genuine custom built products.
Mr Bacon
Q 97 Really? Can you give an example of a custom house building product that would be excluded under the definition?
Andrew Whitaker: If a developer is offering a custom build product—we have members who are doing this—whereby you get to choose, for example, the internal layout of your property, that to our mind would be excluded by the clause, yet that is a perfectly reasonable definition of custom build.
Mr Bacon
Q 98 Why? The specification would then be wholly or mainly determined by the client, would it not?
Andrew Whitaker: No, because you do not have the ultimate choice about the internal arrangement of the house. You get to pick from a range. Not all house types fit within the skin of a particular house.
Mr Bacon
Q 99 The exterior walls are obviously defined, but if the client or customer can decide where the walls and floors go or do not go in the interior, that would be wholly or mainly decided by the client, would it not?
Andrew Whitaker: Not if you were picking from a pattern book, which could be any number of different layouts. How many are you suggesting would not be entitled to be a custom build product—two different choices, or five, or 10? That is not made clear.
Mr Bacon
Q 100 When you say it is a pattern book, that makes it sound like a pattern book offered by the volume house builder. Is that what you are saying?
Andrew Whitaker: Not at all—it is not the volume house builder that is providing this custom build product. It is smaller developers who are offering custom build products. They have been given money from the Department for Communities and Local Government to investigate custom build products. That is precisely what they are doing now. They are concerned that this clause will stop them from doing what they are currently doing, under custom build.
Mr Bacon
Q 101 Is not the whole point of a custom build approach that it is the customer who decides, not what you call a pattern book?
Andrew Whitaker: If you start from the point of saying, “Here is the outer skin of the building and that has been determined for all sorts of good planning or urban design reasons,” what you can put in it is limited. That will be explained to you by the relevant builder.
Mr Bacon
Q 102 It is limited by the laws of physics—yes, I accept that. But other than that, it is not very limited, is it?
Andrew Whitaker: Very, yes. The developer will say, “Right, you can choose from 10 different internal floor types.” That is what I am saying. Well—does that meet your definition? We do not think that it does.
Mr Bacon
Q 103 I have one more question, Mr Whitaker. You were talking earlier about quality. The new nationally described space standards are currently guidance. Do you think they should be building regulations?
Andrew Whitaker: We do not think they should be building regulations. We think that all the national regulations do is set out guidance for people so that, locally, they can determine whether they need them. Therefore they would have to provide evidence as to why they wanted to see bigger houses built in their area and why they were applying the national standard. If people are already proposing houses that meet the national standard, there is no need to have that national standard.
Mr Bacon
Q 104 Mr Berry, do you think it would be helpful if space standards were turned into building regulations, so that there was a minimum to which builders had to adhere?
Brian Berry: Not necessarily, because we do not want extra layers of regulatory requirements on SMEs who are already struggling in terms of access to the market. I understand the concern you raise, because people have talked about space standards and the fact that houses are getting smaller. That probably reflects the state of the housing market in this country, though, where we are struggling to deliver the number of homes that are required because of certain barriers that need to be addressed. There are other issues, therefore—one of which is to get more SMEs back into the market, which might overcome this and deliver the homes that are required in terms of supply and demand.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
Q 105 I have two questions, if I may. First, many people who are likely to access starter homes are likely to be in a position to buy in any case. Do you think the Bill as it stands will widen the pool of potential home buyers?
Brian Berry: I would have thought that it would. We know that 86% of people in this country aspire to owning their own home. Owner-occupation levels have dropped over the last 10 years. We support owner-occupation and this is a means to encourage more people to get on the housing ladder. We feel that this is another leg up for people, when prices are moving year on year. Yes, I conclude that it is positive.
Matthew Pennycook
Q 106 In terms of general supply and building, can you explain why you think this will deliver additional homes? Will it do anything to deliver and build out the 200,000-plus permissions that already exist?
Andrew Whitaker: Certainly it will create a different market. That will therefore increase the overall supply of houses, because you are targeting a different market. As Mr Berry says, you are focusing on specific areas of the market and that will open it up to new people. We would be concerned if all you were doing was robbing Peter to pay Paul. We would stress that this must open up new markets.
In terms of building out the existing permissions, that is a far more difficult picture. We do not envisage a lot of people going back round the planning system to put starter homes in their existing planning permissions. We see this probably as going forward. In terms of building out the permissions that people have already got, that is normally subject to the market rate for that particular area. Therefore, if you follow the logic of my first statement that we would want to see this hit different markets, then yes, it will mean that people can build out permissions going forward at a faster rate, because they will be targeting more sectors of the market.
Ian Fletcher: My view would be that we cannot look at the Bill in isolation from wider Government policy on housing. I think that starter homes may get existing players to build more homes. However, when you are looking at extending capacity of the house building sector as a whole, things like build to rent, which we are promoting, are doing that.
Your second point was around—
Mr Stewart Jackson (Peterborough) (Con)
Q 107 I remember my question. Mr Fletcher, first, may I thank you and the British Property Federation for your helpful—and brief—brief on the Bill? Can I challenge you about the demonstrable evidence that supports your assertion? I think you said that the starter homes policy will kill off build to rent. Where is the evidential basis that that will happen? If you have a multi-tenure site in a good location with good transport links and otherwise reasonably good infrastructure, why would investors not wish to invest in long-term residential letting? I do not understand how the introduction of starter homes will drastically affect that or make it unviable as a business proposition.
Ian Fletcher: The build-to-rent sector mainly seeks to build at scale, so it will be building 100-plus units and the investors, who include most of the big pension fund companies and investors from abroad—we represent most of them—are adamant that they will not invest in broken blocks; they want to keep control of their products. Many of them are introducing new concepts to the private rented sector in the UK in terms of branding and so on, and once you lose control of a part of your development you cannot get that back and you do not know where it will go. An individual may buy a starter home and sell it after five years into the buy-to-let market, so you cannot keep control of that development.
Mr Jackson
Q 108 Are you asking us to believe the premise that they are happier with a residential development of, say, 45% pure social rented housing and the other 55% being build to rent?
Ian Fletcher: Their ideal scenario, which is just being implemented as supplementary planning guidance in London, would be that the affordable offer would be discounted market rent. That works well in terms of being managed as a whole.
Mr Jackson
So affordable rent.
Ian Fletcher: Discounted market rent: it is an intermediate rent rather than the lower, social rents.
Mr Jackson
Q 109 What is the quantum difference between that and a starter home, which is a discounted, effectively intermediate property?
Ian Fletcher: It is the issue I iterated, which is the ability to control and manage the thing as a whole.
Mr Jackson
Q 110 What do you mean by “manage”?
Ian Fletcher: If you have a block of flats, that has to be managed on a daily basis. It will have a concierge and the common parts will be kept by the manager of the property. The feel of the property can be managed only as a whole, as the members wish.
Mr Jackson
Q 111 The legislation covers urban extensions and new build in the planning envelope of small towns. It is not just about flats in central London.
Ian Fletcher: Clearly on a large, strategic land site—I can think of a particular member that has two or three such sites in the south-east—having some starter homes in one corner and a build-to-rent development in the other is no problem.
The Minister for Housing and Planning (Brandon Lewis)
Q 112 Mr Fletcher, I assume that you are talking about developments such as the multi-family housing we see elsewhere in the world. I understand the point you are making. In that situation, I assume that the developers, knowing that they have to do their bit for the community as negotiated on affordable housing, would look to do what we see elsewhere: if they can make a case for an apartment block, for example, they might provide affordable housing or starter homes on a different site but in that area with the local authority.
Ian Fletcher: Absolutely, Minister. I said in my first remarks, I think, that I was talking specifically about the on-site requirement. I have no qualms about the other part of the Bill, which is about the duty of local authorities to provide starter homes.
Mr Jackson
Q 113 On paragraph 14 of your briefing—I am sure members have copies—about automatic planning permission, you make the case that this should move on from simply residential housing to multi-use sites, including leisure, retail, industrial, etc. How would that work? Surely that would be an overly permissive regime—to have that in the Bill and extend what is essentially a welcome proposal to drive the number of houses up to a free-for-all, having every economic activity on a brownfield site?
Ian Fletcher: That part of our brief is trying to express a concern that the permission that is granted in advance on the brownfield sites will drive a lot of those sites into housing use. That is, therefore, a concern in terms of ensuring that we have a balanced economy. We have evidence that illustrates that about 50%, I think, of local authorities and local plans are out of date with respect to things such as industrial uses. The local authorities that are particularly out of date are some of the places you would most expect to have expansion of industrial use places, such as the Thames valley and the northern powerhouse. We are just expressing a concern that this policy might drive more brownfield land into housing use at the expense of other uses.
Mr Jackson
Q 114 But this Bill addresses those issues in terms of the discretion that the Secretary of State has for intervening directly in adopted development plans.
Ian Fletcher: And we very much support that.
Helen Hayes (Dulwich and West Norwood) (Lab)
Q 115 Just returning to section 106, at the moment that section makes a very important contribution to delivering social housing for rent, school places, high-quality green space, GP practices and so on. With the starter home obligation, to what extent do you think house builders will still be happy to make those contributions to creating successful communities where you are delivering new homes?
Andrew Whitaker: I think those contributions have to be proportionate to the development and, therefore, excluding an element from the community infrastructure levy does not exclude them from site-specific section 106 requirements. Overall, developers will continue to pay planning obligations towards social infrastructure, even with the starter home obligation. On brownfield sites of around 100% starter homes, I think we then struggle a little to see the overall contribution to the cumulative impact of development, which is of course supposed to be addressed by the community infrastructure levy. That takes some sites out of their fair contribution towards that and we have some concerns about that. The problem is, you have to do something to make those sites viable for residential development with their 20% discount and that is one of the few things you can do to ensure that those sites are still viable.
Ian Fletcher: I am sympathetic to the points that Andrew was making. I would just add that we have a comprehensive spending review coming up, and if those brownfield sites are going to work and are going to be great places to live, there needs to be some way of supporting that social infrastructure. If it is not coming from the developer then it has to come from other sources.
Helen Hayes
Q 116 If I may, I wanted to ask about permission in principle. The Minister came to the Communities and Local Government Committee yesterday and said that his understanding of permission in principle is that it is simply a site that has been agreed by the local authority that will have permission for housing. Could you explain to me, from the industry perspective, what is the value of that? How does it give you any more certainty and any more leverage with your lenders than a site allocation, on the basis of which a local authority could still not turn down an application on a matter of principle without losing an appeal?
Brian Berry: I think it is particularly attractive to small builders, because getting the permission in principle at the beginning gives them the confidence actually to bring the application forward. It also means they are not having to spend large sums of money on providing technical details at the first stage. That, as I understand it in the Bill, is removed into the technical consent part. Turning it into two parts and getting the permission in principle at the beginning will, I think, bring forward more applications from smaller builders, and it does not pose any risk in terms of discussing the merits of the scheme because that will be in the second part. This is a welcome development and very similar to the redline application route endorsed in the Lyons review.
Andrew Whitaker: I would like to share your optimism that an allocation in a local plan would mean that you did not have to argue the principle of development on that site when making a planning application. Unfortunately, I can point you to many, many examples of where the principle of development gets discussed at length even for an allocated site. I think what this will do is ensure that local authorities, when allocating sites, do a lot more due diligence about whether they are committed to bringing that site forward for development. If we never need to make an application for permission in principle, that will be fantastic, because it will mean that local authorities become more committed to the delivery of the sites that are in their local plan.
Kevin Hollinrake (Thirsk and Malton) (Con)
Q 117 This Bill, taken in the round, is designed to tackle the fundamental problem in the housing market, which is lack of supply. And the lack of supply is partly about who is going to build the houses of the future. I am thinking particularly of SMEs, Mr Berry. SME house builders used to build about 100,000 homes a year in the UK. I think that at the moment they are building about 18,000 homes every year. Is there enough in the Bill to help SME house builders?
Brian Berry: You are absolutely right. The number of house builders has declined rapidly over the last 25 years. In 1988, two thirds of all new homes were built by SMEs; that fell to 30% last year. There is a desperate need to get more SMEs into the market if we are to deliver those homes. The challenge, of course, is that there are barriers to SMEs coming into the market. Those barriers fall outside the scope of this Bill, but access to finance remains a concern for SMEs—62% of our members say it is a barrier to bringing forward developments—so it would be useful if the Government considered some form of help to build, perhaps underwriting homes. That would be very beneficial.
The other key issue that affects the house building sector is the growing skills crisis and how we are to address that, because if we do not have the skilled labour, we are going to have a serious problem. It is already an issue. We know this from our own surveys: 60% of our members are having problems recruiting bricklayers, and 50% are having problems recruiting carpenters. It is right across the board. There are a number of issues that are outside the scope of the Bill, but that are absolutely fundamental to delivering the number of homes required and that we all need to work with Government on.
Peter Dowd (Bootle) (Lab)
Q 118 Could I get a clarification from Mr Fletcher? I think you referred to the issue of local authority plans being out of date with regard to industrial use.
Ian Fletcher: That is a recent piece of work by one of the big planning consultants, Turley, which has looked at the evidence base that local authorities are using. More than 50% are pre the introduction of the national planning policy framework. Significant periods of time have passed and significant changes in policy have passed since they put their evidence base together on their requirements for industrial land.
Peter Dowd
Q 119 In relation to brownfield sites, do you have any estimates of the volume of brownfield land that would be viable for housing development?
Brian Berry: I’m afraid we don’t.
Ian Fletcher: You caveated your question with the word “viable”, and I think that that is wise. I have seen estimates that you could build as much as 1 million homes on brownfield sites in the UK, but they have to be viable; they have to be connected. Some brownfield sites actually have very good ecology and should be left as brownfield. That 1 million is hypothetical and it is not necessarily real.
Andrew Whitaker: I would not underestimate how much of that brownfield land is already coming forward for residential development. Over half of the figure of 1 million which is often touted is already within the planning system, and it is already either allocated or being developed for housing. The house building industry does already prioritise brownfield development.
Peter Dowd
Q 120 There is an argument that because local authorities are being pushed in relation to the national policy framework, they are putting sites into the planning framework which are not necessarily viable in relation to brownfield. Is that not the case?
Andrew Whitaker: That is our fear. Encouraging them to maintain a register is certainly a great idea in theory. Being able to pinpoint the land you want to see being brought forward for development is an excellent idea. However, if enough work is not done in terms of viability, then the amount of land which could come forward and which is viable, as Ian said, could be overemphasised or over-egged.
Peter Dowd
Q 121 I have one more question on that. Do you have any idea at all of the cost of the remediation of brownfield sites nationally that you as a developer would not want to pay for, or that developers would not want to pay for?
Andrew Whitaker: No. I think that is a bit like asking us how long a piece of string is. Every single site differs in terms of the amount of money needed to make it viable. That is not just in terms of the actual viability of ensuring the land is developable, but in terms of meeting the landowner’s requirements for the price of the site, meeting the developer’s requirements for the profit element on the site, and meeting the planning obligations on that site to make sure that the infrastructure is provided. That differs on a site by site basis. Over the last few years, where viability has become more of an issue in planning and local plans, we have found that making these decisions on a generic basis invariably does not allow for the massive fluctuation in site-by-site assessment.
Chris Philp (Croydon South) (Con)
Q 122 I would like to continue this line of inquiry in relation to permission in principle and the brownfield register. To get straight to the heart of this, I ask each member of the panel to comment on whether they think that those measures would increase, decrease or have no effect on the number of housing starts we see in our country.
Brian Berry: I think the new consent of permission in principle is a forward step. That will help to bring forward more SME applications. The brownfield register is a positive step, because there are very small parcels of land which our members could build on. Having that transparency will be a help. That would encourage more development.
Chris Philp
Q 123 Okay. So you think it will be a net positive?
Brian Berry: I do.
Ian Fletcher: I think both measures will make a positive contribution. The most advanced register in the UK is the effort of the Mayor of London, and the power in the register is not in the register itself but in the Minister sitting round the table with the public authorities and the advisers to discuss what can be done with this particular land and then getting it into use. A Domesday Book of land in itself is only half of the effort. It is what is done with it that is important.
Chris Philp
Q 124 I am going to come back to that in a moment. Mr Whitaker, do you think that these measures will increase supply, decrease supply, or have no effect?
Andrew Whitaker: They will definitely increase supply, because this is a positive step towards finding the sites that local authorities actually want to see developed. As Mr Berry said, that will make it easier for SMEs, which want to enter the market, because they will know very clearly that they will get planning permission on those sites.
Chris Philp
Q 125 Good. I am delighted that there is unanimous agreement on the panel that these are positive measures that will increase supply. Let me return to the point that Mr Fletcher touched on. In relation to London in particular, the London Land Commission has had power over specifically Government-related land and has had some measure of success, particularly with Greater London Authority land. Perhaps you would comment on whether there is any opportunity to go further in terms of how the state goes about bringing forward its own land—for example, the 6,000 acres owned by Transport for London—and what specific measures you believe might encourage that to happen.
Ian Fletcher: In the case of our sector, some things that get in the way are best value and best consideration rules, which are written for a model of housing that we have had for the past 30 years, which is that you build for sale and then you contribute an element of social housing. When you are doing a build-to-rent development, which is some- thing new to local authorities, they are very cautious about whether they are getting best value or best consideration. That would be a help. I can see the difficult politics but it would be helpful to get a clear set of rules as to how that land commission works, and what public land can be brought in, whether it be from other Government agencies or local authorities. The beauty of the London Land Commission is that it has some very good private sector advisers, who can start to think about what those parcels of land can be best marketed and used for. I would encourage the other regions or localities that set up registers to engage with the private sector early on.
Chris Philp
Q 126 Okay. Moving on, Mr Whitaker, to a remark you made in your summary note. You say that clause 106 will be helpful in that it requires local authorities to make the financial benefit of development proposals clear. Were you commenting generally, or in terms of trying to get the CIL money more clearly allocated to projects that are beneficial to a particular locality? An issue that I have encountered historically is that constituents feel that a large amount of CIL money disappears into the borough’s pocket and does not directly benefit the immediate area of a development. Is that a problem and are there measures in the Bill to help to address that?
Andrew Whitaker: That may well be a problem of CIL, but it is a different issue that is not covered by the Bill. It will be covered elsewhere. We see the idea behind making local authorities be very clear about the financial benefits of developments and about their decisions on those developments as being a much wider benefit to ensure that people start to recognise how much development brings to their area, rather than always seeing development as the downside of development and the effect on their immediate neighbourhood of development where there once was no development. The fact that people will be able to see how much new homes bonus and CIL, and what planning obligations and amount of council tax increases, are brought to their area by these developments will be beneficial in trying to overcome some of the people who are against development.
Chris Philp
Q 127 Good, and that is the purpose of clause 106, is it not?
Andrew Whitaker: It is indeed, yes.
Chris Philp
Q 128 My final question is to Mr Berry. Some smaller developers complain about some onerous aspects of the planning process, not all of which are addressed in the Bill, for example the requirement to do newt and bat studies and all that sort of stuff. How will the Bill help smaller developers? Are there any areas outside the scope of the Bill that may need attention in future? It might be helpful to hear about that.
Brian Berry: One of the issues that came up on Second Reading by the former Housing Minister is the fall in resources in planning authorities and the loss of experienced staff. That is an ongoing concern. Our members have come to the conclusion that they would pay to fast-track and get things done quicker because of the delays that they experience in the planning departments. The complexity and delays in the planning system are always criticised but they have got worse over the past few years. The Bill tries to address that. Therefore, we are very supportive of the provisions. There sometimes is a concern about accountability. Sometimes, small applications are not taken as seriously as larger ones. Therefore, the Bill’s extension of planning performance is a welcome move forward for small applications. Overall, the Bill is a positive move.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
Q 129 Following on from Mr Philp’s interest in SMEs, presumably the situation facing SME house builders is even worse in a London context than it is nationally. Therefore, would you go into a little more detail about some of the other challenges faced by SME house builders, particularly those wanting to operate in London? With imagination—imaginative drafting, in particular—some of the issues that you have touched on, perhaps regarding access to finance and the skills shortage, might be able to be included in the scope of the Bill through possible amendments.
Brian Berry: As I said, access to finance remains a serious issue, so a help-to-build measure would be very useful in underpinning loans to SMEs. The availability of small sites has been a problem, because local plans have tended to allocate larger parcels, but our members need smaller parcels. The brownfield register of small sites—five units—is a step in the right direction.
The skills thing is actually a much bigger debate about challenging the perception of vocational training and about the university route not always being the best for every child when they could be learning a trade. We have a role within the industry to demonstrate and improve the image of construction, because this serious problem will only get worse.
The other thing is about making better use of existing buildings, 85% of which will still be in use in 2050. The changes to permitted development to bring more residential back into city centres are positive, particularly in creating sustainable communities. That mix of people living and working, for which there is provision in the Bill, creates dynamic cities. There is a lot in the Bill that is positive, but the finance side would be particularly helpful.
Mr Thomas
Q 130 Specifically, would a section 106 requirement on big sites to offer apprenticeships be a helpful requirement for the SME sector? It clearly would not affect SMEs building on smaller sites, but they could benefit from construction apprentices coming through.
Brian Berry: The real solution is a cultural one, so that young people recognise that a career in construction is positive. We have to overcome some of the stereotype thinking. A survey by the Construction Industry Training Board revealed that 35% of careers advisers were advising young children not to go into construction because of the mud and boots image. If that continues, it will be no wonder that the best are not coming into the building industry. Our role is to change the image of the industry. The main challenge is to get more young people and more apprenticeships.
Maria Caulfield (Lewes) (Con)
Q 131 To follow on from the unanimous verdict that permission in principle would really help to kick off house building, I know from talking to developers and builders in my area that planning is a real stumbling block. With the technical details consent, are you concerned that we are just pushing blockages and delay further down the pipeline? Are you worried that you will get permission in principle but that there will still be a blockage further down the line?
Andrew Whitaker: No, we do not see that as a problem at all. As I said in my earlier response, we see this as bringing valuable focus to local authorities, who may say, “Yes, there is nothing wrong with the principle of development. We have identified this site and always knew that it was going to come forward for development. Let’s bring it forward as quickly as we possibly can.” A lot of what the Bill is trying to do is exactly that. It is trying to draw local authorities’ attention to the fact that they can facilitate more sites coming through the planning system to facilitate greater delivery of housing to alleviate the housing crisis that we find ourselves in. If we are to deliver more houses, it is important that the Bill does that and that local authorities refocus what they are doing.
Brian Berry: I would echo what Mr Whitaker said.
Ian Fletcher: I would echo that, but I would just add that one of the remaining challenges when you get to the technical stages is resource at a local level, which is variable across local authorities in terms of support in the planning process.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)
Q 132 Do you think that the provisions of part 7 of the Bill, which deals with compulsory purchase orders, will help streamline the compulsory purchase system?
Andrew Whitaker: Again, it is about trying to help local authorities to facilitate the delivery of sites. If they need to use compulsory purchase powers to do that, it is helpful, if only because local authorities will need to reread all the compulsory purchase provisions and may find that they are actually beneficial in bringing forward the sites that they want to bring forward. It is an important part of the Bill.
Ian Fletcher: I would agree with that. We represent mainly very large developers. Often, there will be a particular part on a site that will unlock it using CPO powers, and the improvements that you have made to them in the Bill are welcome.
The Chair
That brings us very neatly to the end of the time allocated. I thank all three witnesses for their evidence, which has been very useful and helpful. I am most grateful to them. I call the next panel.
Examination of Witnesses
Campbell Robb and Jon Sparkes gave evidence.
The Chair
We are now glad to be able to welcome Shelter and Crisis to the panel. We have a total of half an hour to take evidence from you. Perhaps you could start by introducing yourselves for the record.
Campbell Robb: I am Campbell Robb, the chief executive of Shelter.
Jon Sparkes: I am Jon Sparkes, chief executive of Crisis.
Helen Hayes
Q 133 Both of you, in your written submissions—thank you for them—have emphasised the need to address supply issues in order to address our housing crisis. To what extent do you think that the starter homes proposal will do that?
Campbell Robb: The first thing to say is that the drive towards more building is a welcome one, and the Bill is attempting to do that. Our concern with starter homes is that they will replace, rather than be on top of, existing provision. We are fearful also that the type and the cost will be out of the reach of what would be considered to be average families. The removal from section 106 of the requirement to fund social rented, and the replacement of that with starter homes, is the issue that we would have with that.
Jon Sparkes: I would make a very similar point. The concern for us is what happens to people at the very low end of income, for whom the starter home is a mile away. We think that if starter homes are instead of truly affordable rented homes, we will see an increase in homelessness.
Helen Hayes
Q 134 Who do you think will benefit from starter homes?
Campbell Robb: In the analysis that we did, we were quite generous in the types of deposits people would have and the costs, so we took a reasonable approach to our analysis of what would be available. I am afraid that our analysis showed that in about 60% of the country, even people on middle incomes would be outpriced. For people on what would be the new national living wage introduced by the Chancellor, when that comes in, in 90% or more of the country, starter homes will be unaffordable. We think that a very specific group of people in a very specific, quite high-end income bracket will get them. That is not to say that it is not a good thing, per se, for them to get a leg up and to own their own home, but the problem is with it replacing social rented and genuinely affordable homes.
Helen Hayes
Q 135 You both lead charities that seek to support homeless people. Will the starter homes benefit any of the clients you seek to help week in, week out?
Jon Sparkes: No. The clients we work with—about 8,000 clients a year—are living in shelters or sofa-surfing, and some of them are rough sleeping. There will not be a benefit to them from this. As Campbell said, that does not mean that it is not a good thing for the people it does help, but it will not help the clients we work with.
Campbell Robb: From our analysis, it genuinely will not help most people who are on an average wage. It should be the aspiration, I think, of any home ownership policy to open that up. That is where we see the problems with it. It would not help many of our clients.
Seema Kennedy (South Ribble) (Con)
Q 136 Mr Sparkes, I am looking at paragraph 14b of your submission, in which you say:
“Outside of the North of England, Starter Homes will be unaffordable to the majority of households on wages below the median”.
What is the north of England, first of all, in geographical terms? How many people comprise the north of England? I am interested in how you came to that.
Jon Sparkes: I have to say, we lifted that item completely from Shelter’s research, so I will pass it to Campbell.
Campbell Robb: I do not know off the top of my head what the north of England is in terms of the analysis, but I will happily send the detailed geography to the Committee. In terms of incomes and numbers of people, we took Government statistics on average wages and national income and used that analysis against what the cost of starter homes would be, on average, what an average deposit would be and what a normal deposit would be. That is the analysis data.
Seema Kennedy
Q 137 I appreciate that you are going to submit it. It seems to me, as somebody who represents a northern constituency, that the north is a term that is sometimes bandied around. Do you accept that it is quite a lot of people?
Campbell Robb: Yes.
Seema Kennedy
Q 138 And comprising a large geographical space, with massive variations between one area and another?
Campbell Robb: Absolutely, but the analysis we did across the whole country was based on national Government statistics on average wages. I am sure we can do a bigger breakdown, if that would be helpful.
Seema Kennedy
Q 139 I would appreciate that. Do you accept, though, that when you say that outside the north of England they will be unaffordable—we do not accept that—therefore they will be affordable in large parts of the north of England?
Campbell Robb: Potentially, yes, because the average income is lower and the cost of housing as we go further is generally cheaper—not always, but consistently; whereas the south-east, as you know, dominated by London, is far more expensive, but there are pockets around the country, in England and in Scotland, where house prices are out of control as well.
Seema Kennedy
Q 140 On that London point, we heard from the Deputy Mayor for housing this morning and he said that first-time buyers’ house prices were £290,000.
Campbell Robb: That sounds about right.
Seema Kennedy
Q 141 You accept that that is right? It is well below the cap.
Campbell Robb: £290,000 is the average. It depends on the type of property. That could be a one-bedroom property.
Seema Kennedy
Q 142 This is for a first-time buyer.
Campbell Robb: Indeed. The mix of starter homes includes family homes as well, so there is a price range. We are not sure yet; we are still waiting to hear what range of types of starter homes will come forward from builders and from the Government, because there will be a range of variations.
Andrew Griffiths (Burton) (Con)
Q 143 Mr Robb, may I come back to you on that? I am sure you would not want to leave the Committee with the wrong impression.
Campbell Robb: Absolutely not.
Andrew Griffiths
You talk about pockets of the country where prices would be lower. Are you not actually talking about the vast majority of the country? In the midlands, the north-east, the north-west, there are huge swathes of the country where starter homes at 80% of market value, perhaps coupled with Help to Buy, help with the deposit, are hugely affordable for the vast majority of first-time buyers.
Campbell Robb: As I said, we estimate that 60% would be unaffordable, 40% would be affordable, definitely. It depends, also, on where people want to buy. Not all those areas are where people want to move to jobs. As members of the Committee will know from their own constituencies, it is a challenge for young people to find work. Prices in Birmingham and the west midlands, around those hubs of employment, are going up. So, yes, by our estimate it will be 40% of the country. It is very positive, as I said earlier, for those that can get it. Our point was that, on our analysis, which we are very happy to share and which we continue to look at, on our first look at it, it looked like there are significant parts of the country and certain parts of the population who would not be able to afford it. That does not need to be the intention of the policy, but in terms of the clients we work with and getting a lot of people on to the housing ladder, we felt that this policy could go further than it did.
Andrew Griffiths
Q 144 Can you share some more of the specific evidence that you have? You seem to be talking in generalities, but focused on the south-east. Could you be clearer where those figures are coming from? For instance, I look at my own constituency of Burton upon Trent. You talk about high employment areas; we have record low employment in Burton and a starter home in my constituency, at 20% cheaper than market value, coupled with help with a deposit, would be hugely affordable to people on an average income of £20,000 or £25,000. Can you share with us the evidence, the statistics that you have that point to this not being affordable for the vast majority of people?
Campbell Robb: As I said, when you take into account the population density in the south-east and all around there as against Burton, you get to higher numbers as a natural consequence of people who will not be able to afford it. That is not to say that it is not working and could not work in Burton. I do not dispute that it may be excellent in your constituency to get a certain type of person on average income; that is great.
We looked at this policy nationally and against national statistics. I am happy to share and look at what more we can do to break them down. They are based on Government statistics and analysis. I am happy to share with the Committee and will go away and ensure that we send as much detail as we can back to the Committee.
I do not dispute that in certain areas of the country it will be affordable for some people, but over the whole piece of the national policy, which it is, we were concerned about certain areas—60% of our analysis. I would also have to look at the national living wage, which was the point we were making, because that is another group of people, not on the average wage, to see if this is affordable for them. I absolutely take it that it may be useful for your constituents.
Andrew Griffiths
Q 145 Could you share those numbers, so we can get some further analysis?
Campbell Robb: I am absolutely happy to do that.
Dr Blackman-Woods
Q 147 We will get more evidence from you and can come back to that. What I have picked up is that you have real concern about whether the starter home scheme will crowd out genuinely affordable housing. What do you think can be done to prevent that from happening?
Jon Sparkes: Clearly, the Bill makes it advantageous to build affordable starter homes as defined. It not being advantageous, leaving local authorities to have the flexibility to have houses for the population that they have, and to make an assessment on the availability of truly affordable social rented housing for the people who need it. The answer to it being crowded out is to not crowd it out, and to leave it for local authorities to decide and be flexible.
Campbell Robb: I would agree with that. Section 106 currently delivers about a third of all genuinely affordable for rent properties in England. Removing that stipulation on local authorities could reduce those numbers and replace them with starter homes. That is the difficulty in that situation. More local flexibility would definitely help us to answer it.
Dr Blackman-Woods
Q 148 Have you thought of any exemptions there might be applied to the policy?
Campbell Robb: More discretion is absolutely key. I suspect, as the Committee has shown, that as starter homes come in, which they obviously will, we need to monitor who is actually getting them. Are they genuinely reaching the people you want them to, so that constituencies do benefit? Is the level of debt being accrued and the ability to repay being positively looked at, to ensure that people genuinely can afford the home and that it is giving them the leg up that they want rather than a burden they do not want? Those two things would certainly be helpful. The point about section 106 and the consideration of how mandatory it is would be a very important thing to look at.
Mr Jackson
Q 149 Without labouring the point, my impression of the map you produced was a line from the Bristol channel to the Wash. I am mindful of the fact that one in three of the Committee are from London, but this analysis is rather centred on London and the south-east. Surely it depends very much on factors such as the differentials between the market prices of homes and affordable homes. My constituency is quite competitive in that respect, not least because until recently Peterborough had the second worst increase in house prices. There are lots of factors.
Would you concede that, in respect of your specific areas of expertise, starter homes have never been designed to tackle the housing difficulties of your client group in particular: very challenged vulnerable younger people from dysfunctional families and so on? Given the totality of the Bill, and the extra funding that would be released from some of its measures, it does not circumscribe the capacity of the local association to provide specialist supported housing for people with mental health problems, extra care for older people or moving-on accommodation for young people. That can still be done, which is obviously something you would welcome.
Jon Sparkes: You are correct, in that it is not a policy which is designed to support people at the lower end. We can argue about the level of discount as much as we like, but it does benefit the people that it is designed to benefit.
While you say that it does not stop anybody from doing anything? I think it is pretty clear that where there is going to be development investment in housing, it will follow this policy. This will give a level of priority and will take away from the incentive and willingness to do precisely those things that you describe.
Mr Jackson
Following on from the points made by Mr Griffiths and Ms Kennedy, is there not an argument that says it would use the market mechanism to potentially dampen down the overheated housing market in the south-east and London, and allocate housing to working people in areas that hitherto have not been viable, such as the east midlands, the north-west or Yorkshire and Humberside? That surely must be a good thing because it will drive economic activity, not least in the construction industry.
Jon Sparkes: Again, where it benefits people, it is absolutely a good thing, but when we are talking about people on minimum wage or on zero-hours contracts—people way below the average earnings that we are talking about—then absolutely it does not benefit them. The trickle-down effect, if ever proven, is just so far away from those people that it does nothing to bring them into the housing market.
Mr Jackson
Q 150 But you would not disagree with the idea that in the areas where economic activity, growth and prosperity are most needed, where hitherto you have had de-industrialisation and a poor housing market—I remember the pathfinders programme and so on—the starter home programme may potentially assist in that regeneration.
Campbell Robb: We were very welcoming of the original proposals around starter homes because the use of brownfield is obviously, as you heard in previous evidence, potentially very positive. There is great potential there for regenerating in different areas. Our concern continues to be that it is a replacement. If it was in addition to, rather than a replacement—which it is—then you could do that. In essence, using brownfield to create homes needs to go hand in hand, as you will well know, with jobs being created. People want to buy in places they can settle, where there are good schools and where they know that they can get reasonably close to their jobs. If that all pans out, then that is very positive for the group of people who benefit from it.
The Chair
Keeping an eye on the clock, may I ask for both questions and answers to be crisp and to the point, please?
Peter Dowd
Q 151 According to my figures, the number of people living in the private rented sector has increased by 2.5 million in the last five years. If only 5% of those people were affected, that would be 125,000 people affected by rogue landlords. Are the penalties for rogue landlords and agents sufficient to protect tenants?
Campbell Robb: First, I welcome the Government’s commitment in the Bill to further strengthen the legislation around the private rental sector. Just before the end of the last Parliament, we had some strong wins in terms of rogue landlords and revenge evictions, and there are more welcome things in the Bill. We would be interested in understanding whether there is more that we could do to prosecute rogue landlords and I think we could have a helpful discussion about that. So I think we could go further; that is what we would like to see and we would be very happy to share with the Committee and others about how we could do that. A relatively small percentage of landlords are rogue—I am conscious of not going on too long, Chair—but the stronger the message that we can send out, the stronger the power that local authorities have, the more we can do on this. But there are some welcome measures in the Bill.
Peter Dowd
Q 152 Do you agree that if only 5% of people in those tenancies were affected by that, that is 125,000 people? That is 125,000 people too many.
Campbell Robb: It is, absolutely, and every day we see people coming into our surgeries and phoning up our helpline who are really at the hands of some very bad behaviour, and we would absolutely support doing more to stop that type of behaviour.
Stephen Hammond (Wimbledon) (Con)
Q 153 To follow on from that, you both give an unequivocal welcome to part 2 of the Bill. Presumably you are also keen that the database is effective. Looking at Criminal Records Bureau checks and their successor, it seems to me that a database mechanism has been as effective in driving up standards. Are you optimistic that it will do the same in this area?
Jon Sparkes: Yes, I think it will. I think the Bill can actually go even further. Certainly, sharing information about banned landlords and banned letting agents is absolutely crucial and will have an impact. You can see landlords going across local authority boundaries. Once a landlord or letting agent is banned, the professionalising of the sector by making sure they undertake accredited training before they are unbanned is important, so there are areas where we would even support amendments that would take it further—all of which is caveated with proper protections for tenants. If you are the tenant of a banned landlord, you need an awful lot of protection, otherwise you just become evicted by default.
Campbell Robb: I agree with all that. I want to put on record that we have one caveat to unequivocal support, which is about the clauses about abandonment. It may not be the time, Chair, but I would like to share that there are potentially some unintended consequences of bringing that forward and of the lack of court oversight or local authority oversight in making sure that the proposals achieve what is wished but that they do not give a licence to some landlords to use them in a way that we would not support. I just want to put that on record.
Teresa Pearce (Erith and Thamesmead) (Lab)
Q 154 On abandonment, is legislation not already available for landlords to reclaim abandoned premises?
Campbell Robb: There is. Under section 21 of the Act.
Teresa Pearce
Q 155 So is this necessary?
Campbell Robb: We do not think it is. We think that landlords already have those powers and that we would not need to do this. If this is to go through, there are significant caveats we would like to add and areas, in terms of security, that we would like to strengthen.
Teresa Pearce
Q 156 On that point, if the clause goes through, do you think it will put additional pressure on local authority housing departments by people appearing evicted without due process?
Campbell Robb: There is a danger that without that due process, certain types of landlords may use this to create evictions. That might happen, yes.
Chris Philp
Q 157 You touched earlier on the question of affordability. Without going again through the comments you made then, do you agree that generally speaking, the best way to address any concerns about affordability is to increase supply and that, if we do increase supply as the Bill aims to, both rents and prices have a chance to just cool down a bit?
Jon Sparkes: I agree, inasmuch as it is about supply of the right kind of houses at the right kind of prices and the right kind of tenures. Simply building houses and diluting the supply of social housing will increase homelessness. So I agree, but it has to be the right kind of supply.
Campbell Robb: I would agree with that.
Chris Philp
Q 158 In the interests of time, I will move on to my second question. In your briefing note, particularly in sections 8 and 6, you draw attention to the disadvantages of renting—for example, you point out that getting kicked out of a private rented house accounts for 29% of homelessness, and you note that 30% of private rented houses do not meet the decent homes standard. Would you therefore agree that—provided people can afford them, of course—moving people away from rented accommodation into homes that they own themselves is a fundamentally good objective?
Jon Sparkes: We are not against the aspiration of home ownership, but we are against taking the aspiration away from those people who cannot own their own home. Renting has to be available. Just because there are flaws in renting does not mean that renting cannot be available, particularly where it is at the right price and the right standard. That is why we are supportive of the clauses around the conduct of landlords and letting agents in the private rented sector.
Campbell Robb: I would agree, and I would add that that needs to be mixed. Social rented has proved a real stepping stone to home ownership for many people in this country, because the low rents have allowed them to save and gather deposits. At the moment in many places—not everywhere, I agree—high rents mean that very few people whom we speak to can afford to save anything towards a deposit. It is in that balance of what you build and where—exactly as Jon said earlier.
Chris Philp
Q 159 That brings me on neatly to my final question. One proposal in the Bill is for social housing tenants, once they reach a certain level of salary at the end of the taper, to move to market rents. That will presumably encourage some people on higher earnings, who had moved into social rented but have progressed in their career, to move out of social rented and into some other tenure, creating space for exactly the kind of vulnerable people you are describing. I presume that therefore you would welcome that clause in the Bill.
Jon Sparkes: The principle that social tenants who can afford to do so should pay more is something that we are not against. There is a detail in there, which is about the onus of evidence. If someone is unable to provide evidence of their income we do not believe that they should be put on to a market rent by default. That will impact on vulnerable people, but the principle of paying more if you can pay more is not something we have a problem with.
Campbell Robb: I agree with that—we are not against the principle of it.
Mr Thomas
Q 160 Given the anticipated rise in population in London over the next decade, do you think this Bill will help us to tackle the housing crisis, or do you think the housing crisis in London will get worse?
Campbell Robb: Some of the policies, as we discussed earlier on, may not have as much impact in London as they will have in other parts of the country, as has been pointed out. Some of the sell-off of high-value council homes, in London in particular, will have a bigger impact in London to pay for the right to buy. Overall, I suspect that London will struggle without further measures to tackle the housing crisis.
Mr Thomas
Q 161 So you do not anticipate that the housing crisis will get worse in London, notwithstanding the various provisions within the Bill?
Campbell Robb: It will be interesting to see whether Help to Buy and right to buy—those types of measures—will generate new development. London needs to build a lot more homes, pretty quickly—up to 50,000 a year. It is hard to see at this stage whether these measures will work. Some of the evidence you are hearing from the builders and developers may help, but it is hard to believe that that is definitely going to happen.
Mr Thomas
Q 162 One last thing: the Bill has not been written with the interests of renters primarily in mind. What other measures to help those in rented accommodation would you like to have seen in a Bill such as this?
Campbell Robb: The one that we would like to see is a move towards longer tenancies. The very short nature of the shorthold tenancy—it has been shortened to six months—is a massive detriment, particularly to families living in the private rented sector, with children in schools who want to be able to settle. Many leases are rolled on, but knowing that every six months you might face moving is a real challenge. We have made proposals about three-year tenancies and even five-year tenancies. We are seeing big institutional investors that offer long-term renting offering longer tenancies, and not just in London. That gives security. We could have seen more on that area, which would have helped.
Jon Sparkes: I agree, but in addition to that, we would like to see as much effort being put into stimulating the supply of suitable and truly affordable rented property as the Bill puts into stimulating the supply of houses to buy.
Mr Thomas
Q 163 How would you do that?
Jon Sparkes: The way the Bill does it is ensuring that there is a priority around affordable houses to buy and that grants are available to make sure they are top of the priority list. Do the same for the others. There are models that show that investment in social housing is beneficial to the public purse over time, so invest in those as well. But it should not be “instead of”—our biggest fear is that affordable houses to buy are instead of truly affordable houses to rent, so do both.
Kevin Hollinrake
Q 164 You have both expressed concerns about the sale of high-value homes, but is that not just releasing assets to fund more building of more affordable homes? David Orr of the National Housing Federation said that it will increase new homes in all parts of the market, including the rental market. Is that not easing your concerns?
Jon Sparkes: I do not agree that it will increase the availability—
Kevin Hollinrake
Q 165 Even though he said that it would?
Jon Sparkes: If I could finish my sentence, I do not believe that it will increase the availability of social rented property.
Kevin Hollinrake
Q 166 Even though he said that it would, in all parts of the market?
Jon Sparkes: I do not believe it will.
Kevin Hollinrake
Q 167 We have heard evidence here today to that effect. One of the largest housing associations in the north say they will quadruple their numbers of properties—of new supply.
Jon Sparkes: There is a disincentive to build new council houses inherent in the Bill. There is a right to purchase social housing, but there is nothing to stimulate the availability of social housing.
Kevin Hollinrake
Q 168 David Orr said himself that housing associations do not want to move away from the business of providing houses for those in need—why would they?
Jon Sparkes: I would be very pleased if they do not, but I do not believe there is an incentive here to build social rented properties.
The Chair
With that we come neatly to the end of our session. Before we close, I thank our witnesses for their evidence and for taking questions so gamely, and our Committee for asking questions so sensibly. We move swiftly on to the next panel.
Examination of Witnesses
Mark Patchitt, David Montague, Sue Chalkley and Tim Pinder gave evidence.
The Chair
We are looking forward to hearing from this big panel. It will be quite a lengthy session lasting for an hour. Our witnesses are from the Riverside Group, from the London Housing Association, from the Hastoe Group and from Peaks and Plains Housing Trust. Please will you introduce yourselves for the record, starting on my right?
David Montague: David Montague, chief executive L&Q.
Sue Chalkley: Sue Chalkley, chief executive of Hastoe Housing Association.
Tim Pinder: Tim Pinder, chief executive of Peaks and Plains Housing Trust.
Mark Patchitt: Mark Patchitt, director of development and growth for the Riverside Group.
Dr Blackman-Woods
Q 169 Thank you, Mr Gray. The Government have suggested that the voluntary agreement on the right to buy was necessary to avoid legislation. How voluntary was the voluntary agreement? Why did you decide to accept or reject it and should a voluntary agreement be subject to statutory monitoring?
David Montague: I am on the board of the National Housing Federation. I also chair G15, as well as being chief exec of L&Q. We were concerned at L&Q from the outset that a statutory right to buy would give us less flexibility over the long term, so we were keen to support a voluntary proposal. We believe that it would be better for housing associations in the long term, better for our tenants in the long term, and better for social housing in the long term. We supported it from the outset, as did the vast majority of housing associations. That is not to say that we do not have some concerns. As others have mentioned, we are concerned that it will have a negative impact on supply, particularly in London. Having said that, along with my G15 colleagues, we are determined to ensure that there is a net increase in social housing in London.
Sue Chalkley: We voted no for two reasons. First, the proposal is not adequately rural-proofed. We have quite a few concerns around the impact on rural communities. Secondly, we do not believe the proposal is future-proofed. It is mandatory for us because it will be in the regulatory framework, but it will be voluntary for the Government, because they could change their view as to what proportion of the discount might be paid in years to come. We felt it put us in a very uncertain position. We would rather something was in legislation so that there was certainty about what the deal contained.
Tim Pinder: Our association voted no as well, on the basis that, as a charity, they felt uncomfortable voluntarily giving up their charitable assets. They absolutely respected the fact that the Government had made it clear in their manifesto that they would bring forward legislation. Our board was of the view that it would happily go along with any kind of legislative provisions, but was not comfortable voluntarily giving up its charitable assets.
As the Bill is drafted, we still have concerns about the use of the word “may” in terms of the Secretary of State’s powers for potentially providing grants. The language was very different to a voluntary agreement that we were asked to vote on, which talked about full compensation for the discount at which we would sell our properties. The whole notion of a grant does not strike us as giving the same kind of powerful commitment that we will not be out of pocket. The fact that it says “the Secretary of State may” sounds a rather weaker commitment than we were led to believe the voluntary agreement had struck, which was that we would be, without condition, reimbursed for the discounts that are available under the right to buy.
Mark Patchitt: We voted yes for the voluntary offer—we thought the voluntary offer made was very clear about the conditions, that we would go through with the right to buy and that it is on full compensation. Our board thought long and hard about it and we also asked our residents and tenants to see what they thought of it. We are a charity as well. As long as we can get the one-for-one replacement so that we are able to help just as many customers in the long run, we are in favour of the voluntary deal. It is on those terms that we have set out.
Dr Blackman-Woods
Q 170 What about the statutory monitoring of this? What do you feel has happened to you, becoming categorised now in the public sector? Are you concerned about it? Do you think that should be addressed?
David Montague: We are satisfied that our regulator will be required to monitor and we think that is an appropriate level of monitoring. As far as reclassification is concerned, naturally we were disappointed that we were reclassified, but we were pleased that the Government came out so swiftly after that announcement to confirm that it would take deregulatory measures to place us firmly back in the private sector. We believe that that is where independent charities belong.
We were also satisfied that, the day after the announcement, the chair of the regulation committee wrote to all of us and confirmed that, until the Government took the action that it had proposed to take, it was business as usual in terms of borrowing and expenditure plans.
Sue Chalkley: We were reassured by messages from the Secretary of State and the regulator but slightly disappointed that this was used as a reason for needing to say yes to the deal, whereas in fact it does not seem to be that much of a big deal after all.
Tim Pinder: There is a bit of an inherent contradiction between the regulator being given the power to enforce, monitor, control a voluntary agreement at the same time as the Government are making the commitment that they want us back in the private sector and to reverse the Office for National Statistics classification. Those two seem at odds to me.
Mr Jones
Q 171 In relation to this point about reclassification, Mr Pinder and Mrs Chalkley, you mentioned that you would rather see the right to buy firmly in legislation and the whole thing legislated for. Do you not think that that would pose a significant risk of the ONS continuing to classify as they have done?
Sue Chalkley: My understanding is that in deciding the ONS takes into account whether there is a certain level of Government control, regulation and legislation, so I am not sure whether it would have made a lot of difference whether it was in one or the other; it is still Government control and that is what they take into account. That is my understanding.
Tim Pinder: As far as we are concerned, just to be clear, we absolutely accept the democratic vote of the sector. Our position was that our board was not comfortable accepting the voluntary deal but we respected that the majority of the sector did and at that point, therefore, we were happy to accept the voluntary deal rather than legislative provision.
Matthew Pennycook
Q 172 Some 1.3 million housing association tenants expect, I think, on the basis of this Bill, the right to acquire or buy their own home. I would assume that you would not be able to cope with that level of take-up; I wondered what level of demand you think you can cope with annually, say next year. Are you concerned that there are not any measures in the Bill to help you to cope with the demand of people accessing that right?
David Montague: Our estimate is that 10% of our tenants will be eligible and will be able to afford the right to buy. That estimate is supported by the National Housing Federation, which also estimates that 35% of housing association tenants in the midlands and the north will be eligible and able to afford the right to buy. We expect our 10% to exercise their right to buy over probably a five- to 10-year period and we think that we can manage that level of demand. The average L&Q tenant has an income of £13,000, so even with a discount of £100,000, the vast majority of L&Q tenants will not be able to exercise their right to buy.
Sue Chalkley: We have some older stock in suburban areas but the vast majority of our schemes are in 250 rural villages. I know that this sounds really counterintuitive but we have had hardly any inquiries—fewer than five—from our tenants. Twice a year I do chief executive’s free-phone day, when people can ring me about anything. On my previous free-phone day in August, I only had one inquiry. I really do not know how you interpret that, but we do not have a sense that we will be overwhelmed.
Tim Pinder: Nor do we. We are a stock transfer housing association, so any tenant that was a tenant of Macclesfield Borough Council in 2006 retained their right to buy when they transferred across to us. Obviously that number has diminished each year as new tenants move in, but we have always managed to cope with the demand from that group. The new tenants who will be entitled to this right to buy do not represent such a significant challenge for us, so we are quite confident. I was interested to read the Minister’s comments about the potential for phasing in right to buy. We would be interested to understand whether that is a geography-based phase-in or whether it is about particular groups of tenants. How would that work? I am not so sure that we need that to manage the demand but gaining an understanding of those proposals would be welcome.
The Chair
The Minister has been called away to a meeting with the Secretary of State but I know that the officials are present and they will no doubt take note of the fact that you would like information, and provide it for you.
Matthew Pennycook
Q 173 Do you think there is a risk, if this is phased in or if you are not able to meet all the demand, that housing association tenants who want to purchase their own homes may feel let down?
Tim Pinder: They may well do. I do not know what lay behind the initiative to think about phasing in. One of the issues must be a concern about whether the amount of high-value properties in the local authority sector, which are designated as funding the discounts to housing associations, will be sufficient to allow the demand that you are identifying may well be out there to be met. For us, one of the issues is that we are aware of a very strong lobby from London-based local authorities to ring-fence any of the proceeds from its high-value properties. If that is successful, it prevents that money from heading north to where we are, where most local authorities have transferred the housing stock. The ability for local authorities in our neck of the woods—the north-west of England—to dispose of high-value stock if it was there is very limited because they are no longer stock-owning local authorities. That is my suggestion for what might lay behind the phasing in.
Matthew Pennycook
Q 174 Just picking up on the logic of what you just said, can I take from that that you think that like-for-like replacements in the local area where the forced sales will happen is unlikely?
Tim Pinder: No, when we say like for like, we are confident that we can replace at least one for one.
Matthew Pennycook
Q 175 With the same 10-year entitled spending?
Tim Pinder: Yes. However, where I take slight issue with the definition of like for like is that the area that we work in has some incredibly high-value properties and high-value areas. I was just looking yesterday at some land in Prestbury, where we have properties that will be attractive under the right-to-buy provisions. We are looking at £1 million-plus per acre. Now, there is no way that we can compete in the market to purchase land and build new in that village. We would be able to replace for every home sold in Prestbury, but it would not necessarily be replaced in Prestbury. That is the disadvantage.
Dr Blackman-Woods
Q 176 In areas of low-value housing, do you accept that it might not be possible to do a one-for-one replacement in the area because it would cost perhaps two or three times as much to replace the home that has been sold than the value of the home itself?
Mark Patchitt: It is going to be a challenge. We expect the average sale price of our right-to-buy properties to be about £82,000 or £84,000. That is probably less than it will cost to replace it, like for like, with a rented property. On your previous point about like-for-like properties and where you build them, it is important that there is some flexibility about where we build so that we can get the maximum efficiency in how we are building so that we can do the deals on the land now and try to get the land to replace these properties. We will have to look at whether we can replace exactly for all the affordable rented sales, but certainly we would expect to be able to replace affordable accommodation one for one.
Seema Kennedy
Q 177 Mr Patchitt, you said that when your housing association took the decision to vote for the voluntary agreement, you consulted your tenants and your customers.
Mark Patchitt: We did, yes.
Seema Kennedy
Q 178 Could you expand a little on how you did that? Do you think that they were interested in the proposals of the Bill overall and this idea of starter homes and expanding?
Mark Patchitt: We consulted them specifically about the voluntary right-to-buy offer. That was all that we consulted them on. We consulted our board and our residents at the same time. That was on the basis that if they voted no, there would potentially be a statutory right to buy, and if they voted yes that would be in favour of the voluntary right. They saw the benefits of the voluntary deal over a statutory deal in preserving some of the flexibilities that we had hoped for, and it was very much on the basis that they wanted one-to-one replacement. They did not want to see a net loss of affordable homes in Riverside, and they thought that was the best way of achieving that.
Seema Kennedy
Q 179 Can I ask the other panellists whether they went through a similar process? I am sure that you did on your boards, but was there any of that sort of consultation with the actual people living in the homes?
Tim Pinder: We did not, no.
Sue Chalkley: No, we did not.
David Montague: Nor did we. We consulted our board, which includes residents, and we have a resident board.
Seema Kennedy
Q 180 You have representatives on the board. Mr Pinder, you are based in Macclesfield, and you have cited the example of Wilmslow. Where else do you have homes?
Tim Pinder: We have homes in some very affluent parts of the borough, in places such as Alderley Edge, Wilmslow, Knutsford and Bollington. I think that is interesting because quite often the housing debate is characterised by a kind of north-south divide, which is far too crude.
Seema Kennedy
Q 181 That is why I asked, because I know the area well. You gave the example of Wilmslow for a family on £40,000. How far would that go? Would you get a house in Warrington or in Macclesfield itself?
Tim Pinder: Macclesfield is lower value than those areas, and even within some of those towns with a reputation for being incredibly affluent, there are lower value properties and lower value areas. It is quite a complex mix.
Seema Kennedy
Q 182 Would you accept that the example that you gave of a family spending 56% of their income is an outlier?
Tim Pinder: I would not say that it is an outlier. There are more properties in that field than there are lower value ones. I would say that that is more typical than not.
Seema Kennedy
Q 183 Perhaps that is because of that stock transfer from Macclesfield Borough Council, but surely in the rest of Cheshire there are definite examples where this sort of percentage would not be paid.
Tim Pinder: Absolutely. I would agree with that.
Helen Hayes
Q 184 I wanted to ask your views on the pay-to-stay measures in the Bill. I would be interested in your views on what you think the impact of pay-to-stay will be on your organisation, administratively and in terms of your capacity, on your tenants and your relationship with them, and also on the wider communities that you manage as housing associations.
David Montague: I will start by saying that we welcome any flexibility on the way that we set our rents. As charities, we will always use that flexibility carefully and prudently. We would prefer to see that flexibility extended across all of our stock, particularly given that we are not sure what will happen to rents in five years’ time. We think that the best people to set rents are the boards of charitable housing associations. We broadly welcome any flexibility that we are given.
On this specific measure, we think that pay-to-stay, for those who can afford to, will equal right to buy. It will encourage people to exercise their right to buy. They will have a choice of either seeing their rent doubled or accepting a discount of up to £100,000 to buy their home. It is a big incentive to buy their home. The difficulty is that if someone is living in a one-bedroom flat in Westminster and they cannot exercise their right to buy, then they could be stuck. That is why we welcome the flexibility that we are being offered through the voluntary deal, which will mean that the discount is portable —people can take it to a more affordable area. We are concerned about the administrative complexity of pay-to-stay. It is going to be a bit of a burden, and we are not yet convinced that the income we will receive will outweigh the cost of collection. It will require co-operation between us and statutory agencies in a way that has not happened before.
We would like to see some of the detail as well. We are not sure whether the same rules apply to a single person on £40,000 as to a couple on £40,000. There is a danger if it does that we could be drawing more people into the benefit system as a result of this policy.
Sue Chalkley: If it was a simple system to administer, we think that pay-to-stay might help to offset some of the rent reductions that we are facing. However, there are rural considerations with this initiative as well, in that many of the schemes that we have built for rural communities have been built with an undertaking that we will hold them as affordable housing in perpetuity. This could trump that deal with the rural community and cause a lack of confidence going forward, so that is a concern.
The other issue from the point of view of a rural community is that many families have seasonal part-time work and they have a portfolio of jobs, so it will be potentially quite complex to decide what the income is and how the rent is calculated on that. On top of that, there is plenty of evidence to show that living costs in rural communities are between 10% and 20% higher than they are in urban communities. Should the taper be in some way tapered to reflect the difference between rural and urban communities? We really just call for this to be fully rural-proofed.
Tim Pinder: We welcome pay-to-stay. I said before that our association had taken its view on right to buy because of its charitable status. On the same basis, pay-to-stay makes sense to us as a charity because to maximise our charitable assets, they should be going to the people in greatest need. We actually welcome it as a principle. I think, again, there is a bit of a potential conflict here with the Government’s intention to have us reclassified as private bodies, because they are talking about a legislative provision rather than a voluntary arrangement.
Some of our concerns are around the proposed level. For us, it is £30,000 outside London. From April 2015, a couple on the living wage would be at that £30,000 mark, so in our view £30,000 does not feel like the right level to reflect a high income household. Some of the details around how this would work in practice also give us some concern. If you are £1 above the £30,000 limit, does that immediately mean that you will move to market rent? If so, you are suddenly faced with an extra £3,000 rent per annum, which seems to fly in the face of the whole concept of “work must pay” and people bettering themselves in a way that does not have a financial disincentive. We very much welcome the principle. We would very much like, perhaps through the National Housing Federation, to work with the Department for Communities and Local Government to look at how that would pan out in practice.
Mr Jackson
Q 185 First of all, Mr Pinder, I think you are slightly gilding the lily in quoting Prestbury, because Prestbury is probably in the top 3% in the north-west, if not in England, as a super-output area for wealth. You could easily have said Widnes, Warrington, Winsford, Crewe, Chester or various other places. It illustrates the point that Ms Kennedy was making. There are obviously social and demographic variations even within one region.
Can I just address the issue of pay-to-stay? Because we ran out of time, we were not really able to challenge David Orr to the extent that we would have liked. The evidence that was given earlier seemed to suggest that housing associations were not expeditiously collecting data on the household income of their tenants. Is it not incumbent on you to have been doing that from day one? You are trying to allocate very scarce public housing resources. Why is it only now that you are saying, “We are not going to have the capacity,” or, “It is too bureaucratic to collect data on the income of our tenants”? You should have been doing that some time ago.
Tim Pinder: We certainly do for new tenants. The point you are rightly making is that, at the point at which we allocate a new property, to ensure that we are discharging our charitable responsibilities appropriately, we absolutely do check. In our case, having inherited 5,000 tenants from a local authority, if they are still our tenants now we have no record of their earnings.
We are in a very strange situation where we have really no right to know the earnings of existing tenants, but we have for new tenants. From the Information Commissioner point of view we should restrict the amount of information we hold on tenants to that which we ought to collect.
Mr Jackson
Q 186 But the legislation says that they have a retained right to buy. Am I correct in saying that?
Tim Pinder: Yes.
Mr Jackson
Q 187 Surely their financial bona fides are pertinent to an application for retained right to buy, if they wish to purchase a property?
Tim Pinder: What we find in practice is that a huge proportion of right-to-buy applications are funded by family members rather than by the applicant or tenant themselves. I am not so sure that helps us in the processing of right to buy. That remains a big challenge for us. If we do not have those data, how do we get them? There has been talk that Her Majesty’s Revenue and Customs will make those data available to us. How easily accessible they are is another matter.
Mr Jackson
Q 188 So the Government are doing you a favour in prompting you to collect information better, to use the resources at your disposal better. Would you agree?
Tim Pinder: I am not so sure it helps, no.
Peter Dowd
Q 189 With your permission, Mr Gray, I will use Mr Patchitt as a case study, to tease out an issue. Many of the houses under your control, Mr Patchitt, are in my constituency. I have some figures here. You say that you have 53,000 homes. Is that correct?
Mark Patchitt: Yes.
Peter Dowd
Q 190 So, on the figures we were given before, around 10% of them were sold. Is that a fair figure? Let us take that as an example. That is 5,300 at £85,000 a home, as you were saying before, which is £450 million, if my maths are correct. The full receipt to replace is not received because of the difference between the replacement cost of £100,000 as opposed to £85,000. The cost to replace at £100,000 leaves you short of about £20 million, does it not, if you were replacing like for like?
Mark Patchitt: It could do. There are different ways we can procure homes. This is an important point. Currently, we are able to acquire some homes under section 106 agreements with developers. That discounts the cost of rented homes, so we are able to get properties purchased from developers at around £80,000 in the north at some point, some time. That would help offset some of that, but to build new would definitely cost more. We are looking for a balance and we may have to consider some affordable home ownership to replace that.
Peter Dowd
Q 191 Would you agree that, if you had the absolute guarantee, or at least the guarantee in the Bill, that you were going to get, not just pound for pound, but perhaps £1 for £1.10, to rebuild all the houses that have been sold—
Mark Patchitt: It is a national offer. Nationally, as a sector, we say we will replace one for one. It may be that in some parts it is a bit more of a challenge for somebody to replace exactly one for one, but somebody might be able to replace a little bit more than one for one, and as a sector we will do that. We have signed up to the fact that roughly one-for-one replacement should be possible, if we get full compensation for the sale of the property.
Peter Dowd
Q 192 Can I pursue this further? You are a charity and are concerned with your charitable status and the people you deal with. You are not interested about what is happening in London or Manchester, or wherever it might be. The bottom line for you as a charity is whether you have the guarantee that you will, pound for pound, or £1 for £1.10, get that money back. Have the Government given you that guarantee in the Bill?
Mark Patchitt: The voluntary offer that we have signed up to—we have said why we would sign up to it—is that we get full compensation for the sale of our properties. If that falls, I do not see how we could provide the one for one, and our board would probably take a different view.
Peter Dowd
Q 193 That brings me to the question: are you confident that the Bill—not what Ministers say might be there—guarantees housing associations the full value of homes sold through the right to buy?
Mark Patchitt: The Bill mentions grants, and I have mentioned full compensation for the right to buy. Whether that is in the Bill or outside it, and how it is legislated for, I leave for others to decide.
The Chair
Before I call the next speaker, it may help the Committee to know that we expect a Division in the Chamber at 4.40 pm. Therefore I intend, with the Committee’s agreement, to wind up this session at 3.55 pm in order to get the next panel in before the Division. That gives another 10 minutes in this session.
Mr Bacon
Q 194 We heard from the previous witnesses from Shelter and Crisis that there is “nothing in the Bill for social renters”. As people running housing associations, do you think there is anything in the Bill for social renters?
David Montague: The overall picture is very positive and is backed up by statements from the Minister, from the Secretary of State and from the Prime Minister. A million homes over five years—we are totally behind that. We are very pleased to see efforts to release brownfield land and for the planning process to support the provision of new housing, but I am concerned that there is not enough in there for social rented housing.
Sue Chalkley: I entirely agree. We will do our best to continue providing affordable, rural, rented housing, and we support the general thrust of the Bill to deliver more homes of any tenure, but the Bill itself does not really incentivise more social rented housing.
Tim Pinder: I largely agree with that. I was struck by some work that the Halifax did recently on people who are renting, which found that 15% of renters across all sectors have no aspiration for home ownership. So, welcome though the Bill’s provisions are for starter homes, there is that chunk of people for whom I do not think there are provisions in the Bill to assist. However, I think that our ability to re-provide, probably, more than one to one and right to buy, means that, in that respect, there is something for social renters.
Mark Patchitt: I agree with the previous comments.
Mr Bacon
Q 195 I am specifically thinking of vulnerable groups, such as the disabled, the unemployed, those on benefits and homeless ex-servicemen and women. The Community Self Build Agency seems to think that the approach of self-build can do something for all those groups. On the front page of its website it says:
“I was encouraged by the local council to apply for the CSBA Scheme, I rang them and said; ‘I am disabled, unemployed, on benefits and I know nothing of building.’ They said; ‘You fit all the criteria!’ I have never looked back.”
None of you, in your answers, mentioned self-build, although that is chapter 2 of the Bill. What do you think self-build might do to help you? This refers to different kinds of tenure, including affordable rent and shared ownership, both of which the Community Self Build Agency does. What do you think that you, as housing associations, might do in this space?
David Montague: Self-build has a really important role to play, but will it deliver a million homes over five years? I fear that it will not. Will it deliver 50,000 homes a year in London? I do not think it will. Everybody has a role to play, but there is so much more than self-build that needs to be offered as a solution.
Sue Chalkley: I absolutely think that the solution is lots of little schemes. I really like the Self-build and Custom Housebuilding Act 2015. We held a landowners conference in Newmarket three weeks ago and we have been overwhelmed by landowners expressing an interest in doing self-build. We are following up a number of leads at the moment, so we feel really positive about that. It is a good, local solution that will be something that the local community will own and be proud of.
Tim Pinder: We have had discussions with the local authority about making provision on our sites—as we develop them for either shared ownership or for rent—available for self-builders as well, so we are happy to accommodate them as part of the mix, as Sue suggests.
Mark Patchitt: I think it can be complementary. It is a very intensive support system to help self-building get off the ground—it takes a lot of human resources and time—and we have preferred to concentrate our efforts on commercial building, affordable building and other off-site manufacturing ways of trying to add quantity to the whole output.
Mr Bacon
Q 196 Is there anything in law which prevents housing associations—which, after all, are actors who play in the space at scale—from promoting mutual housing co-operatives and taking part in them?
David Montague: I doubt whether there is.
Sue Chalkley: I do not think so.
Mr Thomas
Q 199 Mr Montague, can you flesh out a point you made in your opening remarks about your concerns that the Bill will not add to supply in London?
David Montague: We believe there is a lot that is positive in the Bill, as I mentioned earlier—brownfield sites and so on—which will help us to deliver more homes in London. The tides that we are swimming against in London are the loss of local authority stock that will be difficult to replace and the effect of the starter home initiative, which is still difficult to determine. Our fear, as others have suggested, is that it will replace social housing.
Dr Blackman-Woods
Q 200 Can I follow on from that? The G15 are quite strongly against this forced sale of council housing. Do you share the concern that the Government should not be seeking to support the right to buy through the forced sale of council housing?
David Montague: We are concerned that it will lead to the loss of affordable social rented housing in London. We would have preferred to have seen the voluntary right to buy funded through other means—means which we suggested. Given that we are where we are, we are determined to work with local authorities to protect against the loss of social housing in London.
Maria Caulfield
Q 201 I am interested in your opinion on the concern about matching the loss of right to buy one to one. Have you looked at other methods, other than traditional house building methods? My local authority only this year has gone down the modular housing route, which has enabled 100% affordable rented housing to be turned round that meets all building regs, along with the “Code for Sustainable Housing” and the Lifetime Homes standards, and the houses are three and four-bedroomed detached houses for low-paid workers. The cost to build each house is less than £30,000, so you could easily replace two for one, for example. Have you looked at those models?
Mark Patchitt: We have been working with housing associations in the north-west collectively to look into modular off-site and to see whether we can collectively bring the purchasing power that would make a difference. We first thought that we might be able to get discounts. That wasn’t the case, but we could help the industry with modular. Our experience to date—we have done a number of pilots—is that the actual cost of modular today is slightly more expensive than traditional. However, we are still pursuing it, because we believe that in two, three or four years’ time it will be as competitive, if not more competitive, as you see labour and material costs go up.
Maria Caulfield
Q 202 I am slightly concerned about that. With the modules that we have been using, we can build a three or four-bedroomed house for less than £30,000 in 18 weeks. They are quick and cheap to build. I am surprised if you have not looked at that route at all.
Mark Patchitt: A lot of the modular solutions have very good headlines—I don’t wish to dispute the figures—but we found £60,000 per house didn’t include the garden, the fencing or the roofing in one instance. We have looked into a number of schemes, and I believe it is a very good point. We should be looking at off-site and modular housing. I really believe it has its place going forward if we are going to create the million homes that we are aspiring to.
Andrew Griffiths
Q 203 All of the panel have discussed the £30,000 as the limit for pay to stay. The Government are consulting on a paper or a gradual system that could even have regional variations. Could the panel tell us if you have contributed to that consultation and, if so, what have you said?
Tim Pinder: We have, yes. Some of our suggestions are around perhaps starting a taper at a rent that is earning 25% above the existing £30,000 threshold, so there is clear blue water between them—perhaps as a taper similar to the rent convergence that housing associations and local authorities adhered to over recent years, which means that we set a rent as a target that we want to get to over, say, a five-year period and the rent increases by £5 per year until we get there. Those are some of our ideas.
Mark Patchitt: We have contributed. In terms of the taper, we are concerned that £30,000 is on the low side. The difference for some of our residents, for example in Bromley, between what they would have to pay as a market rent and what they currently pay today would be an enormous jump. That £30,000 threshold in 2020 is two people on minimum wage.
Andrew Griffiths
Q 204 Have you made a specific suggestion on what the taper should be?
Mark Patchitt: We have not. We would prefer it to be a higher threshold.
Sue Chalkley: We have not yet. I would not imagine that we would make a specific suggestion about the taper. We will probably be majoring on the impact on rural communities.
David Montague: We will make a submission. We believe in a higher threshold. More importantly, we believe that pay to stay should be voluntary and it should be part of the general flexibility for housing associations to set their rates.
The Chair
We thank the panel very much indeed for their evidence. I hope you do not mind me curtailing it slightly but the business of the House demands that we should do so. Thank you for coming in. Will the next panel take their places with no undue delay?
Examination of witnesses
Carolyn Uphill, David Smith and David Cox gave evidence.
The Chair
I would like to welcome representatives from the National Landlords Association, the Residential Landlords Association and the Association of Residential Letting Agents. Before I ask you to introduce yourselves, I remind you that we expect a Division in the Chamber at 4.40 pm—40 minutes from now—and therefore we will curtail the session at that stage. Could you identify yourselves for the official record?
David Cox: I am David Cox from the Association of Residential Letting Agents.
David Smith: I am Dr David Smith from the Residential Landlords Association.
Carolyn Uphill: I am Carolyn Uphill from the National Landlords Association.
Teresa Pearce
Q 205 Everyone agrees that rogue landlords are a very bad thing and something must be done. In the Bill, if certain criminal activities are undertaken by landlords, they can be subject to a banning order. Do you think that will result in improving standards? Do you think that a banning order is the right action?
David Smith: We support banning orders if they are used effectively to eliminate criminal landlords. One of the problems that we have identified at the moment is that enforcement action is not taken often and robustly enough by local authorities. There is a tension between banning orders and the new power in the Bill to create civil penalties, because if a local authority chooses to use the civil penalty route, it cannot then use a banning order because they are only possible when they prosecute somebody. What we are very keen to see is an amendment to the Bill so that local authorities do not continually issue civil penalties against landlords who should be prosecuted, issued with a banning order and removed from the sector.
Teresa Pearce
Q 206 Just on that point about civil penalties, do you think they are high enough?
David Smith: I think the size of the penalty is fine. What I do not want to see, or would be very unhappy to see, would be very serious matters being dealt with by a civil penalty, whereas the most serious matters should always go to court.
David Cox: We have to factor in that sales agents can already be banned, and have been able to be since the Estate Agents Act 1979 came into force. We would like to see the lettings sector brought under the Estate Agents Act. We support the concept of banning orders, but against individual agents, as in the Estate Agents Act, rather than agencies. One thing we would not want to see is an individual agent—maybe a new recruit—who has done something very stupid which could shut down an entire agency, particularly as some of the large corporate agencies employ tens of thousands of people, so we think that banning orders should be based on individual agents.
More importantly, however, at the moment the sales banning list is held by Powys County Council, by the national trading standards estate agency team, which bans sales agents, but at the moment still allows them to practise as letting agents. When these banning orders come into force we need to make sure there is joined-up work between whoever is the body that will be dealing with the banning orders for letting agents and landlords, and Powys’ national trading standards, so that we do not end up with a situation where somebody can be banned as a sales agent but still practise as a letting agent, or banned as a letting agent and still practise as a sales agent. We suggest either that the two come together as one overarching body, or that they speak very closely and regularly, to make sure that we do not end up with unintended consequences.
Carolyn Uphill: The National Landlords Association is broadly supportive of these measures and the intention of the Bill, because part of our value statement is that bad practice and criminality should be driven out of the sector. As a landlord, it is not good for my business to have criminals operating within the sector. Whether banning orders on their own would drive the criminals out is a question of them actually being used. That relates, as my colleague said, to the use of fines and civil penalties. We need enforcement action to drive these people out of the sector. In principle it is an idea we would support, but in practice we would welcome consultation with the stakeholders, to make sure we get it right and there is a good right of appeal, so that the right people are driven out of the sector. As landlords, it would do us all a great deal of good to drive the criminals away.
Teresa Pearce
Q 207 So without further investment in local authorities, do you have confidence that local authorities could actually undertake this work?
Carolyn Uphill: If local authorities had the ability to keep the proceeds of any fines or civil penalties they levy, we would fully support that; we would like to see them ring-fenced to be used on housing matters, so that there is a real incentive to make the polluter pay—make those causing the problems pay for them. Perhaps they should be able to refund or rescind some of the licensing schemes, which are just a cost on the good landlords. Get the polluter to pay and use that money to improve standards. Then there would be a strong incentive to do it. The evidence is that in the last six years, 2,006 landlords were prosecuted under the Housing Act, whereas every week we are fining 3,000 people for not having a TV licence. Somewhere, we need to put more emphasis on this.
Stephen Hammond
Q 208 Ms Uphill, in your written submission you raised concerns about privacy. First, can you set out in depth what you think those are and, secondly, following on from your last answer, do you think that local authorities have the ability to construct the database so that privacy is protected?
Carolyn Uphill: Are we talking about the database for rogue landlords?
Stephen Hammond
Correct.
Carolyn Uphill: I would hope that it can be constructed so that privacy is protected—it is not the sort of information we would like to see left on a train—as long as it is properly protected and controlled and used for the right purpose. It should not be a fishing exercise for matters outside housing issues, but if properly used to stop the sort of people being involved in the industry who do not do me as a landlord any service, then it should be feasible.
Stephen Hammond
Q 209 Mr Smith, are you confident that the local authorities will be able to maintain an accurate database?
David Smith: We are concerned about accuracy. The difficulty will be that a local authority, having gone through potentially quite a bruising prosecution process, is then going to have to repeat the process to achieve a banning order and face further appeals. We are concerned that local authorities might get a prosecution, be satisfied and stop there without carrying through a full ban to remove the landlord.
Stephen Hammond
Q 210 But the obligations placed on them in the Bill to do so should be strong enough, should they not?
David Smith: Yes, they should, but the other side of that is the secondary database of merely bad landlords, as opposed to banned landlords. The problem will be moving people effectively from that database so that it stays a live database. Up to now that has been a mixed process.
Stephen Hammond
Q 211 I notice from your written evidence that you think the Bill will provide a good opportunity to support and encourage longer tenancies in the sector, which presumably you would all welcome. Can you explain why you think that?
David Smith: Our members—not all our members but a significant percentage—are quite happy to grant longer tenancies. The fire, in a sense, is targeted in the wrong direction from our perspective. The two biggest barriers to longer tenancies are mortgage companies, which tend to put restrictions on mortgages—we feel the Treasury is in an historically strong position to do something about that if it wanted to—and long leases of flats, particularly in the capital where there are a great many more blocks of flats. Ironically, many of those blocks are in the hands of local authorities or housing associations but almost all of them include a restriction on leases of more than 12 months.
It is an area that is very difficult for a landlord with 1,000 leases to fix themselves, because they would have to go and re-sign a couple of thousand leases. So we think it is an area uniquely suited to legislative intervention, by simply acting to replace such a clause with one that allows a tenancy of up to three years, which is already more than the vast majority of tenants have indicated that they would like.
Stephen Hammond
Q 212 Mr Cox, if we turn to part 3 of the Bill on recovery of abandoned properties, do you think that the provisions of the Bill will remedy the shortcomings of the current system?
David Cox: Yes, I think that they will. It is quite a complicated process that has been set out in the Bill. The issue of abandonment is not a massive problem—the problem is that, when it does happen, it causes a huge amount of confusion, concern and, effectively, a great loss of income. It takes up a huge length of time. We also have to factor in the deposit, which is not mentioned in the Bill, particularly if the custodial scheme, DPS, is used. It is difficult for the landlord to regain the deposit when it is in the custodial scheme because it requires both sides to agree to the deductions from the deposit, if there are any. If one party has disappeared and abandoned the property, there is no way of getting that party’s agreement. The deposit therefore sits in the deposit scheme.
Generally, the process is welcome. It is following the same path as under the Renting Homes (Wales) Bill in Wales and the Private Housing (Tenancies) (Scotland) Bill in Scotland. We would not recommend any changes at all, merely the inclusion of a clause on deposit protection.
Carolyn Uphill: We have long campaigned for this and we are very supportive of it. As Mr Cox said, it is not a very common problem but when it happens it is very costly and problematic for the landlord; plus there is a property tied up with nobody in it that somebody else could be occupying. It is only right for this legislation to speed up the process. There is no need to be worried about some of the scaremongering that this will cause a disservice to tenants, because the clause requires there to already be rent arrears of at least eight weeks, usually two months, and for the landlord to have made great attempts to contact the tenant. If a tenant is paying the rent and is contactable there will be no problem at all, but if neither of those is happening the landlord would, in any case, be seeking possession. It simply speeds it up and puts a home back on the market for somebody else.
David Cox: May I make one final point? Looking at clause 52 on reinstatement, it talks about an application being made up to six months after. This is exactly the same as its respective clause under the Renting Homes (Wales) Bill. Six months will allow a tenant to leave a property, take up an entirely new six-month tenancy and then come back to the property and demand it back. We would ask for that period to be shortened, so that it prevents that prime example. Someone may be living up in the midlands and has a six-month contract to work down in London, they come to London, do their contract then go back and demand their property back, which they will be able to do under these clauses. We would ask that it be shortened—I would suggest to two months, because they have at that point probably already abandoned the property for four or five months. Six months will allow, potentially, a rather perverse situation and unintended consequences. We would ask that, under clause 52(3), it be reduced to two months instead of six.
Dr Blackman-Woods
Q 213 Clause 30 states that the Secretary of State will give all local authorities access to the database. Can you say why my constituent should not have access to that database, so that they know who is subject to a banning order? In clause 31, on use of information in the database, would it not be helpful if local authorities were able to use that information to help protect tenants and future tenants?
David Cox: I can talk for letting agents. From their point of view, yes, I agree entirely. For agents it should be an open database. The sales agents database is an open database and has been for many years. Therefore we would like to see both the rogue agent database and the banned agent database being public. First, this would mean that tenants and landlords would be able to see whether their agent had been banned or blacklisted. Secondly, and I would say more importantly, it would mean that agents can also check the database when they are looking to recruit new staff. What has concerned agents since the discussion paper was launched earlier in the year is what would happen if they employ someone who has been banned. They cannot check the database under the proposals and under the Bill, and therefore they will have no idea. If it then subsequently comes out, it would damage their reputation through no fault of their own and with no ability to actually check.
David Smith: We haven’t made any particular points on this issue. We have no particular issue with the database being available to tenants to check, save that we need to make sure that it does not involve accidental scapegoating of people with similar names, which has been a historic problem with other types of database. In fact, I was watching a programme yesterday that said that 12 people have been attacked recently because they look a bit like Maxine Carr. We would like to avoid a situation where a landlord with a similar name to somebody who is on the database was then told by tenants that they were not acceptable to rent from. There needs to be enough information to ensure that does not happen.
Carolyn Uphill: I think that we would probably agree with that. In principle, there does not seem to be any obvious reason why it should not be more widely accessible, other than whether it could lead to this sort of confusion or misunderstanding. I understand that a banning order might not be forever if circumstances change, and so it precludes any rehabilitation of a landlord. Surely the objective of this is to get standards to improve, so it would need to be very carefully thought out before it was made publicly available, and all the information would first have to be absolutely cast-iron correct. We are cautious about it, but we would not necessarily argue against it.
Dr Blackman-Woods
Q 214 But with some safeguards, you think that it could be made accessible to the public? Would its secrecy not be a huge disincentive to the whole system, because only local authorities would have access to it?
Carolyn Uphill: I think that we need to reflect on that and respond in more detail.
Kevin Hollinrake
Q 215 Mr Cox, you referred to the banning orders operating at a company level rather than an individual level. You want them to operate at a company level.
David Cox: No, we want them to operate at an individual level, which is the proposal in the Bill. This was not the proposal in the discussion paper earlier in the year. There is one reference in the Bill to a body corporate, but I am not quite sure where it comes from and where it ties in to all the other clauses. We certainly think that it should be at the level of the individual agent. Where it is offices of a company that have caused a problem, then again we could still ban the agent, not the agency. If you ban David Cox Lettings, for example, there is nothing stopping the company directors of David Cox lettings from setting it up again as David Cox Lettings and Property Management Ltd, at which point the agency has been banned but the agents are still trading. They could also go and work for another company. That is why we believe that it should be at the level of the individual agent, which it is in the Bill.
Kevin Hollinrake
Q 216 What further provisions, on top of this, would you like to see in terms of control over the quality of both lettings agents and landlords?
David Cox: This comes back to what we put in our manifesto earlier in the year for the general election. We argued that this Government should take a two-pronged attack. First, we would like to see much greater regulation and much more appropriate regulation of the lettings and management industry, something akin to the London Mayor’s London rental standard. Boris has created an appropriate model of regulation of the sector, which utilises the existing skills and infrastructure set up by the professional bodies and therefore will not cost the public purse huge sums of money to create a regulator. In fact, the London rental standard is very similar to the way that the Bar is regulated and has been regulated for many hundreds of years.
We would argue that that is an appropriate form of regulation going forward, and would very strongly urge that that sort of regulation goes into the sector, particularly around qualifications for agents and client money protection. If the Committee takes nothing further from this, I would strongly advocate—I think everyone would—for all letting agents to have client money protection. We hear far too often of agents running away with millions of pounds of other people’s money. Client money protection would offer landlords and tenants the ability to get their money back.
The other side is enforcement, which is very much contained within the Bill. We very much welcome the requirements of the Bill. Enforcement has been derisory over the past few years. The number of prosecutions is low and the actual awards made are awful and effectively nothing more than a cost of doing business for a lot of these criminal agents.
We want to see local authorities being adequately resourced. At this time, that money cannot come from the central Government fund, which is why I agree entirely with Carolyn that local authorities need to be able to keep the fines, rather than them going back to the Consolidated Fund. Local authorities, particularly trading standards and environmental health, are departments that are revenue drains on local authority resources. If they get to keep the fines and the fines are ring-fenced for further housing enforcement activity, that will start making the environmental health and trading standards departments revenue generators for local authorities, instead of revenue drains.
Just to give you one example, if I may, one of my members in the east of England went down their high street when the Consumer Rights Act 2015 came into force with the fees elements. Of 23 agents, 19 were not displaying the necessary fees. At a £5,000 fixed penalty notice, that is £195,000 in on-the-spot fines that could be levied with very little work by a trading standards officer. If they had not got the fees on their website, which they probably had not, that was another £195,000. If local authorities were enforcing that, they could make hundreds of thousands of pounds for their department and start ridding the industry of the people we do not want in it.
Mr Thomas
Q 217 I draw the Committee’s attention to my declaration in the Register of Members’ Financial Interests. I want to pick up on the question that Mr Hollinrake was asking about client money protection. Mr Cox, can you flesh out the detail and the type of amendment that you would want to see that would offer that? Similarly, Mr Cox and Ms Uphill, do you agree with Mr Smith on the potential benefit of three-year tenancies and on a provision for that being included within the Bill?
David Cox: If I can deal with the client money protection issue first, client money protection is at the moment primarily provided by the professional bodies. All our licensed ARLA members must have client money protection, so that in the event that any one of them goes bust or misappropriates the funds—it has happened 12 times in our 34 years—we will cover the moneys up to certain caps.
There are providers out there that offer client money protection for agencies through the open market, but client money protection means two things. First, it is an insurance premium, so that in the event of an agency going bust or misappropriating funds, clients—both landlords and tenants—get their money back. Secondly, and more importantly for us, it means that agencies have to have their client accounts audited, so that you know whether something is going wrong. We audit every single one of our member firms’ client accounts, and we require that in order for them to join the professional body.
In terms of an amendment, I am afraid I do not have the specific wording here today, but I can provide the Committee with a set of words. We provided a set of words for the Consumer Rights Bill last year, and that was supported by more than 20 organisations, including landlord associations, letting bodies, consumer groups and Shelter, Generation Rent and Crisis. It is an issue that has unanimous support among everyone involved in the housing sector. The Consumer Rights Bill started moving us in the right direction, with firms having to display whether they have client money protection, but we estimate that on average on any given day—my members alone account for about 60% of the market—firms will hold just under £3 billion of other people’s money. That is protected for our members, but what about the other 40% that is not protected?
On the three-year tenancy question, three-year tenancies can work. I do not think they should be mandated because there are a lot of situations where people do not want a three-year tenancy. In my previous answer I talked about somebody who may be coming to London or one of the other big cities on a short-term contract. The other prime example is a student. When they have been in halls for one year and have only two years left of their undergraduate course, do they want to sign a three-year tenancy when they do not know what they will be doing at the end of their third year? So we would suggest that the current tenancy regime works.
According to our latest survey of our members, the average tenancy is now 20 months, and we have to remember that, according to the Government’s statistics—I think it was the last survey of English housing—well over 90% of tenancies actually end at the request of the tenant, not the landlord, so removing that element of flexibility could do more to harm those that probably want it than actually help.
Carolyn Uphill: As the clients, when we are talking about client money protection by our landlord members, we would of course support client money protection because it is only right that the money should be ring-fenced within agencies. I am sure David will supply you with a suitable form of words.
As for three-year tenancies, the English housing survey of 2013-14 evidenced that the average tenancy was three and a half years, so tenancies are not as short as some people imagine. Many, many landlords are more than happy for tenants to either be given as long a tenancy as the mortgage provider allows or roll on to a longer tenancy, because what landlords want is good long-term reliable tenants without the costs associated with churn. But if that were to be imposed as a minimum, it would seriously damage the availability of accommodation for those who need it on a much more flexible basis.
David mentioned students. I am a student landlord. It would tie me in knots when my students decide to stay on in Manchester as young professionals and say, “Can we stay on for a year because we don’t know where our career is taking us?” so I end up with a mixed house. Any imposition of a period beyond the 12 months that, in that particular case, suits the academic year would cause me as a landlord to consider, “Can I stay in this business?” There are lots of other landlords who are letting because they are away for 12 months and various other factors. There really should be flexibility in the market. There are tenants who want flexibility and there are plenty of landlords willing and happy to give longer tenancies to those who want them.
So we support the principle of longer-term tenancies being available if the mortgage provisions can stop that being constrained, but not as an imposed three-year or any other fixed minimum.
David Smith: I was not in any way suggesting that three-year tenancies should be mandated. All I am talking about doing is removing barriers. I should also say that the statistics are very difficult to interpret, because longer tenancies are more common outside London and the south-east. As soon as you drive into London and the south-east, it is not so much that tenants do not stay for two or three years, but they are forced to sign a series of 12-month tenancies. There are a range of reasons for that. At the risk of incurring David’s wrath, I will point out that one of the reasons for that in London is that letting agents encourage a series of 12-month tenancies to secure their fee structure. That also, in our experience, is one of the things that most actively drives rent increases, particularly in the capital, and we feel that if tenants were able to sign two-year tenancies, and those barriers to two-year tenancies were removed at the front end, the pressure to drive that rent up during the course of the tenancy on each renewal would be reduced.
Brandon Lewis
Q 218 On that point, on the issue around tenancies, when we look at what is happening elsewhere around the world, many places have a much larger and more advanced rental market than we do and still have one-year tenancies. Would you agree that one of the differences seems to be that we have a buy-to-let-led system—I think the colloquial phrase is “mama and papa” landlords who own a small number of properties, about 91% of the market—and the biggest risk to a tenancy is that property being sold to an owner-occupier, whereas in other models, such as multi-family housing, if the property gets sold, the invoice from the managing company might change from Greystar to Amlin or somebody else, but the property tenure remains the same and the tenancy issue is of a different nature. That leads back to one of our earlier evidence sessions, when somebody made the point about how more institutional money with a more professional rented sector changes the dynamic around the tenancy lengths, anyway.
David Smith: I am not sure I would agree with that. The statistics already show that the majority of tenancies end at tenants’ requests, not because the landlord wants to sell. Increasingly, the sector’s structure, even among smaller landlords, is changing. Landlords are often now increasingly selling with tenants in place to other landlords. Some of this is the buy-to-let sector in England and Wales growing up and perhaps becoming more like some of the buy-to-let sector abroad. Our view remains that one of the reasons that we tend to have many 12-month looped tenancies is that it has grown up that way through influences from the opposite side of the equation, from mortgage company pressure, from long lease pressure and from lettings agency pressure. At the moment, landlords are very linked to six-month or 12-month block tenancies. There is very little other discussion about term in the market. If we can break out of that cycle, we feel that would do a lot to change the dynamic.
David Cox: I would agree with that, and at the same time with what the Minister said about looking at other countries. We hear a lot that we should look to Germany and France and their tenancy models. However, in relation to our tenancy model, that is comparing apples with pears. We have to factor in that in places such as Germany, they have indefinite tenancies but it is the tenant’s responsibility to maintain the property during those tenancies, and many do not come with kitchens and bathrooms. Here, the obligation is entirely on us as the landlords to maintain the properties and the goods inside the properties, whereas in Germany and France it is the tenant’s responsibility. We also have to factor in that they have a much more mature rental market. They have many more institutional investors. In Germany and France, the vast majority of the private rented stock is owned by institutional companies, whereas ours is owned predominantly by the “mama and papa” landlord.
It is also still a relatively new market. Looking back 100 years ago, 90% of the UK’s stock was in the private rented sector. By the time we had regulatory liberalisation under the Housing Act 1988, that had shrunk to less than 7% of the sector. It has only grown back to the size that it is today with that regulatory liberalisation, particularly the ability to use section 21 of the Housing Act, coupled in 1996 with the introduction of the buy-to-let mortgage, which provided a financing vehicle to allow people to start investing in property in the UK.
We need much more investment in property. There is a chronic housing shortage in the UK at the moment. The Government estimate that for every house built, two new households are created, therefore the level of housebuilding is not at a sustainable level. The only way we are going to get rents under control, get house prices under control, particularly in places like London, is by a massive house building programme.
The Chair
We have 10 minutes left, so we will have to be quite swift.
Carolyn Uphill: If I may just add to that, I think there is a place for institutional investment but we are not like Germany, as David says; we are an entrepreneurial buy-to-let sector. We have lots of small landlords, but that does not mean either that they should not be professional, which is the purpose and objective of the Bill, or that they are not in it for the long term. I have certainly invested in my portfolio as a pension plan. Many, many landlords want a longer-term income and therefore longer-term stable tenancies.
Helen Hayes
Q 219 Sticking with this issue of forms of tenancy, in one of the boroughs that I represent, 40% of residents are now living in the private rented sector. You are right to say that many of those landlords are happy for tenancies to roll on, but a lot of those tenants feel that they are very much at the mercy of landlords and relying on the good will of landlords to let those tenancies roll on. Many of those households are families with children. They have no prospect, in the short to medium term, of getting into the housing market and purchasing a home of their own. There is a shortage of social rented housing. They want to know that they can send their children to the same school for the duration, that they can settle in their communities and play a full role in community life.
I would not suggest that long-term tenancies should be mandated, but would you not agree that now is the time for further diversity of options in private sector tenancies, so that where it suits the landlord and where there is a need in terms of tenants, those tenants can have more security of tenure for the longer term?
David Smith: Yes, absolutely. We accept that point. We agree with that point. We have tried to educate our members about longer tenancies but I cannot educate my members to do something that they know they cannot do.
Helen Hayes
Q 220 Do you have any idea why the Government are not incorporating such a measure into the Bill?
David Smith: I am thinking they will.
David Cox: I think that something we have to factor in as well is the legislative regime versus actual market practice. For a landlord or a letting agent—I slightly disagree with your earlier point, David—we want longer-term tenancies, for the simple reason that that is the most efficient way of generating rent and fee income. A tenant who stays for a long time, is keeping the property in a good condition and is paying the rent on a monthly basis, or however often they pay it, is a tenant that you want to keep for as long as possible. That is why, when they have such a tenant and a renewal is coming up, the vast majority of landlords and agents will not increase the rent because they want the tenant to stay for as long as possible. Therefore, yes, the legal framework is a tenancy of a minimum of six months, but as long as both parties are content and are complying with their requirements, a tenancy can go on for as long as possible.
If I may just slightly disagree with your earlier point, David, agents will also want longer-term tenancies, because they take their fee on the initial tenancy. If the tenancy is renewed for a further 12 months, their fee usually halves or goes down more than that. Therefore, if it is a three-year tenancy, at an initial fee of 8% that then goes down to 4% if the tenant renews, they will be getting that 8% for the three years of the initial tenancy, not just the first six months. It is, therefore, in all parties’ best interests to have longer-term tenancies, but can we legislate where there is not the market demand? If the market demand was there, agents and landlords would be providing longer tenancies, but at the moment the market demand just does not exist.
Carolyn Uphill: I think we are all agreed that landlords are interested in providing longer tenancies, but it has to work. I do not have them with me, but we have some statistics from the tenant panel research we have done that show that the vast majority of tenants do not ask for a longer tenancy but, equally, that when tenants had asked for a longer tenancy a good percentage of the landlords had agreed to it. Very few landlords had refused them. So that is not the case in the majority of cases. I know that we always have a minority of problem landlords, which is what the rogue database is about, but the majority of landlords can be very accommodating, where it suits them. But landlords want to feel supported as well—not got at.
One point I would like to make is that although we support the legislation in its general principle, we are concerned about the secondary legislation and the guidance yet to be published. What landlords need to know is what is happening and when, so that they can plan towards that. We, as professional associations, want to help them and to give them information. Much as we want to work, and hopefully will continue to work, very well with DCLG, we would appreciate a little more notice of legislation.
Mr Jackson
Q 221 Going back to Mr Cox, I think we could spend all day discussing residential estate investment trusts. We will not do that, but I am sure that the Treasury has heard your comments. On the database, would you say that clauses 23, 24, 30 and 31 would be useful, in that as they are prescriptive in giving the powers to collate the data they will eventually drive out rogue landlords and, in particular, improve enforcement in the short term, which is an issue you have raised? Enforcement levels are poor.
David Cox: We can hope, and we have seen in the sales sector, that the banning orders have been effective. There is not a huge number on the list, and when it was given to Powys Council it bid £170,000, I think, to try to regulate the entire sales industry in the UK. That is not really feasible, but it is certainly doing the best it can. Hopefully, a banning order list will provide more clarity and certainty, particularly for tenants and landlords when they are considering which letting agent they should go with—if they are using one. It will mean that, to a large extent, local authorities will know who the people are and where they are, and they will be able to keep tabs on them. We want to ensure that the list is public so that agents are aware, when they look to recruit and to expand into new areas, of who to employ and who not to.
Mr Jackson
Q 222 If they give their correct names, which anecdotally is an issue.
My second and final point is that you have obviously read the whole Bill. Some evidence was given to us earlier by the British Property Federation about the build to rent fund, and about the fact that institutional investors, for some reason that was not clear to me—perhaps I am a bit obtuse—are not interested in putting their money into build to rent when there are starter homes on the large-scale site, whether they be flats or houses. Are you in a position to make a value judgment about that assertion?
David Cox: I am afraid I have not heard any evidence to that effect. At the moment, although there are several in the pipeline, only one build to rent scheme is functioning in the UK: the old Olympic park, which is now Get Living London. It works very well, and it has three-year tenancies as the standard, but it has caused problems for people trying to exit the tenancy, potentially to buy a property of their own or move overseas.
We want to see more institutional investment. Going back to the housing shortage, the large pension funds and other financial investment vehicles have the ability and resources to build the housing we need. They are much more likely to be at the more professional end of the sector. All of Get Living London’s staff are fully qualified through the only regulated qualifications in the sector. Therefore, they have the desire and the reputation. Large companies cannot have their brands tarnished by poor property management. Therefore, they will be at the more professional end of the sector. They give tenants higher-quality properties and higher-quality service. We want to see much more of that.
David Smith: We have actually made proposals to the Treasury to try to get smaller landlords to be more interested in a “build to rent to sell” model. We are effectively trying to move shared ownership from just the social sector into the private sector. We have suggested that the Treasury could expand the Help to Buy scheme to tenants who wish to buy their own homes, and possibly offer a capital gains tax reduction to landlords who reinvest that money in a new property. We are trying to kick-start a new concept of private landlords seeking to buy property to rent it to tenants, with the aim of selling it to those tenants and then buying other new property in a continuous cycle.
Our view is that it is important to do everything. So many homes are required that simply throwing all our eggs into one particular sector is not going to work. We almost have to take a scattergun approach—although that is an unfashionable thing to do—and promote as many possible ideas as we can, provided they do not cost a vast sum of money, to get as many properties as possible. Once we have tried a lot of things, we can start to core it down to the ones that are the most effective.
Peter Dowd
Q 223 I suppose the point about regulation relates to rogue landlords. As a health and care professional, I pay an annual fee for my regulation, and if I practise inappropriately I am challenged. Is there any reason why that ought not to happen in relation to landlords, for example, with application to rogue landlords?
David Cox: Absolutely not. We have been campaigning for it for 20 years, and we are the closest there is to a regulatory body in the lettings industry. We do our best to regulate our members, and we would like to see a statutory footing for that. We are, of course, talking about people’s homes. For landlords, it is probably the largest investment they will make, beyond the house in which they live.
The Chair
Thank you, Mr Cox. Thank you to our three witnesses.
Ordered, That further consideration be now adjourned. —(Julian Smith.)