Westminster Hall

Tuesday 20th March 2018 Westminster Hall

Tuesday 20 March 2018

[Sir Roger Gale in the Chair]

Local Infrastructure (East Midlands)

Tuesday 20th March 2018 Westminster Hall

09:33

[Lee Rowley (North East Derbyshire) (Con)]

I beg to move,

That this House has considered investment in local infrastructure to secure new homes in the East Midlands.

It is a pleasure to serve under your chairmanship, Sir Roger. I welcome the opportunity to debate this important topic, particularly from a regional perspective, with Members from all parties who have joined us. I welcome the hon. Member for Chesterfield (Toby Perkins), my constituency neighbour, and the hon. Member for Nottingham North (Alex Norris). I welcome everybody on the Government side, from my right hon. Friend the Member for Derbyshire Dales (Sir Patrick McLoughlin) to my hon. Friends the Members for Charnwood (Edward Argar) and for Northampton South (Andrew Lewer), as well as everybody else who is not from the east midlands but who has come to listen to this important debate none the less.

We all know that the United Kingdom faces a huge house building challenge over the coming years. With a growing population and strong economic growth over the last two decades, the number of houses built in this country has lagged behind the number needed to ensure that people have access to affordable homes to rent or buy to live in. The ability and aspiration to own a home, or the ability to rent a decent one, are a cornerstone of our democracy. It is usually the largest purchase that we ever make, and it roots us in our communities, gives us control over the place in which we live and allows us over time to accrue the capital that gives us the freedom to do as we wish in our lives.

Despite having cautioned against it in a previous debate, I will refer to polling to make my argument. Polling consistently shows that, given a free choice, 80% to 90% of people would ideally like to own a house if they could. Interestingly, that desire has only increased over time. According to Ipsos MORI’s long-term tracker, those born before the wars were slightly less likely to aspire to own a home than those in subsequent generations.

However, the aspiration to own a home does not always equate to the ability to do so. Home ownership rates have been falling for a number of years; according to the labour force survey, just under two thirds of people were homeowners at the end of 2016, compared with nearly 70% 10 years earlier. Although home ownership rates have been higher in the east midlands than in the country as a whole, they have also drifted down slightly over the past 10 years, from just over 70% to just under it.

Although that headline movement is challenging enough, the actual distribution of that ownership has also shifted significantly over the past 10 years between different groups of people in our country, particularly by age. One of the most concerning trends is the reduction in home ownership for people my age and below. The likelihood of owning a home for those aged between 18 and 34 has fallen from more than half in 2006 to just over a third.

Capitalism works only when someone has the ability to accrue capital. For too many people at the moment, particularly those in the younger generation, their aspiration to accrue capital is not matched by their ability to do so. We all know that we have a problem; it has been debated many times in this place. Although the roots of all problems are usually more complicated than they look, there is a general acceptance that the issue here can be diagnosed: demand remains, but supply has fallen behind. As the Secretary of State stated in his housing White Paper earlier this year:

“This country doesn’t have enough homes. That’s not a personal opinion or a political calculation. It’s a simple statement of fact.”

The population is growing—by some estimates, more than 210,000 households are created every single year—yet the number of new houses being built has not kept up with that demand in any meaningful way for a number of years. In fact, until last year it was more than a decade since that number was hit. To find a time when we consistently exceeded that volume of 210,000 homes, we have to go much further back. Last year we had a breakthrough, with 217,000 new homes built as part of the Government’s target of achieving 1 million new homes by 2020. I welcome that, but we know that we have a significant amount of work to do to rebuild and to realise the home ownership aspirations of so many of our constituents.

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Gentleman for securing the debate. The specific topic does not relate to my constituency, but the general issue resonates with me. Does he agree that not only does investment provide affordable homes for families in desperate need, but the actual construction of the homes, which perhaps we do not focus on, provides jobs and an influx of spending power into the local economy? There are two wins: houses for people who need them, and jobs that boost the economy.

[Lee Rowley]

I completely agree. House building is important for home ownership and for helping people to rent and put down roots, but also for the economic growth and the jobs that come with house building in the first place.

There is a general consensus that increased house building is needed, both to house our growing population but also, I hope, to fulfil the home ownership aspirations I have talked about.

[Toby Perkins (Chesterfield) (Lab)]

I congratulate the hon. Gentleman on securing the debate. He made an important point about how long it has been since home ownership kept up with demand. The truth is that home ownership has never kept up with demand, except for those times when Governments have built a significant number of homes. It is not in the interests of the house building industry to satisfy demand. Does he see a greater role for arms of the Government—whether local government or others—in satisfying our housing crisis?

[Lee Rowley]

There is a consensus that more homes need to be built. There are many ways in which they can be built; some will be via state intervention and some will be via increased support for private building. I welcome them all. The reality is that we have to ensure that significant numbers of homes are built, and the Government are committed to that. The output is what is important to me, rather than necessarily the process, so long as the quality of those homes is at the level we want. The hon. Gentleman and I both know from our neighbouring constituencies that many of the problems with house building have come from houses that were poorly designed and built 30, 40 or 50 years ago, which we are now having to spend significant amounts of money rebuilding or renovating as a result.

In the east midlands, the aspiration to own a house, and therefore the need to build more houses, is just as fervent as it is in any other region of our country. That desire is propelled by the fastest growth rates outside London and the south-east, and by an underlying economic and industrial strength, which the region has always been proud of.

[Edward Argar (Charnwood) (Con)]

My hon. Friend is absolutely right to emphasise the importance of home ownership, and indeed the economic growth in the east midlands. However, communities in my constituency, such as East Goscote and Queniborough, are very concerned about the potential for speculative applications in the wrong places, due to the council temporarily falling below its five-year land supply, as the council would normally deem application in those villages to be inappropriate. Does he agree that the key to getting this right, and to ensuring local support for more housing, is to build in the right places, with the right mix for the area to meet local needs, not in places where the infrastructure simply is not in place to support additional housing?

[Lee Rowley]

My hon. Friend is absolutely right, and I will move on to that point later in my speech. I too have a number of villages in my constituency that are affected by speculative house building. The important point, which I hope is the message that will come out from this debate, is that we need more houses, but we need them in the right place and we need to have local community consent in order to ensure that they are built.

The east midlands benefits from its strategic location, its workforce, its skills base, its good strategic connectivity, its strong supply chains and its reputation. It is an area that gets on with it. It is one of those quiet, industrious and energetic motors of the wider United Kingdom economy. Unemployment is lower than the national average and employment is higher. We are privileged to be the home of great cities such as Derby, Leicester, Lincoln, Northampton and Nottingham. We have East Midlands Airport and, in my own county, world-leading manufacturers such as Toyota, Bombardier and Rolls-Royce.

Over the past 30 years, my constituency has transformed itself into a manufacturing, logistics and service centre. As somebody who comes from the area, I am hugely proud of that. We are propelled by small and medium-sized business, the aspiration to do well and the desire to succeed and take advantage of the opportunities before us. For example, the Worcester Bosch factory is home to 300 workers in Clay Cross, the second-largest town in North East Derbyshire. The factory has been in our area for many decades. A few years ago it had only 100 employees but, following investment, support and increased market demand, it now has 300 workers and the number of oil-fired boilers coming off its production line has increased from 30,000 to 50,000 a year. The factory is a market leader and is showing the drive, ability and verve that is the hallmark of the east midlands. We are a “get on with it” constituency in a “can do” region, supporting a growth-driven and aspirational country.

We are also making significant strides on housing. Last year almost 15,000 new properties were built in the east midlands. After the south-west, that was the highest number of completions in the UK on a proportionate basis, based on the existing number of households in our area. That is more than the north-east and the north-west, and—for a proud region with the usual healthy competition, I hope my hon. Friend the Member for Morley and Outwood (Andrea Jenkyns) will not mind my saying—more than our friends across the border in Yorkshire and the Humber. However, if we are to meet the Government’s laudable objective of increasing the supply of homes, and therefore increasing the proportion of our constituents who have the opportunity to buy a home, we need to continue to assess and debate the challenges that prevent that from happening. That is the purpose of this debate.

Housing is a controversial topic on the doorsteps of Eckington, Killamarsh, Dronfield, Clay Cross and all the other towns and villages in my part of the world. Most of the residents I speak to recognise and support the Government’s objective of building more houses and their recognition of the importance of ensuring that the next generation can aspire to own their own home and have the same opportunities afforded to them. Many residents have personal experiences of sons or daughters who cannot get on the housing ladder, or perhaps they themselves are years away from doing so. Some of that is solved laterally, by being willing to move a few miles further out than would be ideal, by being willing to wait longer, or by the famous bank of mum and dad—I have to admit that I benefited from that in a small way when I bought my first property a few years ago. The desire to own is real and it continues to burn bright, irrespective of age or the place in which we live. Yet there is also real frustration about the way the house building process works and how the planning process manifests itself in the localities.

[Alex Norris (Nottingham North) (Lab/Co-op)]

I congratulate the hon. Gentleman on securing the debate and the strong case he is making. Does he share my sadness that too often communities seem pitched against the developer and it becomes a battle of wills as to who will get what they want? One way around that, much in line with what my hon. Friend the Member for Chesterfield (Toby Perkins) said, might be for the community to be the developer through the local authority. The local authority would then have a greater stake in ensuring that the right infrastructure is in place to allow the development to live sympathetically in the community, because it will continue to have that relationship with the present and future communities.

[Lee Rowley]

I agree that communities and developers can often be pitched against each other—I have seen that in my constituency and will talk about it later. For me, it is not about who builds the houses; it is about the consent to build them in the first place. That is the challenge. We have a good planning system as a whole. I wholeheartedly welcome the Localism Act 2011, but the reality is that it has to be implemented locally in a way that works, and in my part of the world it is the council that has not taken the leadership over the past 10 to 15 years. We have not had a local plan in North East Derbyshire since 2005. I would argue, from my experience, that that is where the problem has been created, because it leads to speculative planning applications that completely undermine the cause of house building in our part of the world. There is also a failure of leadership to say where housing should or should not be built, which engenders the cynicism that can cause the kinds of problems that the hon. Member for Nottingham North (Alex Norris) has referred to.

In North East Derbyshire we want to build new houses—people accept that we need to build more houses. As the hon. Member for Nottingham North indicated, there is huge frustration in my part of the world about the local plan. We have been without a local plan since 2005—it has still not been updated, despite several attempts. North East Derbyshire District Council is one of only 15 local authorities in the entire country being called out for failing relating to their local plan. Over the past four years that has encouraged the kind of speculative house building that hon. Members have already referred to.

The beautiful village of Ashover in my constituency has been fighting speculative housing applications for four years. Its settlement limits have been pretty consistent for 40 years, yet a field that for centuries has been used for pasture and grazing will now receive 40 houses. That is not the fault of local residents, or because those residents do not recognise that more housing needs to be built, but because the council did not get its local plan in and the five-year housing land supply could not be evidenced, which meant that those speculative applications could be pushed forward. That community had decided through its own neighbourhood plan to find more houses than will be built on that field, which it was trying to save in order to preserve the overall look and integrity of the village. I find that very sad. There are many examples of that across my constituency, as I am sure there are in others. We have to get the local plan right if there is to be consent in the first place for the house building that we all know we need.

There is also frustration about the lack of infrastructure and forward thinking, because infrastructure sometimes comes only after the house building has begun. To some extent that is a function of the planning system, which we all accept and recognise is a necessity. I recognise that capital spending on schools, health and other public services is unlocked through the provision of housing in the first place, but it is the strategic infrastructure—the next level up—that is particularly important. Some of the problems are solved by the planning process, however imperfectly, but many are not.

In my part of the world, roads and railways are a real problem. Staveley, which lies partly in the north of my constituency and partly in that of the hon. Member for Chesterfield, is a former mining town that has huge potential and is seeking to regenerate and rejuvenate over the next 10 to 20 years, building on its proud mining heritage and industrial past. It has been looking for a bypass for many years—I believe that one has been in the works since 1927. If we want the bypass to be built before the proposal celebrates its centenary, we need to shout about it at country, regional and county level, and as MPs, so that it can unlock Staveley’s potential.

Let me give another example. In the south of my constituency, just outside Chesterfield, is a stretch of the A61 that has been congested for many years—since I was growing up in a nearby village. It has experienced a significant increase in traffic over the past 10 years. In truth, it is a problem that will be difficult to solve. The county council has introduced some welcome changes through the local enterprise partnership, but they will not solve the underlying problem: a road that cannot cope with the amount of traffic on it.

The fundamental point is that even though the council has messed up its local plan and we are not building as many houses as we need in certain parts of north Derbyshire, there are plots around the A61 for up to 2,000 houses over the next 20 years, including brownfield sites for new houses on the old Biwater factory in Clay Cross and on the old Avenue coking works near where I live. Although people often do not want houses built near them, people in my part of the world generally recognise that those are the places where they should be built: brownfield sites with lots of potential that were once engines of growth in our area and can be so again. However, there is no point in building 2,000 new houses to the south of Chesterfield and creating jobs for the people in them if massive traffic jams on the A61 are going to stop them from getting between the two. We need to take a coherent approach to these problems.

The south of my constituency also used to have several railway stations—even my small village was proud to have its own station when it was a significant mining area—but they have all gone. Over the past eight or nine years, the Government have looked into improving and recreating rail opportunities and have put new investment into rail where possible—the former Secretary of State for Transport, my right hon. Friend the Member for Derbyshire Dales (Sir Patrick McLoughlin), is sitting next to me. I think there is a case for a new station in or around Clay Cross. That has been an aspiration for several years, and I hope that we can make it happen.

Solving congestion on the A61, creating a bypass that has been in the works for more than a century, investigating the potential for a new commuter station in areas that will grow and improve over the coming years—these are the projects that we need to consider in my part of the world to give people confidence that we are putting infrastructure in place. Other hon. Members will have equivalent examples from their constituencies.

A few weeks ago, I took the Transport Secretary around the south of my constituency. We looked at the Avenue coking works and then went down to Clay Cross to see where the old station used to be, near Tupton. He was very interested, and I am very grateful to him for coming to talk to us about it. I understand that these discussions take time, and I do not expect solutions to come quickly, but we have to start talking about the options so that solutions can emerge in the long term. Later in the day I took him up the A61, and what happened? We got into a massive traffic jam, which did my job for me: as well as demonstrating the problem, it gave me the time to explain it. He was a captive audience, because we were sitting there moving at 0 mph—a problem that my constituents experience daily.

[Ian Paisley in the Chair]

I know that the Government are doing hugely encouraging things on infrastructure. Since 2010 they have been at the forefront of pushing the case for increased investment in the regions and spending on new infrastructure projects that will benefit millions of people—unclogging roads, building rail stations, renovating hospitals and expanding schools. To the Government’s credit, we have seen some of that in Derbyshire over the past eight years. A new train station at Ilkeston, just down the road from my constituency, opened a few months ago and is already thriving, demonstrating what can be achieved through strategic planning. Recent improvements to the M1—a key artery that serves our region and is so important for our economic growth—include an additional lane to increase capacity.

As east midlands MPs, we should be hugely ambitious about what we and our region can achieve in the coming years. The Government are making huge progress on unleashing our economic potential and building the housing needed to support it. The east midlands is often a victim of its own success and its quiet determination to get on and get going. We remain stubbornly low in our infrastructure spending, particularly on roads and rail.

I know that regional comparisons are often misused by Members of Parliament, who take narrow figures and extrapolate from them all manner of evils that have befallen their area. I have therefore used only figures that show the east midlands in a good light—what we are doing to outperform, rather than why we have such issues. However, I hope that the Minister will allow me to point out that the east midlands is the lowest funded region for transport per head of population. Much is being achieved, and more will flow from those achievements in the coming years, but just because in the east midlands we sometimes prioritise getting on with things rather than shouting about them, I would not want the Minister to think that the Government do not need to focus on our infrastructure needs and on how we can propel and power progress over the next 20 or 30 years.

All MPs have asks to make, and I am no exception. We all recognise that many others are asking for support and that some of them may take priority—I do not envy the Government their job. I am not sure that we will ever solve all the constituency issues that I have raised today, but I certainly want to see how we can mitigate and make progress on some of our congestion problems. For example, I want to work with our local councils to get the bypass moving in the north of Chesterfield and unlock the opportunity to bring thousands of proper houses and jobs there.

I know that the Minister knows that the east midlands is open for business. I know that he knows that we are doing our bit and will do more in future. However, I also hope that he will remember us when we talk about the need for further spending to continue our economic growth. We accept the need for more housing and recognise that it needs to be built in the right place, but the east midlands knows that it needs the infrastructure to support that new housing. The Government are doing much, but I hope and am sure that in the coming years they will look favourably on us and do more.

09:57

[Toby Perkins (Chesterfield) (Lab)]

It is nice to see you in the Chair, Mr Paisley. I congratulate the hon. Member for North East Derbyshire (Lee Rowley) on his speech and on securing the debate. He is right that many of the issues he raised also apply to my constituency.

The hon. Gentleman focused on the need to achieve more house building starts. I entirely concur. Chesterfield has had huge success in attracting new sites for house building, and I am proud to have seen many new house building starts there over the past few years. The old football ground is now a housing estate, imaginatively called Spire Heights; fortunately the Spireites have a good new ground. The old rugby ground, where I used to run up and down, is now a housing estate called Rugby Drive; we have a very good rugby ground to replace it. The GKN cricket ground is also becoming a new housing estate.

Chesterfield is a very attractive destination for house building sites, but it faces many of the difficulties between residents and developers that my hon. Friend the Member for Nottingham North (Alex Norris) raised. Interestingly, even on sites where just one or two houses are being built, there are often widespread problems. When it comes to getting planning permission, sometimes it seems more difficult to build two houses than 80 houses. That is a real issue.

It is important that we hold the Government’s feet to the fire on their record on house building. I find it incredible that a Conservative Government are overseeing the lowest number of new people becoming homeowners, as has been the case in recent years. It really is a significant flaw in the Government’s record.

I positively support the opportunity for people to get Help to Buy. A relative of mine is currently going through the process of getting on to the housing ladder through that scheme, and there is some value in it. However, there is a more fundamental issue, which I referred to previously: it is not in the interests of the house building industry for the number of houses being built to meet demand. We all know what happens if there is a shortage of supply—prices go up.

There is also a skills part of this conversation that has not really been referred to yet. At a time when far too many young people are in very insecure work and they do not have huge amounts of skills, it seems a tragedy that we are so short of the people who we need to be trained up in the construction industry. There is a skills part of this whole equation that is missing, and there is certainly a role for Government in that regard.

As a homeowner and mortgage-payer myself, I am not advocating in any way that we should try to orchestrate some kind of collapse in the value of house prices. However, there needs to be a recognition that if the average price of a new home is going to be six or seven times the average wage, it will be increasingly difficult for new people to get into the housing market. As I said in my intervention on the hon. Member for North East Derbyshire, there will be times when the house building industry is able to meet the level of demand, as it did at times in the early part of this century, but it many cases it will not. There is a role for Government there.

I entirely support people’s aspiration to own a home. I remember unlocking the door for the first time on the day I bought my first home, at the age of 22 or 23. I was a young man on a very modest wage, but I was able to afford a small two-bedroom cottage. It is a magical moment for someone when they buy their first home, so I do not ever want to undermine or underplay people’s aspiration to own their own home. However, at a time when there is so much homelessness and so many people are in insecure accommodation, we should recognise that there is also a real value to people securing their first council house and that council houses can also be a route towards home ownership. That part of the whole equation has also been lost.

In the debate on housing in the main Chamber yesterday, I said that the Government really should look at the issue of right to buy on brand new houses. That is because I know that in Chesterfield there will be a real desire to get more houses built; in a small way, the council are getting houses built. However, there is a real worry that if the council was to make a substantial development and get new people into all those new homes, within three or four years those houses would all be getting bought off and the council would be hundreds of thousands of pounds out of pocket. There is a role for Government in that regard.

Although I support right to buy in general as a principle, if councils were given a moratorium that said that in the case of new homes they did not need to have right to buy for the first however many years, we would actually start to see more houses being built. People would have a choice: they could either take up the opportunity to get a new council house that they recognise would not have the right to buy, or they could stay on the housing list for all the council houses that already exist, which are already massively over-subscribed.

That is something that the Government should think carefully about, as is allowing councils to borrow in order to build. If we are serious about ending the housing crisis but all we are doing is pushing the supply side and trying to make it easier for people to afford a house—even if there is some value in that—simply by effectively providing the deposit, then we will continue to fail to get the number of houses to meet demand. I urge the Government to consider more seriously the steps that can be taken to support councils to do more of this type of thing.

The hon. Member for North East Derbyshire also referred to infrastructure. Again, I do not find myself in disagreement at all with what he said about the need for infrastructure to keep pace with new housing developments. He alluded to a couple of specific infrastructure challenges that both his constituents and mine face on the A61 and the Staveley bypass, and I am very keen to work closely with him on both those issues.

I first came to Chesterfield when I worked at CCS Media, which was slap bang on the A61; it was just inside my constituency and on the border with the hon. Gentleman’s constituency. He is absolutely right to say what he did. Right back in 1990, I was sitting in my old Ford Cortina in exactly the kind of traffic jam that he took the Transport Secretary to see 27 years later. He is right to say that these key infrastructure problems exist.

The previous Government made a massive investment in junction 29A, which was a really welcome and positive step in generating hundreds of jobs out of Markham Vale. However, it is a shame that the work on the development of that junction did not continue through to include work at the Stavely bypass, which it should have done.

The Government need to be held to account on infrastructure spending. They came to power in 2010, at a time when all kinds of pressures were slowing the economy down. However, one of their first decisions—I still remember the former Deputy Prime Minister, Nick Clegg, and the former Chief Secretary to the Treasury, Danny Alexander, standing up to speak—was to cancel all the infrastructure spending. What we saw was two or three years in which all infrastructure spending was slowed down, and although the rhetoric changed from 2012 and 2013 onwards, the level of infrastructure spending in the period between 2010 and 2015 was pitiful. There is a real need for infrastructure, including transport infrastructure, and also for Government intervention in making sure that the people with skills are available, to make construction affordable and to get more houses and more civil engineering projects built.

I will also take up the point that the hon. Gentleman raised about the level of spending in the east midlands. In Chesterfield, we are slightly unusual in that we consider ourselves—I certainly do—to be northern but Derbyshire. The Government consider us to be from the east midlands, but, as I say, I think people in Chesterfield consider themselves more northern than east midlands.

Whatever people consider themselves, the truth is that the east midlands has been massively overlooked in terms of the spending. The hon. Gentleman referred to the amount of spending on both house building and transport. It is true that when someone from the east midlands comes down to London, they meet people who have 10 times more spent on their transport than people in the east midlands do.

There are a number of reasons for that. Part of it is that the east midlands does not fit neatly into successive Governments’ views about how to regenerate areas. I apologise in advance to my hon. Friend the Member for Nottingham North, but we are not a region where the cities dominate and where it is all about the cities. Actually, we are a region of small towns and villages, predominantly—much as Nottingham and Derby might like to think that they are the spoke in the centre of our wheel, they are not entirely.

I remember being at an event where we got east midlands council leaders together. Up on the top table, as was always the case, were the leaders of Nottingham City Council and Derby City Council, and sitting quite a way back from them was the leader of Derbyshire County Council. Of course, the leader of Derbyshire County Council has far more constituents than either of the other two, given the size of that authority. Nevertheless, successive Governments have seen the cities as the way to regenerate regions. There needs to be much more understanding both of the role that towns play and of the make-up of the east midlands. I entirely endorse the point made by the hon. Member for North East Derbyshire about the need for greater infrastructure spending in the east midlands.

[Edward Argar]

The hon. Gentleman is absolutely right to emphasise the importance of small and medium-sized towns, but I urge him not to forget Lincoln, Northampton and Leicester as key cities of our region, alongside Nottingham and Derby.

[Toby Perkins]

I have no intention of forgetting anything. I was perhaps more Chesterfield-focused but, yes, it is important to remember those cities. We should also remember that the surrounding area of Chesterfield, with north-east Derbyshire and Bolsover, is a fairly coherent unit that is basically the same size as Derby city but does not have anything like the same sort of focus.

I want to pose a challenge regarding the desire for politicians to get together. There was a real opportunity with devolution. The Government spoke about it strongly in 2015 but my sense is that it has been petering out since the 2017 election. I was disappointed that Chesterfield did not join the Sheffield city region. There was a coherent unit there that had a long-standing track record of attracting infrastructure spending and there was some real dishonesty about the debate on the whole matter. Notwithstanding that, there is no replacement Nottinghamshire-Derbyshire deal, and I think that exactly what I saw in the run-up to 2015 is what I have seen since: petty political infighting, meaning that our area is unable to punch to its weight, let alone above it. I urge all political leaders to get together to ensure that we get a devolution deal for the north-east midlands.

I again congratulate the hon. Member for North East Derbyshire on securing the debate and raising many important points. Our area really needs to start performing to its potential.

10:09

[Sir Patrick McLoughlin (Derbyshire Dales) (Con)]

I congratulate my hon. Friend the Member for North East Derbyshire (Lee Rowley) on securing the debate, moving the motion effectively and setting out clearly not just the problems facing his constituency but the solutions. Since he has been in this House, he has shown a positive way of working and of advocating for his constituency, which abuts mine.

I must admit that I do not quite recognise what the hon. Member for Chesterfield (Toby Perkins) said about infrastructure spending. Infrastructure spending overall in the east midlands—in the whole country—has been very positive and very large indeed. At the moment, massive work is going on at Derby station. There is a £200 million investment, and a new platform and new signalling are being put in. That is real investment for the future of the east midlands. Likewise, there has been a lot of investment in Nottingham station. When I was Secretary of State for Transport, I closed the station for six weeks one summer and saw men working all hours to complete the job in that time. A fantastic job was done.

I want to talk about two other large infrastructure projects. One is the upgrading of the A38 around Derby, which is due to start in 2019. That will be another £250 million, to deal with the three islands around Derby, and it will significantly improve the infrastructure as far as the city is concerned. Secondly, I was pleased to be in Nottingham at the final opening of the dualling of the A453—long awaited but delivered by this Government —and the improvements to junction 24 of the M1. Those are big infrastructure projects that we have seen in the east midlands and I think they will make a big difference. There is no doubt that the upgrading of the M1 to a smart motorway, at the moment between junctions 23 and 25—it has already been done between junctions 25 and 28—causes a lot of disruption, but the long-term benefit is important, including for the region. So we can say that we have had a good share of the infrastructure investment made by the Government.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jake Berry)]

Does my right hon. Friend, who has vast experience of infrastructure spending, agree that it is not realistic to compare spending in a city with spending in a region? If the figures are conflated, a misleading balance is often produced.

[Sir Patrick McLoughlin]

I completely agree with the Minister. There is always talk about the investment that goes on in London. At the moment, there is Crossrail, which is a big investment. It is a project that has been wanted in the city for more than 40 years. I was a junior Transport Minister when Cecil Parkinson first announced he had the go-ahead, and it will be completed by the end of the year. Yes, it distorts the figures as far as the rest of the country is concerned, but we in the east midlands should be pleased about Crossrail, because the trains that will go on it are being built by Bombardier. Projects such as Crossrail and HS2 are national projects and the thing to do is ensure that we get investment in companies right across the country. The fact that the Crossrail carriages are being built in Derby and will, hopefully by the end of the year, run on the Elizabeth line—the name of the Crossrail line—is a fantastic achievement and, what is more, a fantastic engineering achievement for our country. I want to pay tribute, in this year of the engineer, to those people who have been progressing the build and the design of Crossrail.

It is misleading for people to confuse the investment in London, saying, “We’re not getting the same as London”. The investment in St Pancras station is beneficial to the east midlands. I remember going there 20 years ago and at that time no one would have wanted to spend more than five minutes there, instead arriving just as their train was leaving. Now, for those arriving half an hour early it is a fantastic place to be, almost a destination in its own right. I believe that St Pancras station is good news for the east midlands, because journeys to the region from London start from one of the finest stations in the country—likewise with King’s Cross. We need to get that right.

Earlier this year, the Government announced some money out of their marginal viability fund—something from the housing investment fund I understand—dedicating £55 million to the east midlands for various schemes. Here I want to come on to something that my hon. Friend the Member for North East Derbyshire said. I ask the Government to consider how they say to local authorities that money will be made available for schemes that lead to housing development. On the Staveley bypass, my hon. Friend said there would be housing development within the scheme. When I was Secretary of State for Transport, I had something called the local pinch point fund. It was £170 million in one year and was allocated on the basis of developers and local authorities coming forward with plans for road improvements of up to £10 million, which would lead to either more jobs or more housing. That seems a little like the marginal viability fund. I say to the Minister that sometimes such things are overcomplicated and should be much more straightforward and that future plans should be made available.

Seeing as we are all plugging our own schemes this morning, one scheme I would like to see—I am sure my hon. Friend the Member for North East Derbyshire will not mind me saying this—is the Ashbourne bypass. It would fit well into this particular project. It has already been partly bypassed on the A52, but the bit that links the A52 up to the A515 still needs to be done. If that scheme took place, that would lead to more housing development in the corridor where the new bypass would be.

It is important that we get the whole question of large-scale infrastructure investment right so that the region has the ability to attract business and companies. In the east midlands, we should not sell ourselves short. If we look at the Derbyshire, Nottinghamshire and Staffordshire borders, we have world-class engineering in Bombardier, Rolls-Royce, JCB and Toyota. They are world leaders and world-beaters in engineering. There is no doubt that is important for the prosperity of the area.

I ask the Government to be more open about when the other funds will be available. Shovel-ready schemes are important so that work can be started and got under way very quickly. The annoying thing that people get really angry about is that plans for housing development seem to take forever before the houses get built. Also, having given planning permissions for schemes, I know that more attention should be given to what money goes locally, such as to local schools. Sometimes the funds available are kept a bit too quiet and not too public.

I take issue with the hon. Member for Chesterfield only in so far as in the 30 years I have been in the House of Commons, I have not seen infrastructure investment in the east midlands like that we have seen over the past few years and will see in the future.

10:21

[Andrew Lewer (Northampton South) (Con)]

It is a pleasure to serve under your chairmanship, Mr Paisley. I am pleased to participate in this debate on such an important topic as housing, infrastructure and local government. It was introduced by a very close political colleague and friend, my hon. Friend the Member for North East Derbyshire (Lee Rowley). I refer to my entry in the Register of Members’ Financial Interests.

In the midst of Brexit negotiations, we should not forget the urgency of local matters that affect our constituents so much. That was proved by the Chancellor when he announced the Government’s commitment to a total of £44 billion of capital funding, loans and guarantees to support the housing market through to 2022-23. Reforming the housing sector is a priority of the utmost importance to the UK. The goal is to deliver 300,000 net additional homes a year by the mid-2020s, which will be the highest level since 1970. Some of the strategies that are part of this grand sectoral investment have already started, such as the £5 billion housing infrastructure fund. That fund is expected to deliver 200,000 new homes. Last month, the £866 million first wave of the fund was announced. The home building fund, which was launched in 2016 and was increased in the 2017 Budget, is set to deliver 88,000 homes. As of December 2017, the fund had contracted 153 schemes, worth more than £1.4 billion in loan funding.

Broadening the perspective, not enough significance is allocated to how transport infrastructure impacts on the housing crisis, hence the great value of this debate. Transport infrastructure is fundamental in delivering housing supply and in determining the type of housing provision, which can vary from the car-based, pollution-intensive, sprawling, isolated suburban extensions to sustainable, safe, people-focused and well-planned communities. Reliable transport networks are essential to that growth and productivity, which is why the Government are delivering the biggest investment in railways since Victorian times. A total of £40 billion will be invested between 2014 and 2019, and that will benefit millions of passengers across the country. It will mean more trains, more seats and better stations. My right hon. Friend the Member for Derbyshire Dales (Sir Patrick McLoughlin) has already talked about that in concrete terms.

That is the broad infrastructural sweep, but what about the east midlands and Northamptonshire in particular? The importance of strategic planning cannot be stressed enough, but homes are about people. The involvement of the local community and other organisations and groups is essential in helping local councils to shape a local plan and prevent the purely top-down imposition of housing and infrastructure that would not be right for that area.

Regarding my constituency of Northampton South, I am pleased to say that in February, the borough council cabinet agreed that the council and Northampton Partnership Homes should build or acquire around 1,000 homes, including affordable rented housing, market rented housing and housing for sale over the next 10 years. The council has requested a meeting with the Ministry to explore ways in which the Government can help and support the council in its efforts to maximise the supply of new homes in Northampton within that scheme and more broadly. There are positive prospects to look forward to with forthcoming major investment projects in my area. They include: the Northampton growth management scheme, the north-west relief road, the Sandy Lane relief road, the Daventry development link and the Towcester A5 relief road. That adds up to more than £118 million in funding.

To be hugely topical as a Northampingtonshire MP, there is a case, very much added to by the particular circumstances of Northampton—it is not an uncontroversial topic—for looking at local government reform to facilitate more joined-up and efficient provision of much-needed housing growth with properly co-ordinated and functioning infrastructure. As discussed at length in ResPublica’s report, “Devo 2.0—The Case for Counties”, devolution should expand beyond cities and advance the reform of local government in the counties. I was a district councillor for 12 years. For my sins, I was on a planning committee for 11 of those. I was a cabinet member. I was a county councillor for 10 years, and that included time leading Derbyshire County Council. As well as being deputy chairman of the Local Government Association for many years, I have been its vice-president since 2014.

I am proud of the achievements of the local government membership, as I am sure many people in two-tier district and county areas are. Those who served on urban district councils and rural district councils can be proud of their achievements in their era, but it is no disrespect to that former era and the work that went on in local government under the previous structure to say that it may have had its day and a change is needed. Population growth has been a challenge that has been hard to deal with in some of the two-tier areas. Some 60% of single-tier county areas were able to meet demand and provide homes for at least 95% of new households with an average population growth of 5,100. However, only 30% of district councils in two-tier areas were able to meet the same target, despite having average growth of only 1,750. It is not just about numbers. We heard recently in the Communities and Local Government Select Committee, as it was then called, about how housing and social care functions being together has helped Sunderland deliver better services for older people. Such synergies are clear with transport and housing.

I became a twin-hatted councillor for 10 of those 12 years to prevent responsibilities from being passed from pillar to post, where people say things like, “On-street is county. Off-street is district”, or, “We are a waste collection authority, but they are the waste disposal authority”, or, “Yes, we do libraries, but they do leisure centres.” With hard choices ahead of us and the need to fully engage the community, there is a democratic and administrative case to be made here when housing pressure is so great. As was rightly stated in the report I referred to, the collecting authority does not have an incentive to ensure that it receives the revenue needed to deliver infrastructure investment through section 106. The top-tier council is responsible for infrastructure, but the lower-tier council is in charge of collecting contributions from developers for infrastructure projects, and failure to collect that contribution limits the activity of the top-tier council. Nevertheless, developments continue to get approved without always necessarily having the right funds.

Another problematic aspect is that although services drive costs and go hand in hand with planning, it is not the planning authority that has the responsibility for the bulk of the ongoing costs as a result of the development. For reasons that are well known, Northamptonshire is right in the middle of this debate. The Dorset proposals, which have some genesis in the time that I spent writing the LGA peer report on Dorset in 2013, are starting a change away from a unanimity requirement towards some more rapid change in local government structures. I do not think people have cottoned on to how big that is and how quickly it will happen. In Northamptonshire, we have Cheshire as our potential model of two unitaries.

Bigger is not always better. We would not have any councils at all if we extended that principle too far. The economies of scale argument can be tested to breaking point. It is also important to keep the history. Cheshire is still Cheshire, and Northamptonshire will still be Northamptonshire, so this is not about the 1974, Edward Health-style policies of creating fictional counties that no one had any connection or association with, such as Avon and, particularly pernicious, Hereford and Worcester. We need to look to functional economic geography and thus to the heart of the debate on joined-up infrastructural housing and local feel and needs, and yes, making those savings as well.

Oxfordshire, for instance, has claimed that a move from a two-tier authority to a unitary would not only increase local accountability, but an independent study has estimated that it would save £100 million over the first five years to enable that council to boost housing and infrastructure.

Once the more coherent network of unitary authorities is set up, local authorities in England need to be more sovereign, more respected and less lorded over by central Government than they have been for many decades. That will incentivise strong leadership, high standards of accountability and therefore better delivery of housing and infrastructure. The investment announced by the Government is a great commitment to helping solve the housing crisis, but part of the solution to the problem is also local. In my time as a Member of the European Parliament, I saw how places in Denmark and Holland have a completely different relationship and respect level between national and local government. In leaving the EU, we must not turn away from best practice elsewhere or turn inward or, worst of all, turn Whitehall-wards. We need to really respect such practice from elsewhere and learn from it.

In this debate we have heard, and will hear, about different pressures and needs regarding housing and infrastructure across the east midlands. They are different in different places. The solution, as far as there ever will be one, is a serious commitment to localism.

10:33

[Tony Lloyd (Rochdale) (Lab)]

I congratulate the hon. Member for North East Derbyshire (Lee Rowley) on securing an interesting debate that has covered a huge range—from Sandy Lane all the way through to Crossrail and investment in St Pancras. There have been important contributions across the piece on which I will comment as I go along.

Housing has shot up the political agenda dramatically. My own party has been banging the drum for some time, but it is good that the Government are beginning to talk about the fundamental importance of housing both as a social and an economic driver. That must be welcomed. However, we are still not where we ought to be: intelligent public policy, mixed with the private sector and working with local government. The hon. Member for Northampton South (Andrew Lewer) has already mentioned the importance of local government in the mix.

We ought to have a policy of housing replacement. The hon. Member for North East Derbyshire referred to the fact that in the east midlands there is a higher rate of housing formation than in most other parts of the country, but it will still take 135 years for it to replace its existing housing stocks. Houses that were built 50 years ago will not last the next 85 years, so we have to do massively better.

We need a mix of housing, but we do not have that in the east midlands. Of the roughly 15,000 new homes built in 2015-16, the overwhelming majority, 12,500, were built by the private sector for owner occupation. Some 2,000 were built by housing associations, but they are often for sale as well. Only 200 were built by local authorities. That does not provide the housing mix that allows people to be properly housed.

In Derby, for example, the average house price is just short of £170,000. Someone needs an income of £37,000 to £40,000 to service such a purchase, and that is above the levels of income typical in large parts of the east midlands. We know there will always be a need for social rented accommodation and we must see local authorities as part of that mix. I endorse the words of my hon. Friend the Member for Chesterfield (Toby Perkins) about the need to look at the right to buy and how councils build houses that simply disappear from the stock. We must at least see adequate replacement.

We must recognise that houses are people’s homes in their own communities. That emphasises the importance of infrastructure. If we do not integrate the planning process and make infrastructure an integral part of planning for people’s homes, then we miss a huge trick. That means public involvement because only the public sector can have such a planning framework. However, there are problems with that.

People who know my background are aware that I spent time working on the devolution agenda in a very practical way. I profoundly believe that there should be devolution from central Government, who have been far too centralising. Frankly, Government Department does not talk to Government Department; it is much easier at the level of a Northamptonshire or Derbyshire local authority.

For the sake of brevity, I will not name every east midlands county. Localism is important for coherent planning. It is possible to integrate, although I recognise there are difficulties and different arm wrestles between counties and districts. I will not get into the local government reorganisation debate, but devolution is fundamental to the delivery of good infrastructure. We are not there yet across the country.

We must also recognise that the Government are preoccupied with London. I disagree with the right hon. Member for Derbyshire Dales (Sir Patrick McLoughlin). Crossrail might be necessary for London, but London should not get the lion’s share of investment too often, whether it is for transport or across the piece. Of course the national capital is economically important, but we do not have a balance. It is not reasonable for public infrastructure investment in the east midlands to be only half that of London. In terms of economic investment, for example, it is only a third of that that goes into the national capital. That is not efficient for the nation’s economy.

Hon. Members have rightly emphasised the importance of the industrial traditions of the east midlands. I have studied and worked in the east midlands, so I am well aware of both the challenges and the opportunities. To liberate the capacity of that industry, we need public investment on a more equitable footing. The Government have to begin to rethink their allocation processes. Interestingly, in the week when the Government re-committed to Crossrail 2, they announced that the electrification of the midland line would not go ahead. That was a symbolic and interesting commentary on the Government’s priorities.

[Sir Patrick McLoughlin]

From the hon. Gentleman’s previous experience in Manchester, he will know that HS2 and the whole concept of the Northern powerhouse, which was pushed heavily by the previous Chancellor, are very important. In the hon. Gentleman’s area, there will be one of the biggest upgrades of Northern Rail in the next eight or nine months, with brand new rolling stock—something that was completely missed out when the last franchise was awarded under the previous Labour Government.

[Tony Lloyd]

Today’s debate is not about the north of England, but clearly I welcome what the right hon. Gentleman has mentioned. However, I do not just live in the Greater Manchester area; as I travel around, I recognise that we have a long way to go. I recently travelled between Manchester and Nottingham, and the journey was frankly worse than many decades ago, when I lived in Nottingham as a young man. We have to do better. [Interruption.] It was many decades ago—hon. Members can check the record. The investment in St Pancras is welcome, but it has not been mirrored by the same kind of investment in Nottingham station. It is not of the same quality as our London stations.

Another issue is the atomisation of local government. I was talking to the deputy leader of Derby City Council recently, and he made the point that the building control and planning departments in his city council have been eroded over recent years, and that is typical of every local authority across the country. I welcome the fact that there will now be an increase in fees in this area, but the skills infrastructure in our local authorities has declined, and it will take time to rebuild that. We need to recognise that if infrastructure is destroyed, it takes time to rebuild it.

My hon. Friend the Member for Chesterfield made the point that we have the same issue with the skills mix in the construction industry. In the east midlands, we simply do not have the skilled workers for the great leap forward that we need. Those are major issues that we have to look at. Another issue that the Government have to address on infrastructure investment—this is another point that the deputy leader in Derby made to me—is that when Derby, for example, is trying to match its schools with its housing developments, because all new schools have to be academies and therefore delivered outside the local authority framework, a much more complicated balancing act is now needed to incentivise local people to look at section 106 funding to erect the structure for a new school to be built. That is not the right way to plan. We need better mechanics for our planning.

Statistics on the level of infrastructure may be misleading, but they are an important comparator. As a nation, we do not invest in our infrastructure. The World Economic Forum said recently that when it comes to infrastructure quality we have slipped from 16th place to 24th between 2006 and today. That is a major issue if we are to attract the inward investment into the east midlands and other parts of the country. Even the Government’s present plans for infrastructure spending—about 2.8% of GDP—are below the OECD’s recommended level of 3.5% internationally. We are falling behind even now, as the economic tide has changed after the global crisis. We are still lagging behind the levels of infrastructure spending that we need.

Within that, the east midlands does badly. Hon. Members on both sides of the Chamber representing communities in the east midlands should be jumping up and down on that issue. The spend on transport infrastructure in the east midlands is some 49% of the national average. That is a long way short of what the east midlands needs for the local schemes that Government Members have talked about. The spend on health is only 79% of the national average; on schools, it is some 78%. At important levels, the east midlands is sliding behind what the nation as a whole can deliver. Hon. Members ought to be concerned about that.

East Midlands Councils, in its committee report, said:

“The recent trend has worsened…and in summary, Government statistics demonstrate that in 2015-16, the East Midlands has…The lowest level of public expenditure on ‘economic affairs’…The lowest level of public expenditure on transport, in total and per head…The lowest level of public expenditure on rail per head…The 3rd lowest on health care…The 3rd lowest on education…The 3rd lowest total of public expenditure on services, in total and per head.”

Frankly, if I were an east midlands MP I would be saying to the Minister, “It’s not good enough. What are you going to do about it?”

The fundamental issue, which comes back to the important speech made by the hon. Member for Northampton South, is that central Government will never provide the joined-up structures that we need to deliver the infrastructure development that will liberate the houses of the future. With no disrespect to the Minister, he covers a huge range of issues. A Treasury Minister probably ought to be responding to today’s debate, if we are to see real join-up in central Government. We also have to give our local communities, through their local elected representatives, the capacity for strategic planning both to build housing consistent with local communities, and to plan public infrastructure, so that schools, hospitals, health services, roads, and transport systems are provided for those houses and those communities.

This is a very important debate, and I congratulate the hon. Member for North East Derbyshire on securing it.

10:39

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jake Berry)]

It is a pleasure to respond to this debate. In line with tradition, I intend to leave my hon. Friend the Member for North East Derbyshire (Lee Rowley) a minute or two at the end to wind up.

I will rattle through some of the contributions. First, I congratulate my hon. Friend on introducing the debate, and on the elegant and forceful way he put the case for his constituents. He is the first Conservative Member of Parliament for his constituency since 1931 and, my goodness, he is doing a fantastic job. It was great to have a contribution from the hon. Member for Strangford (Jim Shannon), and I know that my hon. Friend the Member for Cannock Chase (Amanda Milling), as a Government Whip, has been champing at the bit to champion her constituency. She took the opportunity over the weekend to lobby me about Rugeley power station. In addition, the electrification of the Chase line—something I know that she has been a huge advocate for—is a great demonstration of the Government’s investment in infrastructure. My hon. Friend the Member for Charnwood (Edward Argar) made a great contribution, showing that the fox’s county still has a couple of wags left in its tail when correcting the hon. Member for Chesterfield (Toby Perkins), saying that he had forgotten Leicester. It is unfortunate that my hon. Friend has gone to wag his tail somewhere else for the conclusion of the debate.

The hon. Member for Chesterfield spent some time castigating the Government for the number of houses that we are building. I gently point out that we inherited a housing system in which we were building fewer houses than we were in the 1920s, because of the recession caused in part by the Labour party. Recently, we have seen figures showing that the number of house-starts in construction increased by more than three quarters between 2009 and 2016. Just a few weeks ago, the Halifax survey showed that the number of first-time buyers is at its highest for 10 years.

The hon. Gentleman also spent some time saying that we should address youth unemployment and skills. I am pleased that we now have more people in employment than at any time since the 1970s, particularly with the introduction of T-levels and the Government’s drive to create 3 million high-level apprenticeships. That will ensure that young men and women come through our education system with the necessary skills to build an economy fit for the future.

My hon. Friend the Member for Northampton South (Andrew Lewer) talked about devolution. I would happily have an entire debate devoted to that subject. In my view, devolution should be the golden thread of Brexit. When more than 60% of my constituents voted to leave the European Union, they did not do so to bring more powers back to Whitehall; they wanted to bring more power back to themselves and, in my case, to east Lancashire. Of those areas that voted remain, the vast majority—London, Manchester, Liverpool, large parts of Wales and Scotland—already benefit from devolution, which shows that where people feel more connected with local government and government in general, they were, in my opinion, more likely to vote to remain in the European Union.

My hon. Friend the Member for Northampton South also correctly pointed out that there is huge pent-up demand for devolution and for local government reorganisation. Eric Pickles famously said that he had a nickel-plated, pearl-handled revolver in his desk drawer for the first MP to come and ask him about local government reorganisation. Recent progress in that area shows that the Government’s position has changed and we would now welcome discussions from any area about local government reorganisation. That big change, led by Dorset, may be the trickle that leads to a torrent.

My right hon. Friend the Member for Derbyshire Dales (Sir Patrick McLoughlin) delivered a masterclass on transport and infrastructure. I was interested to hear how he has made himself massively popular by closing Nottingham station for six weeks—I am sure that was a pretty difficult thing to do. His point about housing infrastructure having to come before development, in order to support development, reflects a lot of the debate today. There are legitimate concerns about whether buses can take the capacity of new houses and whether local primary and secondary schools have the capacity. That is exactly why the Government set up the housing infrastructure fund; it is an acknowledgment that people want infrastructure first. That is what we are doing.

The announcement of the second phase of bids to the housing infrastructure fund is due to take place tomorrow. I say to all right hon. and hon. Members whose areas have submitted a bid that, even if the bid fails, Homes England has committed to continuing to work with areas to bring forward both the infrastructure and the housing development of the good bids.

My right hon. Friend the Member for Derbyshire Dales will of course be aware that our right hon. Friend the Member for West Dorset (Sir Oliver Letwin) is working on the Government’s plan to bring forward sites for development. It is a common problem across the country that people refer to anecdotally, saying that there are more planning permissions granted in their area than are being built out. Our right hon. Friend is looking at how we can tackle that issue.

I agree with comments from the Opposition spokesperson, the hon. Member for Rochdale (Tony Lloyd), about the idea of replacing housing. It is a very interesting area. Houses built in this day and age do not seem to last as long as the fantastic Victorian terraced houses that I have across my constituency. Of course, I remind the hon. Gentleman that when the Labour Government left office in 2010 there were 400,000 fewer social homes than there were when they took office. I would have hoped that they would spend a bit more time devoting themselves to delivering social homes, rather than removing them from our national housing stock.

The hon. Gentlemen used the issue of house prices in Derby interestingly and well to demonstrate the crisis in affordability. It neatly demonstrates that the housing crisis is a national crisis. When people talk about the focus that the Government are putting on tackling the housing crisis, all too often they talk about the housing crisis as being a problem in London. It clearly is not; it is as much a problem in the midlands engine or the northern powerhouse as in any other area of our country. Through the £5 billion in the housing infrastructure fund, the changes we are making to the national planning policy framework and other matters outlined in the housing White Paper and the Budget, we have set out an absolute determination to tackle the housing crisis not just for London and the south-east, which we have talked about a lot today in terms of spending, but for our entire nation and constituents all over the country.

With that in mind, on 1 February the Government announced the first wave of funding from the housing infrastructure fund: some £886 million for 133 local projects. I am delighted to say that £55.2 million of that went towards 49 projects in the east midlands, which shows how we are using housing infrastructure to drive development. It includes £2 million to Sleaford West to unlock 1,400 new homes, creating a new roundabout to unlock development; £3.6 million to the Desborough North project, creating 700 new homes, where the housing infrastructure paid for a school and community facilities; and £2 million to Hogshaw and the Granby Road sites in Buxton, which released 675 new homes by making new road junctions and improvements.

My hon. Friend the Member for North East Derbyshire mentioned the A61 corridor. He raised specific concerns about that corridor. From the Ford Cortina traffic jam to the Secretary of State for Transport traffic jam, the problem is obviously ongoing. We are taking action and have given £1.9 billion to the midlands through the local growth fund, which includes support for transport connectivity, as well as skills and support to grow the local economy. Some £257 million of that funding was earmarked for the D2N2 local enterprise partnership, which has been putting that money to good use, including by investing £12.8 million in improvements to the A61 corridor into and through Chesterfield. That will improve infrastructure and unlock opportunities for major housing development, including some of the houses we have discussed today, and the growth of Chesterfield and North East Derbyshire over the months and years to come.

A good way of demonstrating that commitment is the Avenue project in North East Derbyshire, which my hon. Friend referred to. I will conclude with that example because it is a particularly pertinent example of good practice. The project is located in Wingerworth—I am sure my hon. Friend will tell me after the debate whether I have pronounced that correctly—on a former coking works, once described as the most polluted site in the entirety of England. A completion ceremony is taking place on the site this very morning to mark the end of remediation and the new chapter of building homes. With support from Homes England, the site has been transformed and will deliver 489 new homes, all starting in the spring, a new primary school, 2.8 hectares of employment land, road improvements, including new access to the A61, and a wildlife habitat and country park.

That example, one of many we have heard about today, is a demonstration of how this Government, together with Homes England, working in partnership with local authorities, are prioritising the delivery of homes. My hon. Friend started the debate by saying that it is still an ambition of people across this country to own their own homes. I absolutely agree. When I travel across the country, people will say that what they most desire to be able to afford is their own home. The Conservative party is the party of home ownership and this Government are on the side of all those aspirational young and old people who would like to own a home in the east midlands.

10:58

[Lee Rowley]

I thank everybody who has contributed today. It has been a positive debate that occasionally deviated into much larger areas around policy and housing for the future. On the whole, the message from the debate is clear: the east midlands is open for business and wants to get on. To help us get on with getting on, we need infrastructure support, which we are getting and need to continue to get in future.

I welcome the Minister’s comments and I thank him for his support in many of the areas we have discussed today. He is absolutely right that if we are to get this moving and ensure that regions such as the east midlands can move forward in the way that we all hope, devolution is vital. I look forward to supporting additional devolution measures when they come forward, and changes to governance structures where necessary, as my hon. Friend the Member for Northampton South (Andrew Lewer) indicated.

I am very pleased with the discussion today and grateful to all hon. Members for making the time and taking the opportunity to talk about the issue. The Minister spoke about the Avenue project, which is a crucial project in my part of the world. In order to bring forward more Avenues—more brownfield sites that were once the most polluted parts of the country and can now bring forward the kinds of homes we need to support the aspiration of home ownership—we need support for infrastructure. I know that the Government are committed to doing that and that there will be more Avenues in future, consented to and supported by local people, because they will see the benefits of the economic growth that they can bring to the local area, helped by the infrastructure support from the Government.

Question put and agreed to.

Resolved,

That this House has considered investment in local infrastructure to secure new homes in the East Midlands.

Truth and Reconciliation Commission: Sri Lanka

Tuesday 20th March 2018 Westminster Hall

11:17

[Paul Scully (Sutton and Cheam) (Con)]

I beg to move,

That this House has considered the establishment of a truth and reconciliation commission in Sri Lanka.

It is a pleasure to serve under your chairmanship, Mr Paisley. I am delighted to be joined by fellow members of the all-party parliamentary group for Tamils. The turnout represents the depth of feeling, particularly among the Tamil diaspora, in our constituencies. Yesterday, I led a debate in this Chamber on cystic fibrosis, which was the first time I have seen it with standing room only. The fact that there are fewer Members here for this debate does not negate its importance. Every Member in this Chamber represents many thousands of members of the Tamil diaspora, who remain concerned about what is happening in Sri Lanka and the Sri Lankan Government’s slow progress in meeting the terms of UN Human Rights Council resolution 30/1, which the Sri Lankan Government co-sponsored.

[Tom Brake (Carshalton and Wallington) (LD)]

I thank the hon. Gentleman for securing this debate. He is right that there is all-party agreement on this issue. Does he agree that one of critical things we need from the Sri Lankan Government is a commitment to the timescales by which they will have delivered the commitments they have made?

[Paul Scully]

I thank the right hon. Gentleman for that intervention. I absolutely agree. One of the things we need to say today is that we are nearly three years into this. Resolution 30/1 has been extended for a further two years, and we are halfway through that intervention. None of us wants to reach an impasse in a year’s time and go back to the UNHRC in Geneva to say, “Okay, guys, what has happened? Nothing.”

When the all-party group spoke to the Minister a little while ago, we said that if we get to this stage and still not much is happening, alarm bells will ring. I remember asking the Minister what the alarm bells meant. The hon. Member for Ilford North (Wes Streeting) and I went to the UNHRC, and there seemed to be a sense that there is not a lot it can do, which is slightly concerning.

[Joan Ryan (Enfield North) (Lab)]

I congratulate the hon. Gentleman on securing this debate and on the work he is doing as chair of the all-party group. Although not much is happening and the UNHRC does not seem able to move forward, there has been appalling sectarian violence in Sri Lanka in recent weeks, which has resulted in the imposition of a state of emergency for the first time in seven years. Does he agree that, unless the Sri Lankan Government finally tackle the culture of impunity on the island and provide a genuine reckoning with the past, which I think he is arguing for, the country will be unable to lay the foundations of a sustainable peace?

[Paul Scully]

I thank the right hon. Lady for that intervention. I apologise to hon. Members that this is only a 30-minute debate, so they may not have as much time as they wish to share their views on behalf of their constituents. I am sure the Minister is pleased that he has got a bit more time to go out and talk to the Sri Lankan Government and other people, rather than spend time here.

On the issue of sectarian violence, the right hon. Lady is absolutely right. There was recently an outbreak of violence: petrol bombs were thrown at Muslim homes, shops and mosques. That is of real concern because there is an ongoing pattern of systemic violence by the authorities and a number of other issues, which I will try to touch on.

One of the things I try to do when I look at countries in the area—I have just come from an International Development Committee meeting about Burma and Bangladesh—is to triangulate what is happening in these countries. The sectarian violence against Muslims in Sri Lanka has real echoes of what is happening in Burma to the Rohingya Muslims. Indeed, there are Rohingyas in Sri Lanka. Unless we ensure there is a truth and reconciliation mechanism that has the confidence of the diaspora and the people left in Sri Lanka, the cycle will repeat. We need only look at how party politics works in Bangladesh now. There are still echoes of the war of independence and its aftermath, some 47 years on.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Gentleman on securing this debate. As the right hon. Member for Enfield North (Joan Ryan) said, in the past one of the key issues was freedom of religion, and the persecution and murder of people because of their faith. We would very much like to see truth and reconciliation. Does he agree that, for trust to be rebuilt in a community ravaged by guerrilla warfare and terrorism, people need to believe that there is a way of trusting a new generation? Support for and education of children is a driver for securing a future and hope for a war-torn nation. People need freedom of religion and the freedom to worship their God in the way they wish to.

[Paul Scully]

The hon. Gentleman is absolutely right. The way to move on, in addition to truth and reconciliation, is through education. I am going to a Tamil school in my constituency this Saturday, I think. When we go to that sort of cultural event, we always welcome the fact that British Tamils celebrate their heritage. They do so through song, dance and poetry, but they also remember. We recently held Holocaust Memorial Day here, which is a day on which we look back on the atrocities that ravaged Europe. Tamils similarly look back at what happened at Mullivaikal.

One of the toughest things that the hon. Member for Ilford North and I had to do was to listen to the testimony of survivors of Mullivaikal, who talked about people who had gone missing and those who had literally been ripped in half during the shelling of a hospital, which was deliberately targeted by the army. Normally in armed conflicts, the co-ordinates of hospitals and buildings of that sort are given out so that they are avoided. That hospital looked like it had been deliberately targeted.

We can see why people are so emotional, even now. To go back to Bangladesh for a second, it is the 47th anniversary of independence, and last Saturday I was speaking to a veteran of that war, who was in tears recounting his story. That was 47 years ago. In the case of Sri Lanka, we are talking about 2009—just the blink of an eye—so it is no surprise that the emotions are so raw.

UNHRC resolution 30/1 does not just talk about the truth, reconciliation and justice mechanism; it talks about human rights in general. It says that the Prevention of Terrorism Act needs to be ripped up and started again to bring it up to modern standards. It talks about land-grabbing and the return of land to people. The hon. Member for Strangford (Jim Shannon) talked about religious tolerance. Buddhist structures have been popping up in the north and the east of the country, which antagonises Tamils there. The UNHRC resolution talks about setting up an office of missing persons. Although that has been signed off, we need to see that office properly established and doing its work. If the international community and the UN help it do its work, that would be welcome. I hope the Sri Lankan Government will respond positively to such requests.

When we were in Geneva, we saw a traffic-light or RAG—red, amber, green—system for rating how the Sri Lankan Government have been progressing on implementation of the resolution. There were far too many red lights for our liking. Some things are low-hanging fruit, such as the Government having a list of the disappeared that has never been published. They have the list. Why can they not just publish it?

We met mothers of the disappeared, a small group of people who had lost not only their children but their husbands and their grandchildren. We met them and took some photos, but we did not want to share those photos for fear of what people might have to go back to. That cannot be right. Those people, who have had so much pain and suffering, are in fear for their lives and of reprisals when they go back to their home country. It is important that we look into such matters to move forward.

[Wes Streeting (Ilford North) (Lab)]

Does the hon. Gentleman agree with me that the people in Sri Lanka who do not want the resolution to be implemented are, in effect, engaged in a war of attrition—both with more progressive elements in their own Government and with the wider international community? They hope that, as time passes, as personnel such as the UN High Commissioner for Human Rights move on or Governments change, we will just forget about it. They think that they will be able to move on with impunity. That is exactly why the international community needs to keep up external pressure on the Sri Lankan Government to ensure that they sign up to the commitments they made, alongside the rest of the international community, in that important UN Human Rights Council resolution.

[Paul Scully]

The hon. Gentleman makes a very good point, which goes back to what the right hon. Member for Carshalton and Wallington (Tom Brake) was saying as well: it is too easy for the situation to drift. It is too easy for us to get to next year, as I was saying, and to find that nothing has happened. That is why a time-bound plan, as the hon. Member for Ilford North suggests, is the right way forward. That would mean that we can look at staging posts along the way to ensure that action is happening.

[Tom Brake]

The hon. Gentleman is generous to give way again. Does he agree with me that the Sri Lankan Government have nothing to fear from this? An office for missing persons, for example, or a truth and reconciliation commission, would look at what happened on both sides, which would be of benefit to everybody in Sri Lanka, not only to one group or another.

[Paul Scully]

The right hon. Gentleman makes an absolutely valid point. That is true: implementation is a way of moving forward for both sides, and it needs to move forward.

Under the European Union’s generalised scheme of preferences, Sri Lanka has just received back GSP-plus or most favoured trading status, much to the frustration of our all-party parliamentary group. We all want Sri Lanka to succeed—of course we do: we want the economy to be developed for the sake of all the people of Sri Lanka, Tamils and Sinhalese alike—but none the less the fear is that the pace is too quick and that we are releasing all our levers of influence before having any sense of meaningful progress. Moving things on through a time-bound plan, we believe, is the way forward.

When we were in Geneva, we met representatives of the missions of Germany, Macedonia, Canada, India and the EU mission itself. They all seemed incredibly supportive of keeping the heat on Sri Lanka to ensure that it adheres to the resolution that it co-sponsored. But when we asked what would actually happen when we got to next year, the answer was really a bit of a shrug of the shoulders: they could come up with another resolution, or the UN Security Council might be another way to do something, although that is a very different arm of the UN—a very different instrument. Going down that route would get us into a whole other dynamic of geopolitics. We are talking about human rights, not necessarily security: two separate issues.

What other avenue does the UNHRC have? I fear that there is not one, so we have to look at the validity and purpose of the HRC. It needs to be seen to be effective, because otherwise the institution itself is undermined. That might result in situations in which people feel that they can do what they want. Again, to return to somewhere such as Burma, if it can do something without any punishment, any repercussions or a forward view, why not do what it wants to do? What is needed is for the international community to be able to act, and to be able to act effectively.

[Joan Ryan]

I thank the hon. Gentleman for giving way again. Does he agree that the restoration of GSP-plus by the European Union seems to be giving a signal that things are moving forward when in fact nothing has moved forward? When the Minister responds, it would be useful to know exactly what line he took on the restoration of GSP-plus and how firm he was with the European Union on the matter, because I do not think for a moment that that status should have been restored.

[Paul Scully]

I thank the right hon. Lady for making that point. As I said, GSP-plus absolutely has its place in building Sri Lanka’s economy, but its restoration was far too early. Nobody wants to hold a country such as Sri Lanka back, because too many people are affected by lack of development of the economy. None the less, the Sri Lankan Government—who, frankly, have their own problems, as we have seen in the recent elections—need strong leadership. More to the point, the Sri Lankan people need strong leadership. It is not for us to run their country or tell them how it should be governed, but we are here, as critical friends, to ensure that human rights abuses do not continue and that historical human rights abuses are dealt with firmly but fairly.

Finally, I will move on to the main body of the debate, which is not about the ongoing human rights situation, but about settling what has happened, and that relates to the truth and reconciliation commission. We have talked about the office of missing persons, the Prevention of Terrorism Act, the ongoing systemic use of violence by the police and the land-grabbing. What Sri Lankan people need, and not only those in this country—such as the 2,500 or so of the Tamil diaspora group in my constituency, with similar numbers in the constituencies of other hon. Members present in the Chamber today—and throughout the world, in Canada, Australia and all places, but Tamils in Sri Lanka, is a system of reconciliation and justice that includes international and independent representation so that people can tell their story and bring some to book, confident that they are not standing before those who might have perpetrated such crimes or their friends. People who appear before such a commission want confidence that they will get justice, and that reprisals will not follow for them or their family.

People want to make it safe not only for those in Sri Lanka to remain in their communities but, ultimately, for the diaspora to go back and forth to Sri Lanka and, more to the point, to invest there—that comes back to GSP-plus and the wider view of the economy. The diaspora in this country has done very good things economically, making a great contribution to this country, so if we can get them to have the confidence to go back and invest in Sri Lanka, that would be great for everyone there. If we can move the judicial process on with our support and international support, that has to be a good thing.

Will the Minister ensure that he keeps the pressure on? Perhaps he will detail what more we can do to secure a time-bound plan and, ultimately, if Sri Lanka does not adhere to resolution 30/01, what are the next moves that we can take?

11:09

[The Minister for Asia and the Pacific (Mark Field)]

I congratulate my hon. Friend the Member for Sutton and Cheam (Paul Scully) on securing this debate. I pay tribute to his passionate commitment to Sri Lanka, which predates his arrival in this House, although since then he has been an energetic leader as the chairman of the all-party parliamentary group for Tamils and on a range of issues in Burma too, as discussed.

Needless to say, I am also grateful for the attention and commitment of the other Members present: the right hon. Members for Enfield North (Joan Ryan) and for Carshalton and Wallington (Tom Brake), and the hon. Members for Ilford North (Wes Streeting) and for Strangford (Jim Shannon). I will try to respond to all the points made.

Let me offer my condolences to the families and friends of those who were killed in the recent intercommunal violence in Sri Lanka. Right hon. and hon. Members will know that that violence was not Sinhalese-Tamil, but Sinhalese against other communities, and it came in the immediate aftermath of highly contested local elections. Inciting violence in the name of religion or ethnicity clearly has no place in any civilised society. We support the Sri Lankan Government’s swift action to bring the violence to an end, but equally we implore the authorities properly to respect human rights in doing so.

We welcome the ending of the state of emergency that was announced yesterday morning, but we urge the Sri Lankan Government to ensure that there is an independent judicial holding of the perpetrators of that violence to account. Those events are yet another reminder of the continued importance of rebuilding trust and mutual respect between the communities and of the potentially tragic cost when that does not happen. The establishment of a truth-seeking commission is and always was an essential part of that process. I would like to update the House on Sri Lanka’s progress on reconciliation and on the UK’s action bilaterally and within the international community to support that process.

Sri Lanka’s co-sponsorship of Human Rights Council resolution 30/1 as long ago as October 2015 was a truly historic moment. It was, at least verbally, a strong commitment to address the legacy of its long-running and devastating civil war, a commitment subsequently extended by two years last year in resolution 34/1. In co-sponsoring those resolutions, Sri Lanka pledged to establish a commission for truth, justice, reconciliation and non-recurrence, to sit alongside other mechanisms as part of a comprehensive truth and justice process. The UK, understandably and rightly, enthusiastically supported those resolutions. It is right to say that the Sir Lankan diaspora in this country—disproportionately Tamil as it is, for obvious reasons, rather than Sinhalese—on all sides was very much in favour and made that plain to the UK Government.

We remain absolutely committed to the full implementation of those resolutions as the single best way to secure the lasting reconciliation and peaceful future that are in the interests of all Sri Lankans, and which they so richly deserve. There has been some small recent progress, but in all candour I must tell the House that it has been slower than we would have anticipated or liked. An office of missing persons is close to being operational and has appointed seven commissioners. The Sri Lankan Government have passed a law to prevent and criminalise enforced disappearances. I understand that a draft law to establish an office of reparations has been approved by the Sri Lankan Cabinet. I also understand that draft legislation for a truth-seeking commission—an important part of this whole process—has been prepared, drawing upon the work of a country-wide consultation taskforce.

[Tom Brake]

The Minister may be about to come on to this, but in the UK’s pressure on the Sri Lankan Government, what have the UK Government been saying about when they want the truth and reconciliation commission to be established?

[Mark Field]

I will come on to that, but when I visited Sri Lanka last year, that was the No. 1 priority—to discuss exactly what progress was being made, what the stepping stones were and, in legislative terms, what the difficulties or delays were. That is very much in mind, and obviously it is in the mind of our high commissioner in Colombo in his regular interactions with members of the Sri Lankan Government.

The legislation is under review, given the consultation that has just taken place, and is not yet publicly available. We hope to have progress on that shortly. I very much hope that it can proceed without further delay, together with work to establish the planned judicial mechanism, on which there has also been regrettably little progress.

This week marks the first anniversary of resolution 34/01. The UK will lead a statement at the Human Rights Council in Geneva tomorrow on behalf of the core co-sponsors: Macedonia, Montenegro, the United States and the UK. The statement will review Sri Lanka’s progress against its commitments following the update report to be presented tomorrow by the High Commissioner for Human Rights.

It would probably not be appropriate for me to pre-empt the final wording of the co-sponsors’ statement here, but I expect that it will reflect our assessment that: first, Sri Lanka is safer and freer now than it was in 2015; secondly, it continues to engage constructively at times with the international community; and thirdly, it has the opportunity to advance towards long-term, sustainable reconciliation. However, the statement will also make it clear that the pace of progress has been disappointingly slow and that much remains to be done, including on the implementation of transitional justice mechanisms, of which the truth and reconciliation commission is an important part.

I will touch on the point on the GSP-plus, which the right hon. Member for Enfield North made. I recognise the concerns that she raised and would like to make it absolutely clear that, although there has been progress and we have allowed some recognition of the efforts that Sri Lanka has made so far, I would not want the Sri Lankan Government to be under any illusion that being allowed to go for the GSP-plus somehow gets them off the hook. We feel that is an entirely acceptable position.

[Wes Streeting]

rose—

[Mark Field]

I am afraid I am running out of time and I want to finish this point. Subject to the scheme’s rigorous monitoring for ensuring continued compliance, the first report was published in January and we will have further reports.

On the diaspora point that was made powerfully by my hon. Friend the Member for Sutton and Cheam, he is right that we need to try to encourage the Sri Lankan diaspora here in the UK to play their part. Improving the economy and the GSP-plus is part of that. In that sense, it is a slightly positive way forward, but I would not want there to be any misapprehension about what was going on.

Last October I met Foreign Minister Marapana in Colombo and encouraged the Government to focus on four steps that the UK Government believe, if implemented together, would enable conditions for stability, growth and long-term prosperity for all Sri Lankans. They are: to deliver meaningful devolution through constitutional reform; to establish credible mechanisms for transitional justice; to return to the rightful owners all remaining private land that is still held by the military—right hon. and hon. Members will know that that is a major stumbling block; and to replace the Prevention of Terrorism Act with human rights compliant legislation, which we have not had in Sri Lanka to date. We will continue to press the Government of Sri Lanka to make real progress in those areas.

The UK diplomatic work, through our funding of more than £6.5 million from the bespoke conflict, stability and security fund, is having at least some positive impact. When I visited Jaffna in the far north of the country, I saw at first hand how our funding is helping to clear landmines. That is vital to families who have already been waiting far too long to return to their ancestral homelands and to rebuild their lives. Our long-running community policing programme is also helping police officers to serve all communities better, and to give greater support to women and children and their rights.

All that activity remains worth while, but I am proud of the UK’s continuing role working alongside local communities in the east of the country to promote inter-faith and intercommunal dialogue, in a part of the country where there is a much more mixed population than in others. Through the UN’s Peacebuilding Priority Plan, together with other international donors, we continue to provide technical support on reconciliation efforts that include transitional justice.

The UK’s message to Sri Lanka remains resolute: we absolutely expect the Government to implement in full their commitments made in good faith in the aftermath of a time of terrible conflict. As a close partner but also as a candid friend, we shall continue to support and encourage the Sri Lankan Government to make further and faster progress, particularly on transitional justice.

Right hon. and hon. Members will be well aware that part of the difficulty is that national elections are looming and there is more political instability than perhaps we might have anticipated back in 2015. As a consequence, I share the very great frustrations that have been raised in the debate about the slow pace of change. However, as we know full well from our experience in Northern Ireland, progress on reconciliation is vital to redress historical grievances, to strengthen human rights and the rule of law, but also to lay the foundations for the lasting legacy that all Sri Lankans rightly crave. That process could be a lot slower than we all wish, but the great prize is there for the taking. I believe it is what all Sri Lankans deserve.

Question put and agreed to.

11:29

Sitting suspended.

Local Authority Financial Sustainability: NAO Report

Tuesday 20th March 2018 Westminster Hall

[Mr Nigel Evans in the Chair]

14:30

[Mike Amesbury (Weaver Vale) (Lab)]

I beg to move,

That this House has considered the National Audit Office report on the financial sustainability of local authorities, HC 834.

It is a pleasure to serve under your chairmanship, Mr Evans. I will start by doing something very simple that we do not do enough in this place, or in the political world more broadly: saying thank you. I want to say thank you to our councillors, mayors and local government staff. [Hon. Members: “Hear, hear.”] As a former councillor, I know that local government holds our communities and services together and makes our towns and cities what they are. Our local government leaders take decisions and hold responsibility for budgets that directly affect their constituents just as much as, if not more than, many Members of Parliament. They deserve more recognition and respect for that than they are sometimes given. However, since 2010 their very challenging job has become almost impossible. The National Audit Office report makes it clear that funding has been cut by nearly 50%.

[Stephen Lloyd (Eastbourne) (LD)]

I thank the hon. Gentleman for securing this important debate. The Times, which is not known for its hyperbole, stated recently in an editorial:

“All politics is local, and local government is going bust”.

Does he agree that the Government are culpable and must take responsibility for their funding decisions, and that it is down to them to stop local government going bust?

[Mike Amesbury]

I do. As a result of that 50% cut, services have been drastically reduced. Pressures and demands are increasing, but the Government have failed year after year to provide councils with fair and sufficient funding.

[Derek Twigg (Halton) (Lab)]

Will my hon. Friend give way?

[Mike Amesbury]

I give way to my colleague and constituency neighbour.

[Derek Twigg]

I congratulate my hon. Friend on securing this important debate. He knows that Halton Borough Council, which serves our constituencies, is under extreme pressure. It is one of the smallest councils, and its budget will have been cut by nearly 60% by the end of the Parliament. Does he agree that that puts the council’s sustainability and its ability to deliver its statutory duties, particularly for social care, at great risk?

[Mike Amesbury]

Of course. Things have been particularly difficult for local children’s services and adult services, about which we have recently lobbied Ministers.

Some 66.2% of councils now have to use their reserves for social care provision. These figures are not mine or the Labour party’s; they are in the National Audit Office report. Last year local authorities overspent by £901 million. Minister after Minister has ignored the crisis or tried to pretend that using calculations such as core spending power can somehow mask the level of the cuts that councils face, especially those in highest need.

[Stephanie Peacock (Barnsley East) (Lab)]

I congratulate my hon. Friend on securing this important debate and echo his thanks to our councillors and local government workers. Does he agree that it is outrageous that my local authority, Barnsley Council, faces cuts of 30% between 2015 and 2020? Such cuts put an unfair burden on local authorities and have a significant impact on local services. It is clear that the Government should take responsibility and do something about that.

[Mike Amesbury]

I agree. It took the Conservative leader of Surrey County Council to threaten a referendum on a 15% council tax rise to get any response at all from the Government. Even then, they just placed further accountability on local taxpayers. I am surely not the only person who was a little concerned that a financial crisis so grave that it required a 15% council tax rise in one of the wealthiest areas of the country appeared to go unnoticed for so long by so many local MPs. It is all the more worrying that those MPs include the Minister of State for Housing, Communities and Local Government, Ministers of State for Education, the Secretary of State for Health and Social Care, and the Chancellor of the Exchequer. Is it any wonder that Ministers do not appear to realise that we have a cash crisis in councils, schools and the NHS?

[Thelma Walker (Colne Valley) (Lab)]

The NAO report shows that the number of looked-after children has increased by 10.9% since 2010, but the Chancellor failed to offer local authorities any additional support to address that in the Budget or the spring statement. Does my hon. Friend agree that the Government must act to provide more funding to support looked-after children?

[Mike Amesbury]

Certainly. In fact, there will be a £2 billion shortfall by 2022, so there is a real crisis in children’s services.

One of the other Surrey MPs happens to be the Environment Secretary. Given his experience of dealing with the outcomes of difficult referendums, I cannot imagine why he was not keen to support that one.

Many colleagues in the Chamber and beyond will know that although cuts have hit the poorest areas hardest, the damage is not limited to them, as the Local Government Association rightly points out. Rising pressures on social care, transport and other services cut across borough and political boundaries. As such, I wish the Defence Secretary all the best with his petition to save bus services in Staffordshire—I hope he gets a sympathetic ear from the council. Many in the Chamber might have been a little surprised that he addressed his concern locally rather than nationally, where the real fault lies, but raising it nationally might have resulted in the Chancellor informing him to shut up and go away—a statement that the Defence Secretary is all too familiar with.

[Afzal Khan (Manchester, Gorton) (Lab)]

I, too, congratulate my hon. Friend on securing the debate. We both served on Manchester City Council, a great council with great leadership that has been devastated by cuts. Greater Manchester leaders say that they may be close to bankruptcy in four years if Government cuts continue in the same way. Does he agree with the report’s finding that, instead of blaming councils, the Ministry of Housing, Communities and Local Government should recognise that it has failed in its duty to monitor and mitigate the impact of budget cuts on our local authorities?

[Mike Amesbury]

I agree with my hon. Friend and former colleague on Manchester City Council.

Councils of all colours and types are near breaking point. Indeed, Conservative-run Northamptonshire County Council has already reached that point, although, as the report shows, any suggestion that its funding challenges are unique is wide of the mark. Some 10.2% of local authorities have less than two years’ reserves. They are at breaking point, and we could face another 15 being served with section 114 notices. It is only through the sound financial management of most councils that we have not seen more local authorities topple.

Warnings have come from councils across party politics and from the cross-party Local Government Association. The National Audit Office report confirms what those at the frontline of local government have been saying for years: funding is down by almost 50%, while demand for services such as adult and children’s social care and homelessness support rises. Lack of central Government support has meant that the tax burden has shifted to local taxpayers. The National Audit Office concludes that:

“As funding continues to tighten for local authorities and pressure from social care grows, there are risks to statutory services.”

Those findings are stark and should alarm us all, and not just in politics but well beyond. The picture that the report paints is familiar to Halton Borough Council and Cheshire West and Chester Council in my constituency, as it will be across the country. Pressures on some areas of children’s services have increased by 26% in Cheshire and by 83% in the more deprived Halton, as my hon. Friend the Member for Halton (Derek Twigg) pointed out, yet the recent Budget failed to offer more money for that vital area of responsibility. That would be damaging enough when taken in isolation, but when we consider the human and future economic costs of failing our vulnerable children, it is truly damning. By 2020 the shortfall for children’s services will be a massive £2 billion.

[Matt Rodda (Reading East) (Lab)]

One of the great problems for many children’s services departments operating in areas of high housing cost is that it is particularly difficult to recruit staff. We have a severe problem with that in Reading. We are outside the boundary for outer London weighting, which stops at Bracknell, even though that is an area of lower housing costs, and we suffer from a severe shortage of skilled workers to work in our children’s services departments. I understand that is a common problem for local authorities, and particularly for those in areas of high housing costs. There are issues with both pay for staff at those grades and the ability of local authorities to provide their own council housing. Reading had a plan to build 1,000 council houses, which sadly was stopped by George Osborne. Would my hon. Friend like to comment on the twin problems of low pay for key staff and the inability of local authorities to build housing for them?

[Mike Amesbury]

Indeed, those factors are highlighted in the report. Perhaps its most concerning aspect is the finding that the Government do not have a long-term funding plan for local authorities. That confirms the fear of many councillors and mayors I have spoken to. They have been offered no clarity about how 100% business rate retention will work, especially for those areas that will be net losers. Other councils talk of reaching a cliff edge in 2020.

My question to the Minister is simple. Does she have a long-term funding plan for local authorities and, if so, what is it? Councils need to know now. At what stage in the near future will she legislate to ensure that local authorities can use 100% of the money they raise locally for the good of their residents? If she cannot give our councils the stability and guarantees they need, she should not be surprised if future ambitions around homes, schools and services fall even further short of the mark than they do now. Between 2010 and 2017, spending fell on planning and development by 52.8%, on housing by 45.6%, on culture by 34.9%, and on highways—we are all familiar with potholes and everything else—by 37.1%. Again, those are not Labour party figures, but figures from the National Audit Office report.

A national Government who try to lecture local government about financial stability and saving for the future have no credibility to do so when their own watchdog makes such a serious statement about their short-sighted approach. The status quo can no longer continue. Our councils, our communities and the dedicated staff who work in them deserve and demand better.

14:45

[Fiona Onasanya (Peterborough) (Lab)]

I thank my hon. Friend the Member for Weaver Vale (Mike Amesbury) for securing this important debate. In February I asked the Chief Secretary to the Treasury how my authority is expected to meet the rising demands of adult social care and children’s services, despite devastating funding cuts. She argued that councils have been given the ability to increase council tax levels to pay for those services. However, that new flexibility—namely, to increase council tax to pay for social care, as my council has had to do—and indeed the introduction of the improved better care fund, have associated conditions that might limit the flexibility of some local authorities to spend on social care funding as well as local priorities, thus disproportionately harming low-income families. Austerity is expensive. It has not tackled the deficit; rather, it has passed it on to public services.

In March 2018 the National Audit Office reported that many local authorities rely on their savings to fund local services and increasingly find themselves in an unsustainable financial position. We cannot keep cutting their funding and expect them to do more with less. In my constituency there has been a real-terms cut of 10.6% in adult social care, almost double the national average, and the Government have committed no further funding for social care in the Budget. The money offered to councils in the local government finance settlement is nowhere near enough to calm the crisis.

My constituents have repeatedly described social services as a nightmare. In Peterborough, 17,638 people are over the age of 65 and, of them, 2,171 are unpaid carers and 6,802 live alone. Cambridgeshire and Peterborough clinical commissioning group would have received an extra £30.3 million if it was funded in line with the national average. The CCG was ranked 204th out of 207 for the level of funding received from NHS England.

Services are overstretched, and the recent trends in the level of funding are unsustainable and unacceptable. Peterborough’s needs have been attended to on the cheap for far too long. As a consequence, cracks are beginning to appear in our services. Our needs have not been properly or adequately addressed, and the current settlement is blatantly below par.

14:48

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

I thank my hon. Friend the Member for Weaver Vale (Mike Amesbury) for securing the debate. My constituency covers both the Conservative-controlled East Riding of Yorkshire Council and the Labour-controlled Hull City Council, and the messages coming out of both councils are very similar. This is not fake news. Instead, it is the hard truth and reality of the cuts faced by both councils.

Hull City Council’s social care spend equates to 60% of its entire budget, and it is rising as a proportion of its total spend by 4% to 5% every year. It told me that it spends 37% of its total budget just on adult social care. It spends 23% of its total budget on children’s services. Yet since 2010 the council’s budget has been reduced by a staggering £126 million. This year it received £5.3 million less than it did the year before. Is it any wonder that it does not have the money to repair the potholes in the roads, or to invest in many other needed services?

Recently we had a situation in which Hull City Council was desperately trying to move money around to fund the rising demand and cost of adult social care and children’s services. One of the things it was looking at having to cut was its peer-to-peer support for breastfeeding mothers. In the end, it was able to find some money, but that means money coming from elsewhere. When I talked to the council about that, it was not because it wanted to take support away from breastfeeding mothers, but because every choice is an impossible choice. Either it takes money away from supporting breastfeeding mothers, or it cannot give it to support homeless projects in the constituency, to repair the play equipment in the parks or to deal with the increasing pothole problem. Every choice the council makes is an impossible choice.

Hull West and Hessle is a wonderful place to live, with great people. I am particularly delighted to see two of my constituents sitting in the Gallery and delighted that they can be here today. We are very proud of where we live, but we would be lying if we said that it did not have some significant problems. It is the third most deprived local authority in the whole country. A report by End Child Poverty has revealed that more than 20,000 children in Hull are living below the poverty line. That is one third of all the children in Hull living in poverty. In East Yorkshire, over 20% of children live in poverty.

As austerity continues to bite, the demand for social care continues to grow and Hull City Council simply does not have the council tax base from which to fund it. Some 68% of properties in Hull are in band A. We would be hard pushed, looking around our surroundings here in Westminster, to find a single property that is anything below band C. The number of people over 65 in Hull is forecast to increase by 6% by 2020, which of course will increase demand, but only 7% of people needing adult social care can self-fund it; everybody else is reliant on the council. Two thirds more residents in Hull require social care compared with the national average.

The picture I am trying to paint for hon. Members is of a city that simply does not have the ability to raise its own money to fund a problem that is greater, and growing more quickly, than in many other parts of the country. Hull City Council will get the lowest amount per head from the social care precept of any Yorkshire and Humber council. It has a very low tax base. If people want to raise the precept by 1%, fine, but in Hull that will raise £2.90 per head, compared with £7.08 per head in the City of London. They simply cannot be compared. Hull City Council is 81% reliant on the revenue grant from Government. It does not have the ability to self-fund, but still, even with all these problems so clearly laid out, it will have to cut another £16 million from its social care budget, or find cuts in all the other budgets.

It angers me that there are Liberal Democrat councillors in Hull criticising the council for making those cuts and for the consequences. I wonder how long their memories are. I wonder whether they remember that they were part of the coalition Government who in 2010 voted through all those cuts. When they stand there and criticise Hull City Council for not being able to repair the parks or the potholes, I wonder whether they could cast their minds back to being the people who took away that money in the first place.

Conservative-controlled East Riding of Yorkshire Council has said that the additional £2 billion for adult social care announced in the 2017 spring Budget was welcome, but said,

“if it is the Government’s wish to continue to safeguard some of the most vulnerable people, this scheme needs more investment and the human cost of failure in such an essential service is huge.”

That is a quote from the Conservative-controlled East Riding of Yorkshire Council. Even that council says that it does not have the funds needed. I know it has already spent all the reserves it has. Where is it going to find the money from in the future? It wants the Government to look at extending the additional £2 billion beyond 2019-20.

Cities such as Hull, with high needs, significant deprivation and a very low tax base, have limited ability to generate income. It is therefore essential that the Government’s future financial settlement calculations recognise and make allowances for those differences, challenges and variations. It is positive that the National Audit Office recommendations seem to be informed by a realistic understanding of the national position facing local authorities. If the recommendations were implemented in full, there would hopefully be some potential improvement.

While councils and their partners are making and continue to make strenuous local efforts to protect statutory services and to cope with the great pressures affecting children’s services and adult services in particular, it is simply the Government who must ensure that the national system is fit for purpose. People in Hull West and Hessle are tired of “make do and mend.” They are tired of tough and impossible choices. As East Riding of Yorkshire Council put it, “Salami slicing from other grant streams is not sustainable.”

We want our roads fixed, we want our parks to have new equipment and I know how much Friends of Pickering Park want their aviary back, but none of that can happen with the year-on-year cuts at the same time as the rising demand. My constituents deserve so much more. There is no justification for the continued underfunding, and the previous Liberal-Tory coalition’s mantra, “We’re all in this together,” just rings empty. It is time to end austerity, implement the National Audit Office’s recommendations and fund our local councils properly.

14:56

[Dan Carden (Liverpool, Walton) (Lab)]

I am delighted to serve under your chairmanship, Mr Evans. I congratulate my hon. Friend the Member for Weaver Vale (Mike Amesbury) on securing this important debate. It is a shame that we will not even hear a Tory Back-Bencher heckle, never mind make a speech or an intervention, because not one has turned up to speak on behalf of their local councillors in this important debate.

As others have identified, the National Audit Office report raises grave concerns about the sustainability of local authority finances. Even more worryingly, this Government show no sign of changing direction, regardless of the consequences. The spring statement showed that there is no plan to abandon the austerity project, meaning that services delivered by local councils will be put under even more pressure. This Government have presided over the slowest recovery since at least the 1920s. Austerity has not tackled the deficit; it has passed it on to public services and plunged them into crisis, from the NHS to schools, to councils even going bust.

The Tory cuts to local government are deeply unfair, hitting the most deprived councils with the greatest need the very hardest. Since 2010, Liverpool’s funding has been cut by a staggering 64%, or some £444 million, and council services have lost 3,000 staff. Those cuts have stripped our communities bare and left our services stretched to the limit. One of the biggest financial pressures on our councils nationally is adult social care. More than 400,000 people can no longer access social care, which faces a £2.5 billion funding gap by 2020. The other main growing pressure on council budgets is children’s services. The number of children taken into care is at its highest since 1985, yet, according to the National Children’s Bureau, more than one in three carers are warning that cuts have left them with insufficient resources to support those children.

Liverpool City Council has rightly shielded those services as much as possible from the full force of Government cuts, but that means that funding for other vital services is being squeezed, from housing to road maintenance to refuse collection. Cuts combine and converge to create increased hardship, risk of homelessness and pressure on other services. Liverpool City Council’s impact analysis shows that the biggest impact is on disabled people, women, families with children, younger people and social sector tenants aged between 40 and 59.

The council has set aside £50 million to protect the most vulnerable, including £11 million to tackle homelessness, which has more than doubled under this Government; £3.3 million for discretionary housing payments for those affected by botched welfare reform and hardship—70% of which are because of the bedroom tax alone—and £3.1 million for crisis payments to help with the cost of food, fuel, clothing and furniture. I could go on.

It is right that local authorities step in when the Government fail the most fundamental maxim: that a society is judged by how it treats its most vulnerable. However, those resources should be going on early intervention programmes, youth centres, community centres, libraries—facilities that give people the means to realise their creative capacities and live full and independent lives. Instead, local authorities, alongside a network of food banks and community and volunteer groups, are forced to act like a sticking plaster over the worst effects of Tory austerity.

Of course, the impact cannot be explained by figures alone. The stories of ruined lives that I hear at my advice surgeries and deal with through my office every day collectively amount to a national tragedy. Current trends of growing overspends and dwindling reserves are unsustainable, and the Local Government Association has raised concerns that there remains no clarity on how local government will be funded after the four-year funding deal runs out in March 2020.

We know that all this is down to political choices, not economic necessity. The Conservative Government chose to give tax handouts to the super rich, corporations and bankers, and it was paid for by the rest of us. In the autumn statement, they chose to hand almost £5 billion to the biggest banks by cutting the bank levy—money that could have been used to fund our children’s services. A recent report by the Equality Trust found that, in the UK, the 1,000 richest people now have more wealth than the poorest 40% of households put together, their wealth having increased by a staggering £82.5 billion last year. Meanwhile, UK workers have not had a pay rise for 10 years and continue to suffer real-terms pay cuts.

It was never about tightening our belts. We were never all in it together. It is time to call austerity what it is—and it ends the day the Labour party takes office.

15:02

[Laura Pidcock (North West Durham) (Lab)]

I thank my hon. Friend the Member for Weaver Vale (Mike Amesbury) for bringing this extremely important debate to the Chamber. I echo my hon. Friend the Member for Liverpool, Walton (Dan Carden) on the lack of representation from Conservative Members. I hope that is symbolic of how they will do at the local elections.

I have seen Durham County Council staff work extremely hard in a punishing fiscal environment. Along with other Members, I have seen the systematic decimation of our local authorities. I put on the record my sincere thanks to every single council worker and every single Labour councillor. They work extremely hard in these terrible circumstances.

Each time there are further cuts, we wonder if it will be the last year. What else could those who oversee budgets possibly do to cut more money because of repeated Government demands? What more could local authority workers possibly do, with the workload that is piled upon them? Durham County Council has seen its funding cut by half since 2011. It has to make savings of £43.7 million over the next four years, on top of the Government-inflicted cuts of £209 million since 2011-12, with £15.3 million cut this year alone. That is simply unjustifiable. Local governments across the country are at breaking point.

Millions of pounds cut from spreadsheets means very little, in numerical terms. Everyone here knows the figures. What we know, more than all the numbers, is the devastating impact on our communities. It is the stretch and the strain on child protection services and social services. It is the community centres, which are so cherished by local communities, that have closed. It is the reduced library hours or the closing of libraries. It is swimming pool prices increasing as subsidies dwindle, pricing out the poorest people from being able to go to a local swimming pool. It is the reduction of drug and alcohol services. It is the threadbare social care services. It is the thousands of civil servants and council workers who lose their jobs.

The feel of our communities becomes impoverished. The help that people need, and the way in which people can enjoy their communities, has been stripped bare because the Government do not believe in local government. They wish local government to be vessel entities for privatisation, rather than democratically controlled mechanisms for public ownership.

Let us be under no illusion: cutting the millions of pounds from local government was ideologically driven, with little or no care for the devastating impact it would have on our communities. The Government have stripped bare our local government services. We know how convenient it is for the national Government to devolve cuts to local government when they are Labour-run authorities, because the Government can devolve the blame. I would love the upcoming local elections to be a referendum on the way the Government have treated our local communities. The idea that raising council tax rates, which residents quite rightly dread because they feel the strain on their wages, or business rates retention are some kind of miracle remedy for the years of this punishing Government regime is an absolute joke.

I would love the Minister to come to North West Durham and justify that strategy—to say to my constituents’ faces that this is a serious remedy for the millions of pounds stolen from my area and my council. Councils have faced these funding cuts for nearly a decade now, and for what? What has been achieved? The poorest areas have been hit the hardest and, as always, those who rely on public services the most—those who graft so hard and who are so passionate about their communities —are being punished by the Government.

I wonder how the Government will possibly justify this damning record in our local communities. That will be really difficult. I urge the public to demand so much more from their Government. It is only what they deserve.

15:06

[Jo Platt (Leigh) (Lab/Co-op)]

I thank my hon. Friend the Member for Weaver Vale (Mike Amesbury) for securing this vital debate. Local authorities across the country are at a tipping point. Eight years of Tory austerity have decimated our local councils, with my local authority of Wigan facing an additional 30% cut to its budget, which will mean £160 million taken out of its budget by 2020.

Prior to coming to the House, I was a local councillor. I saw at first hand the impact of the cuts inflicted to services, particularly on the most vulnerable. It is really important to note that cuts to local authorities are not just cuts to their services—the cuts to support services are just as barbaric. For example, in my area there has been a 20% rise in domestic violence, which is little wonder when local registered charities also lose their funding due to the financial pressures on local authorities via commissioning streams. The same can be said for homelessness, in which we have seen a huge surge nationally. Local cuts to early intervention and prevention grants have only exacerbated the problem. I urge the Minister to take that into consideration when she next thinks about the causes of homelessness.

Councils should have the resources to provide emergency accommodation and council housing to those most in need and to offer the support to transform people’s lives. However, the Government have time and again shifted the responsibility on to local authorities while dramatically cutting their budgets. Quite simply, our local councils are unable to cope any further with the increased responsibility placed on them by central Government without the means to deliver.

Without the resources to deliver, where do councils turn? As my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) mentioned, they turn to their reserves. However, reserves are not pots of money that councils sit on for fun, as they are often characterised by the Government. Local authorities rely on these reserves to transform their services, as has been the case in my local authority. They are also called on in emergencies to ensure that councils remain operational.

[Emma Hardy]

My hon. Friend is absolutely right about reserves. In 2007, Hull was hit by terrible flooding, which caused a lot of damage. One thing reserves are used for is for emergencies like that—to deal with unforeseen disasters. What will happen if we have a similar flood situation again and the council has spent all its reserves?

[Jo Platt]

I completely agree. We could all mention many instances where the reserves have come into play.

The scale of cuts faced by councils has meant that many have been forced to eat into the reserves to provide the everyday essential services that we all rely on. That is not only unsustainable, but reckless—we cannot play Catch-22 with the fate of our vital local councils. Doing so has led to the frankly astonishing reality of the National Audit Office warning that 10% of councils will exhaust their reserves within three years.

For me, there is another elephant in the room: Brexit. As the Brexit process continues, local authorities are still unaware of the impact that leaving the EU will have on their finances—business rates retention, for example. They also have to deal with the loss of EU structural funding: both areas on which the Government have not given sufficient assurances.

Our councils face the greatest crisis in living memory: an assault on their funding while also adopting ever more responsibility. Put simply, they have been passed the buck without the bucks. The Government’s unsustainable position must come to an end. If they are serious about delivering on housing, about social mobility and about giving powers to local communities, they need to provide the funding that our councils deserve.

15:11

[Andrew Gwynne (Denton and Reddish) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate my hon. Friend the Member for Weaver Vale (Mike Amesbury) on securing this absolutely crucial debate today. I thank the many Labour Members who have contributed, particularly those who made speeches: my hon. Friends the Members for Peterborough (Fiona Onasanya), for Kingston upon Hull West and Hessle (Emma Hardy), for Liverpool, Walton (Dan Carden), for North West Durham (Laura Pidcock) and for Leigh (Jo Platt). They speak up on behalf of their communities, who are really struggling in the face of eight years of Tory austerity.

I find it bitterly surprising that there is not a single member of the parliamentary Conservative party here, save for the Minister and her Parliamentary Private Secretary. I cannot believe that after eight years of cuts and the destruction and decimation of our public services, there is not a single member of the Conservative party willing to stand up for their communities and to say to the Minister and the Government, “Enough is enough!”

[Emma Hardy]

I have already spoken about the cuts facing the East Riding of Yorkshire Council. My constituency represents a very small part of that council, but the Conservative Members of Parliament that represent the council, such as the hon. Member for Beverley and Holderness (Graham Stuart), are not here. Why is it left to Labour MPs to give the Government the message about what is happening in their own Conservative-controlled councils?

[Andrew Gwynne]

I agree wholeheartedly with my hon. Friend. As I said, I find it bitterly surprising. When we talk to Conservative Members in private, they are as concerned about what is going on in their own communities as Labour Members are. When we look at what is happening across local government, it is not just the Opposition raising concerns.

[Wera Hobhouse (Bath) (LD)]

I was a councillor for 10 years in a local authority in the north of England and I totally agree with the hon. Gentleman. It is time for everybody to speak up against the cruel cuts that completely demolish local authorities. People say, “The Lib Dems were also involved in this in the coalition years.” We need to take responsibility and say, “Yes, there was a point when we agreed to that, but enough is enough.” We have to stand up and say it is no longer acceptable. Our local services are no longer any services to speak of and everybody suffers.

[Andrew Gwynne]

I am grateful to the hon. Lady. I will be kind to her because she was my son’s German teacher at Audenshaw School. She is right to acknowledge the role that the Liberal Democrats played in this matter. I know she was not a Member of this House when the cuts were made, but some of the most damaging and deepest cuts made to local government happened under the coalition Government. Not a single Liberal Democrat Member of Parliament stood up, spoke out and voted against those cuts, so I am afraid the Liberal Democrats do have a responsibility for the state that local government is in today.

However, the hon. Lady is absolutely right to say that enough is enough. Local government is in crisis—and it is not the Labour party saying that, but the National Audit Office and the Tory-controlled Local Government Association.

[Fiona Onasanya]

In my constituency, Peterborough is run by a Conservative council, which has come to me and said, “Will you join us and lobby Government and say enough is enough? Stand up for Peterborough. We do not have enough funds. We cannot continue to do more with less.” Does my hon. Friend agree that the Government need to listen to their own voices from within and stop the cuts?

[Andrew Gwynne]

I absolutely agree. The Tory-controlled Local Government Association and Tory-controlled County Councils Network speak with one voice in the local government family, which is that local government is on its knees, our public services are struggling and local government cannot carry on if the cuts continue over the coming years. We know what is happening because it is happening today. Tory-controlled Surrey County Council, in one of the richest parts of the country, is complaining that it does not have enough money. If Surrey County Council has not got enough money, what hope have the Liverpools, the Tamesides and the Hulls of this world?

[Dan Carden]

I am delighted my hon. Friend has made that point. We are trying to argue that this matter is not economic, but political. When Liverpool has 60% of its properties in band A, what hope have we got of raising council tax to pay for all our services?

[Andrew Gwynne]

My hon. Friend makes a very important point. One of the two local authorities that I represent, Tameside Metropolitan Borough Council in Greater Manchester, has a £16 million social care funding gap this year. A 1% increase on the council tax brings in about £700,000. The Tamesides of this world will never be able to fill the gap in the cuts from central Government, so the point my hon. Friend makes is absolutely crucial. The authorities that we represent are grant-dependent for a reason, because no amount of business rates retention and increases in local taxation through the council tax within the referendum framework will ever make up the difference between the cuts that have been made centrally.

[Lilian Greenwood (Nottingham South) (Lab)]

My hon. Friend makes a powerful point. The situation is similar in my own local authority of Nottingham City where the amount required for adult social care in the year ahead is £12 million, and the social care precept raises around £3 million. Does he think that the Minister expects us to provide each elderly or disabled person with just a quarter of the care that they need, or should we simply pick a quarter of them and show that they have the care, leaving the other three quarters without the care that they require? What does he think the Minister’s advice would be?

[Andrew Gwynne]

I will let the Minister speak for herself. We know that local authorities have to provide social care and that it is not the social care services that necessarily get squeezed, but all the other services that many of our residents access on a day-to-day basis. Most of our constituents do not access adult social care unless they have an elderly relative who needs it and they do not access children’s social care unless they have a child in the system, but they expect their parks to be well maintained, their streets to be adequately surfaced, street lighting to be fixed, and litter to be picked up. They expect basic decent services, and it is those services that are being cut.

[Emma Hardy]

Exactly. There are cuts to the local library service, for example. Local libraries have had to reduce their opening times, and yet the move towards universal credit means that everybody is expected to apply online. They were told, “Go to your library and use the computers there,” but there are not enough computers in the local library and it is not open as much as it used to be. That is another consequence of the cuts and it shows a lack of joined-up thinking, a lack of forward planning and a lack of consideration and regard for the people in the poorer parts of this country.

[Andrew Gwynne]

Absolutely. Those are the pressures facing our communities. We talk about local services as though they are isolated from one another, but they are the life blood of many towns, villages and communities. Library services, welfare support and advice, and housing services are crucial elements of what makes communities tick and brings them together.

I speak not only in my role as shadow Secretary of State for Housing, Communities and Local Government but as someone with a fundamental belief in local government’s power to make a difference. I spent 12 mainly happy years, and my wife is nearing her 18th year, as a Tameside councillor. I want to add to the thanks that my hon. Friend the Member for Weaver Vale expressed in his speech. We do not thank nearly often enough those, of all political parties and none, who serve as councillors and elected Mayors, or the staff and officers who implement councillors’ decisions. I offer thanks and appreciation to all those who work in our communities as elected members and local authority staff and officers. They are on the frontline of defending public services. Not only that, but they are the last line of defence when it comes to making the tough decisions that the Government have forced on them. I recognise the way many of them value and take pride in their position as councillors.

The National Audit Office’s assessment of the Ministry of Housing, Communities and Local Government makes for rather uncomfortable reading. Fundamental to the argument presented by the NAO is the failure of the Ministry to present a long-term strategy for the sector. As a result, even the four-year settlement that we were told was intended to offer some financial stability just kicked the can down the road. Authorities face major funding uncertainties beyond 2019-20.

Even within those four years of supposed certainty, local government has had to deal with rapidly shifting priorities from central Government—often announced at relatively short notice. It is reported by the NAO that the majority of case study authorities with social care responsibilities that it spoke to said that central Government funding outside the settlement had changed a number of times. An example was the new homes bonus being repurposed to fund adult social care.

We are told that

“The Department’s view is that these changes reflect considered responses to new pressures and risks”.

Anyone who has been following the issue would know that those pressures and risks have been growing since the beginning of the decade. As will ring true for many of my hon. Friends who have spoken today, over the decade from 2010 to 2020 Tameside will have lost close to £200 million in funding. Stockport will have lost well over £100 million. We can, as I have said, never fill those gaps with council tax alone. Although Stockport has a slightly better and more advantageous council tax base than the Tameside part of my constituency, this year it will have to find a further £18 million of savings—or cuts, as I like to call them—which is leading to consultation of residents about some drastic changes to the delivery of social care.

Tameside has said that demand for its services is at unprecedented levels. That is because of the wider impact of austerity on the public purse. If we operate in silos, there should be no surprise when cost-shunting presents itself as a problem on the town hall doorstep. Whether it is the closure of Sure Start centres or early intervention and family support, or the reduction in the number of domestic violence officers who used to be employed by the police, resulting in children being presented as safeguarding cases to the local authority, everything moves one way—from one part of the public sector to another. It may be councils pushing on to the NHS or police pushing on to councils, but it is a merry-go-round of self-defeating prophecy. We must stop that, and fund services properly.

Elsewhere in the report, we were told that the Government are working towards implementing the fair funding review. However, the implications of that are not yet clear. I must be honest with the Minister: anything that comes from a Minister’s mouth and that includes the words “fair”, “funding” and “local government settlement” sends shivers down my spine. We sure know what that means: that the Tamesides, Stockports, Liverpools, Durhams, Leighs, Wigans and Hulls—I could rattle through all the areas—will almost certainly end up with less money. As sure as night follows day, that is what happens when the Tory Government instigate funding changes to local government. Yet we have real social need, and are not able to raise money directly. What we see is the culmination of a crisis facing local government across England. What certainty can the Minister give our councils that they will get a fair funding settlement reflecting the areas’ needs and their inability to make up funding gaps through other sources? So far that has been badly lacking.

I want to end by discussing today’s crisis. Tory Northamptonshire is the first council effectively to declare bankruptcy, but it will almost certainly not be the last. The NAO reckons that in the next few years, unless the funding settlement improves considerably, one in 10 councils with social care responsibilities will have exhausted their reserves and, almost certainly, be in a similar predicament.

How did Northamptonshire, which by any standard is a wealthy part of the country, with a good council tax base, end up with an overspend at this year end of about £21 million, and reserves depleted to about £17 million? I will tell the House how it happened: it took the advice of the former Secretary of State, Sir Eric Pickles, who said that rather than complaining about cuts councils should spend their reserves. Once reserves are spent the money is gone; once the assets are sold, the asset base is gone. Once the money is gone, councils have to make cuts and take difficult decisions.

[Fiona Onasanya]

Does my hon. Friend agree that the situation is a clear case of knowing the price of everything and the value of nothing?

[Andrew Gwynne]

It absolutely is, but if it was compounded by Tory mismanagement at local level in Northamptonshire, the root cause of the problem undoubtedly came from the Tory Government. They have, as we heard from my hon. Friend the Member for Weaver Vale and the National Audit Office, presided over cuts of almost 50% in central Government funding to councils. That is unsustainable. If we want councils and councillors to facilitate services of such a quality as to provide dignity to the elderly and the best start for the young, and to provide the general population with quality public services, that must be funded.

[Emma Hardy]

We have talked a lot about percentages and money, but I want to mention something a little more individual: the incredible increase in the number of looked-after children in my constituency, which has gone up by 140. We have one of the highest numbers in the country, and that is a consequence of the cuts. That is what happens when cuts take place.

Councils do not have the money for early intervention or the other services that used to provide that extra family support. Such support does not exist anymore, because all that is left is the statutory service. Sure Start used to be available for wider family participation; groups that anybody could take their child to are now open only to a small number of people who have a particular identified need. That all contributes to the increasing number of looked-after children. We cannot just sit here and ignore it: 140 children’s lives have been changed forever.

[Andrew Gwynne]

My hon. Friend is absolutely right. Indeed, it is worse than that because we need to rebuild these services, yet over the past eight years we have lost thousands of dedicated council workers and staff. We have lost the corporate knowledge and history that was embedded in our local authorities. This is not just a question of money; it is difficult to rebuild overnight that capacity in our local councils.

The reality of Government cuts is laid bare in the National Audit Office report. Planning and development has been cut by 52.8%. If we are to meet the Government’s targets for new homes, who will be the strategic planners of the future to identify the land? Who will be the planning officers who implement planning applications? Who will be the planning enforcement officers and ensure that homes and buildings are built in accordance with the plans? Transport funding has been cut by 37.1%. These are our bus routes and the vital links between communities; these are our roads, pavements and cycleways. These cuts are unsustainable.

[Emma Hardy]

The Government talk the good talk on social mobility and say how important that is, but at the moment there are young apprentices who live in rural areas and cannot afford to do an apprenticeship or attend college, or they cannot get there because there are no local transport services for them to use.

[Andrew Gwynne]

Absolutely. This is about our museums, heritage, and cultural services—the glue that makes our communities tick. It is about who we are and that sense of place, yet funding has been cut by 34.9%. Housing services are not just about ensuring that people have roofs over their head. They are about support for the homeless and ensuring that our housing market works correctly. They are about tackling the scourge of rough sleeping, yet funding has been cut by 45.6%.

When a Government have created a £5.8 billion gap in local government funding, when everyone is saying that social care is on its knees, and when children’s services need an additional £2 billion, this Secretary of State, this Minister and this Tory Government stick their heads in the sand. They fail to give our services the money they need, and they ignore the crisis that is happening on their watch to our services and communities. We need a Government who are committed to our local councils and to rebuilding our communities. We need a Labour Government for the many, not the few.

15:33

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Mrs Heather Wheeler)]

It is a pleasure to serve under your chairmanship, Mr Evans—for the first time, I believe. I congratulate the hon. Member for Weaver Vale (Mike Amesbury) on securing the debate. For the record, I am married to a councillor, and I employ a councillor.

This is an important issue that the Government take seriously, and we recognise the hard work of our councillors, councils and council staff. The report sets out the National Audit Office’s view on the financial sustainability of the sector. I wish to take this opportunity to set out what the Government are doing to support local authorities and to design a fairer and more transparent system of funding that gives them more control over the money they raise. Every day, local authorities deliver vital services to the communities they serve. Like the rest of the public sector, they have had their part to play in helping to bring down the deficit. It is to their credit that they have continued to provide high-quality services, while delivering a better deal for the taxpayer. Indeed, so good are they that non-ring-fenced reserves have increased by 47% since 2011, to £21 billion in March 2017.

We take the funding of local government very seriously. That is demonstrated by the package of measures that we provide to local government as part of the 2018-19 finance settlement, which Parliament approved last month. The settlement confirmed a real-terms increase in resources for local government over the next two years, from £44.3 billion in 2017-18 to £45.6 billion in 2019-20. That is the third of a four-year deal, and it has reinforced our commitment to delivering more freedom and fairness, and greater certainty to plan and secure value for money. The deal has given English councils access to more than £200 billion of funding in the five years to 2020.

We recognise that pressures are growing, particularly in the light of higher than expected inflation—I was delighted, however, to hear today’s announcement that inflation is down to 2.75%—and pressures on services such as adult and children’s social care. That is why in the settlement we sought to strike a balance between addressing the pressures on services and the burden placed on taxpayers, by increasing the core council tax referendum principle by 1% to 3% for authorities in 2018-19.

[Andrew Gwynne]

But that is not a single penny extra from central Government. All the Minister has done is shift the burden from central Government on to local taxpayers. As I explained, a 1% increase in Tameside brings in £700,000. It is not enough, is it?

[Mrs Wheeler]

I thank the hon. Gentleman for that intervention and repeat: the money from this Government has increased from £44.3 billion in 2017-18 to £45.6 billion in 2019-20. The National Audit Office rightly noted that local authorities are increasing their spending on the social care services that councils provide to our elderly and vulnerable citizens, in the face of growing demand. This is why at the spring Budget in 2017 an additional £2 billion was announced for adult social care. This year we have seen how that money has enabled councils to increase provider fees, provide for more care packages and reduce delayed transfers of care.

[Mike Amesbury]

That still equates to a 3% reduction from 2010 to 2017. It is a real-terms reduction.

[Mrs Wheeler]

I am always delighted to hear the dexterity of mathematicians in this building. It is £44 billion up to £45 billion, which I see as an increase. [Interruption.] I will move on. Local government and the NHS have worked in collaboration this year to deliver significant improvements in care. That is highlighted by the 26% reduction in delayed transfers of care, when comparing February this year with February last year. That is not all, however, because a further £150 million is being made available in 2018-19 for adult social care support grants. That, alongside the freedom to raise more money more quickly through the use of the adult social care precept, and the improved better care programme, means that councils have access to £9.4 billion in dedicated adult social care funding over the three years from 2017-18 to 2019-20.

[Fiona Onasanya]

Listening to the figures being presented, I understand the proposition that there has been an increase in funding. However, as Labour Members have said in their contributions, in real terms this is not an increase because supply is not keeping up with demand. I feel that this is like the emperor’s new clothes—the emperor seeks to describe the elegant, flamboyant gown that he is wearing, but actually he is completely naked. The amounts that the Minister is talking about do not keep up with the demand. These are demand-led services, and that is the point we are seeking to make.

[Mrs Wheeler]

The hon. Lady makes her point very elegantly, but I prefer the dress she is wearing today to ones I might imagine.

Alongside the £150 million for adult social care support grants, there is the freedom to access £9.4 billion up to 2019-20. I make it absolutely clear that real improvements are being made in adult social care services. That is in relation to the delayed transfers that have happened and the change whereby the NHS is working so much better by working hand in hand with local government. There has been such an improvement.

Like the NAO, we recognise the importance of investment in prevention and in high-quality children’s services. That is why the Government have invested almost £250 million since 2014 to help the children’s social care sector to innovate and redesign service delivery to achieve higher quality and better value for money. We have also invested £920 million in the troubled families programme, reducing the number of children in need.

I would like to say something about our work to deliver a fairer funding settlement for local government—I do appreciate the comments from the hon. Member for Denton and Reddish (Andrew Gwynne) on this matter. We all know that we live in a changing world. Over the years, the current formula for budget allocations has served councils well, but what is right today might not be right tomorrow. The conditions that councils face, including demographic shifts in some parts of the country and new risks, mean that the system of financing local government also needs to change. We need an updated and more responsive way of distributing funding that gives councils the ability to meet the challenges of the future. That is why we are currently working with councils to undertake a review of local authorities’ needs and resources. There have been widespread calls for a thorough review, and we will deliver that.

We are committed to using the most up-to-date data available and, as far as possible, taking an evidence-based approach to both current and future demand. What we are looking to do is very important. We want to devise a new funding system that more fairly reflects modern needs. The Government aim to implement a new system, based on their findings, in 2020-21. Alongside the new methodology, in 2020-21 the Government are committed to giving local authorities greater control over the money they raise.

[Wera Hobhouse]

Will the Minister ensure that no council gets less money as a consequence of the new funding formula that she is proposing?

[Mrs Wheeler]

Much as I would love to do that, I think the safest thing I can do is refer the hon. Lady to the new funding for schools. Every single school has not had a reduction under the new fairer funding; every single school has had an increase of at least 1%.

[Thelma Walker]

rose—

[Emma Hardy]

Will the Minister give way?

[Mrs Wheeler]

No, I am going to carry on. As I said, alongside the new methodology, the Government are committed to giving local authorities greater control over the money they raise, which we are doing through our plans for increasing business rates retention. Local authorities are the engines of local growth. They know best the levers to pull to boost their business rates, which is why business rates retention is an important move. Our aim is for local authorities to retain 75% of business rates from 2020-21, with the other 25% going to councils that do not have a large business rates take.

[Emma Hardy]

On that point, if I am not able to make the point that I was going to make previously, I want to ask this: will the system make allowances for councils such as Hull? Currently, 81% of its income comes from the Government revenue grant and only 19% can be raised locally.

[Mrs Wheeler]

Yes, indeed. Forgive me for repeating myself, Mr Evans: 25% will go to the councils that do not have large business rates retention.

[Emma Hardy]

The Minister says 25%. Hull City Council currently relies on the Government revenue grant for 81% of its income, not 75%.

[Mrs Wheeler]

The business rates for the City of London are many, many millions of pounds. The money that is split out goes to the rest of the country.

[Andrew Gwynne]

Of course, this is not just about the councils that are unable to raise enough business rates to support their services now. Will adequate funding mechanisms be in place to ensure that if a large employer were to close and leave a council that is currently sustainable in terms of business rates, it would in effect get the shortfall created by the employer moving out or closing down?

[Mrs Wheeler]

I would be devastated if that happened and I cannot imagine why it would happen, with the growing economy that we have.

We will continue to work with the sector to identify opportunities to increase the level of business rates retention further at the right time. We are already making progress towards that. The Government have announced an expansion of the piloting programme for business rates retention into 2018-19. In the latest round of pilot bids, more than 200 authorities put themselves forward, demonstrating local government’s enthusiasm for business rates retention. We are enthusiastic about working with them to take that agenda forward. We will be taking forward 10 new pilots, covering 89 authorities, instead of the five that we originally planned. A further pilot will begin in London in 2018-19, and existing devolution pilots will continue in 2018-19. The 10 that we have selected, taken alongside the existing pilots, give a broad geographic spread.

[Mike Amesbury]

At what stage will the Government legislate, as they previously stated they would, to ensure that there is 100% business rates retention? And surely, as part of the funding mix, an area-based grant needs to be retained.

[Mrs Wheeler]

I am afraid that the hon. Gentleman will have to wait for that to happen.

I referred to a broad geographic spread. That was carefully thought through, as we want to see exactly how the system works across the country, and the pilots will ensure that that happens. The expansion of the pilots, and our plan to do more piloting in 2019-20, is how the Government are listening to the voice of local councils. The precise benefit to the areas involved will depend on the economic growth that they achieve. I am very keen to see what we can learn from these and the other pilots. We should be clear: the system of business rates retention is helping local authorities to benefit from the proceeds of growth.

[Dan Carden]

Does the Minister agree with us that, actually, a fair funding formula is about the requirements of the citizens who live in the area, and that that has to be the responsibility of not just local government, but national Government? I invite the Minister to come to Liverpool to see what would be the consequences of any business rates changes before they take place.

[Mrs Wheeler]

I thank the hon. Gentleman for that kind invitation; I am sure that eventually that will happen. Thanks to the business rates retention scheme, local authorities have had approximately an additional £1.3 billion of funding to support local services in 2017-18. That is over and above their core settlement funding.

Investment is important, but it is also vital that local government continues its work to deliver better value for money. Local government has a strong track record on efficiency, setting an example to other parts of the public sector. My right hon. Friend the Secretary of State and the Under-Secretary of State, my hon. Friend the Member for Richmond (Yorks) (Rishi Sunak), who is responsible for local government, are keen to continue to work with the sector to increase transparency and share best practice and to harness the power of digital to transform services.

I am glad that we have had this chance to discuss the National Audit Office report. It is good that the NAO has recognised the positive work of the Department in getting to grips with the challenges across local government. I believe that the Government have shown that we are alive to the challenges that the sector faces and have a coherent plan for reform.

I thank the hon. Member for Weaver Vale for calling a debate on this important issue. I look forward to working closely with many colleagues over the coming months and discussing some of the challenges and opportunities facing the local government sector, and I look forward to hearing the hon. Member for Weaver Vale winding up the debate now.

15:48

[Mike Amesbury]

I thank you, Mr Evans, and the Minister. Of course, I too am disappointed at the austerity clearly displayed on the Government Benches—that symbolises the Government’s relationship these days with local government.

It is clear that we are at a watershed moment. The National Audit Office paints a stark picture, highlighting the genuine risk to statutory services. It is clearly time to change the record. Austerity is not working. It is a political choice. Certainly, as my hon. Friends have pointed out, it is not a sound financial one. Councils are crying out for certainty and are desperate to fund vital services and create better, healthier, more prosperous communities for all. We are a wealthy nation and must get our spending priorities in order. Rather than giving the richest corporations and individuals billions of pounds in tax cuts, let us fund local government services and help the most vulnerable to thrive and reach their full potential. We demand and need fair funding for all, now.

Question put and agreed to.

Resolved,

That this House has considered the National Audit Office report on the financial sustainability of local authorities, HC 834.

15:49

Sitting suspended.

Vauxhall Factory, Ellesmere Port

Tuesday 20th March 2018 Westminster Hall

[Andrew Rosindell in the Chair]

15:59

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I beg to move,

That this House has considered the future of the Vauxhall factory in Ellesmere Port.

It is a pleasure to serve under your chairmanship, Mr Rosindell. When I am at home in my constituency, I get up to go to work and I head off in my Astra, of course. I go past many houses where Vauxhall employees and pensioners live, and many houses where the family and friends of people who work at Vauxhall live—and that is before I get to the end of my street. At the end of the street, I drive past a newsagent that relies on trade from Vauxhall employees, like many other local businesses. As hon. Members will understand from what I am saying, Ellesmere Port is synonymous with Vauxhall Motors.

The first Vauxhall Viva rolled off the production line in 1964. As the plant grew, so did the town. There is virtually nobody who lives in Ellesmere Port who does not have some connection with the plant. At its height, it employed around 12,000 people. Sadly, with recent job losses, the number is about a tenth of that today, but it is still substantial. We also have to take into account the fact that for every person employed at the plant, three other people are employed in the local economy. There is also the potential for greater numbers should we increase from single-shift production again in the future.

Vauxhall remains a big part of the local economy. We should build our future success on such jobs: highly skilled, permanent jobs that manufacture something of national and local pride. Vauxhall’s advertising material makes much of the significance of its being a UK manufacturer, but this is about more than being a UK manufacturer, or a key part of the local economy.

[John Spellar (Warley) (Lab)]

My hon. Friend is right to stress that Vauxhall is a UK manufacturer. Is it not absurd, and frankly disgraceful, that so many public bodies—including police forces—buy vehicles from abroad? Some use Astras, but many others buy from companies that do not even have a presence in the UK. Should we not take that issue on?

[Justin Madders]

My right hon. Friend is absolutely right. We have had debates about that before. He reminds me of the time when we talked about the police in France using Citroëns and Renaults; the police in Germany using Mercedes and BMWs; and the police in Spain using SEAT vehicles. As a nation and as an economy, we should do much more to take advantage of our procurement power.

[Ms Angela Eagle (Wallasey) (Lab)]

I congratulate my hon. Friend on securing this important debate. Does he recognise that my constituency contains Vauxhall workers as well? Their economic future is reliant on the Government’s decisions in the Brexit negotiations, particularly given that they have decided to leave the single market, which puts those jobs at risk.

[Justin Madders]

My hon. Friend is absolutely right that the footprint is much wider than Ellesmere Port—it goes into north Wales, and hon. Friends from that part of the world are present. Brexit is key to the plant’s future, and I will go on to address that shortly.

It is not just about economic impact. The plant is a big part of the town’s local identity. From the 30 kids’ football teams that play under the name “Vauxhall’s”, to the sports and social club that has had huge investment in new 3G pitches and the kids at school who see working at the plant as part of their family tradition, it is a major part of our community, and we do not want to lose it.

The plant has regular fights for survival. Every five years or so, when the next model is being discussed, plants across Europe are effectively pitted against one another to bid for the next job. In the past, the productivity and co-operation of the local workforce, combined with the tremendous leadership of Unite the Union, of which I am a member, in its work with management, have put us in the best possible position to secure future work. That partnership is an exemplar of how to conduct employee relations for the benefit of everyone.

[Ian C. Lucas (Wrexham) (Lab)]

My hon. Friend is making a powerful case. Is that partnership of unions, employers and Government working together not the reason why the UK has been effective in beating off competition from mainland Europe to secure jobs in the past? That is what we need to do in the future.

[Justin Madders]

My hon. Friend is absolutely right. Initiatives such as the Automotive Council have seen the UK car industry go from strength to strength. As we know, however, every time a model comes up for renewal, it gets a little harder, the demands are greater and the workforce have to sacrifice a little more. It is a challenge we have always been equal to in the past, but the convergence of factors undoubtedly makes securing the next model our biggest challenge yet.

The latest edition of the Astra became European car of the year in 2016. It enjoyed great success, particularly in the sports tourer model, which led to 80% of the vehicles built in Ellesmere Port being exported to Europe. Despite that, in recent months, tastes have changed and there has been a dramatic slowdown in sales for that type of vehicle.

[Mike Amesbury (Weaver Vale) (Lab)]

Does my hon. Friend agree that our Vauxhall plants, including Ellesmere Port, are among the most productive in the PSA Group family?

[Justin Madders]

Yes, I would like to say that they are, but we are now being judged by a new benchmark. I will go into some detail about how things are being counted against the workforce’s excellent productivity.

The cuts in sales have led to cuts in the workforce, with 400 jobs going in October and another 250 earlier this year. In the past, a downturn has led to agreements between the unions and management about reduced hours to protect jobs, but the new owner, the PSA Group, has shown a different approach. That must act as a warning that we cannot expect any sentimentality from it, and that, as it has said consistently from the day it took over, plants will be judged on their efficiency.

History tells us that the local unions and management are well capable of meeting that challenge, but numerous factors are at play that will impede their ability to do that. It is our job—not just the job of the Opposition, but of the Government—to help them to overcome those obstacles in a highly competitive market.

Let us start with the big challenge: Brexit. Uncertainty across a sector can have a real impact on investment decisions. As we know, investment decisions in the automotive sector are traditionally made three to five years in advance, so decisions about investment in the post-Brexit world will begin to be made shortly.

In that respect, the timing could not be worse, as the current model in production in Ellesmere Port is due to be discontinued around the same time, in 2021. The chief executive of the PSA Group recently said:

“We cannot invest in a world of uncertainty.”

Some might say that is an excuse. Some might call it a distraction. I do not mind what it is called, as long as we do not ignore it.

After the Prime Minister’s Mansion House speech, the PSA Group and other manufacturers in the sector made similar points about the lack of the clarity, so I asked her to provide certainty by confirming that the trading arrangements in the automotive sector will be no less favourable than they are now. I am sorry to say that her answer did not give any clarity and there was certainly no unequivocal guarantee.

[Frank Field (Birkenhead) (Lab)]

Might I put on record what we have spoken about in private, that we should go to see the Secretary of State for Exiting the European Union and push for a sectional deal, particularly for Vauxhall and other companies producing cars and vans in this country? A second stage could be that we get unions and management in France and Germany to effectively lobby their Governments.

[Justin Madders]

My right hon. Friend is absolutely right to say that the sector is too important to be left on its own. It directly or indirectly employs around 800,000 people and generates almost 10% of the country’s manufacturing output. Half of all the UK’s car production is exported to the EU, and that figure goes up to between 70% and 80% for the Vauxhall plant in my constituency.

[Matt Western (Warwick and Leamington) (Lab)]

I concur with my right hon. Friend the Member for Birkenhead (Frank Field). Does my hon. Friend agree that the statement made by the CEO of the PSA Group, Carlos Tavares, is a canary in the mine? It is the first warning about Brexit and the serious impact it will have on our economy.

[Justin Madders]

That is certainly a huge concern locally. We do not want to get into a game of pointing fingers; we want action, certainty and investment in the plant, but it will be a challenge. A report by the Business, Energy and Industrial Strategy Committee recently concluded that

“leaving the EU without a deal would undoubtedly be hugely damaging to the UK automotive sector, more so than to other European countries… Overall, no-one has argued there are advantages to be gained from Brexit for the automotive industry for the foreseeable future.”

Now that we are leaving the EU, it is important to recognise that there is no upside for one of our most vulnerable and important sectors. We must do everything possible to safeguard jobs and investment, because history shows us that once manufacturing jobs are lost, they very rarely come back.

So far, the Government’s response has been denial. We need them to work tirelessly to reassure major international companies that their future competitiveness will not be fatally undermined by tariffs or regulatory divergence, and that they can invest with confidence. I want us to get into a position in which Brexit cannot be used as an excuse not to invest in UK manufacturing. A clear and unequivocal commitment to a customs union would help, so that the many parts that travel back and forth across the continent can do so without impediment and without the final product becoming uncompetitive. The Society of Motor Manufacturers and Traders has estimated that failure to properly cater for such issues in the negotiations could result in an increase of more than £1,500 in the average cost of a vehicle. What business can absorb that without a massive impact?

There is a school of thought that says that some sort of customs union will prevent us from striking up trade deals on our own, but as the BEIS Committee said, the reality is that there are no advantages for the automotive sector from Brexit. If asked to choose between preserving trade with up to 80% of existing customers or knowingly jeopardising existing trade in exchange for the chance of some new business with unspecified countries at an unspecified future time, I believe most people would go for the former and protect existing jobs.

All I have seen from Cabinet Ministers who have been pressed on the issue is bluffing, complacency and dangerous fantasies about a green and pleasant land. The automotive industry will survive and flourish only if we protect it now. I do not expect the Minister’s reply to provide the laser-like clarity that has been missing so far, so I will focus instead on matters that are wholly within the Government’s gift, that are not down to negotiations, that can make a real difference now, and that would still be key to securing the plant’s future even if a new model were announced tomorrow.

The first such matter is business rates, which can have a deterrent effect on investment and can mean that efficiencies have to be sought in alternative areas. Some 60% of the total property tax bill of the former Opel group came from the UK, even though the UK accounted for only 8% of the group’s total footprint. In Germany, significant rate reductions are provided to large companies that are intensive energy users.

[Alison McGovern (Wirral South) (Lab)]

rose—

[Andrew Rosindell (in the Chair)]

I call Angela Rayner.

[Alison McGovern]

All red-headed women are actually the same, Mr Rosindell, so do not worry.

Is my hon. Friend aware that I went to see Treasury Ministers well over a year ago about the business rates problem in car manufacturing, but they were simply unable to do anything? Does he agree that when it comes to meeting the challenge of Brexit and keeping manufacturing jobs in this country, that sort of approach is just not going to work?

[Justin Madders]

My hon. Friend is absolutely right. The motor industry has been pressing on the business rates issue for several years, and it pressed again this year; I know that hon. Members with an interest in the subject have pressed on it, too. The case argues itself. An EY study has demonstrated that de-rating certain types of plant and machinery, not just in the automotive sector but across manufacturing, could stimulate additional investment of more than £8.7 billion and support an additional 33,000 jobs per annum. That is something we can do, and the argument for doing it is clear.

Let me give another example that relates to Brexit. If Vauxhall invested in solar panels on the site in the attempt to save on energy costs, it would attract a higher business rate. That does not seem in tune with much of what the Government are trying to achieve. Vauxhall has learned that its energy costs per MWh are twice those of plants in France. That has a massive impact on the competitiveness of the vehicles that it manufactures. I am grateful to the council and the local enterprise partnership for their work to address the issue by helping to source a local low-carbon supply for the plant. That will inevitably require some infrastructure investment, so I urge the Minister to keep in close contact with the LEP to ensure that everything possible is done to facilitate the proposal.

The final piece of the jigsaw is about taking a challenging part of the current set-up and reusing it to enhance the site’s overall viability. A good deal of land on site is surplus to requirements; as the number of people employed there has shrunk, so has the need for the land that the plant sits on. At the moment, only about a quarter of the Astra’s parts are sourced from the UK supply chain, and there has long been an ambition to increase that substantially. Given the uncertainties over future customs arrangements, the opportunity to utilise spare land to help local automotive suppliers to base themselves closer to the manufacturing site has many benefits. It will reduce transportation costs, improve productivity by providing more certainty about delivery, and benefit the wider community and environment by reducing lorry miles and thus emissions. Most of all, it will be a bulwark against a disadvantageous future customs arrangement.

[David Hanson (Delyn) (Lab)]

My hon. Friend will know that approximately 400 people from north Wales work at the plant. I urge him, along with the Minister, to contact the National Assembly for Wales. The Welsh Assembly Government, in co-operation with the UK Government, can help with infrastructure and with many of the issues that he raises.

[Justin Madders]

I thank my right hon. Friend for his intervention. He and I work with many other hon. Members in the all-party group on Mersey Dee North Wales. We recognise the symbiotic relationship in the north-west between Cheshire, Wirral and north Wales, and the interchange of people who move between those areas’ economies. I will certainly work with him and his Welsh Assembly colleagues on the matter.

Reshoring the supply chain is a clear element of the Government’s industrial strategy, although so far I have seen no financial or practical steps taken to deliver it. We need the Government to designate the area around the plant as a local enterprise zone to incentivise suppliers to relocate there. That would benefit the local supply chain, boost the local economy, provide more jobs and raise productivity. It would be a tremendous vote of confidence in the plant, so I urge the Minister to come back with a positive response as soon as possible. It would not only help Vauxhall, but help to improve the competitiveness of other motor manufacturers in the region.

The Vauxhall plants in Luton and in Ellesmere Port are among the most productive in the PSA family, and some of the most popular vehicles in the country are made there. We know that we are in a time of uncertainty and enormous challenge, but I do not see decline and closure as inevitable. We need to build on the positives. There can be no doubt that the ability to say that it supports British manufacturing boosts the company’s sales. Nor can there can be any doubt that the local management and workforce are committed to delivering the best. That commitment must be matched by the Government, ideally in the ways I have set out today, so that the owners are in no doubt that this is a community and a country that they want to invest in. When I go home, I want to be able to tell my friends and neighbours that Parliament is united and determined to give them all the backing they need to enjoy another half-century of production at Vauxhall Motors.

16:17

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)]

It is a great honour to serve under your chairmanship, Mr Rosindell. I perfectly understand your mistake in confusing the hon. Member for Wirral South (Alison McGovern) with the hon. Member for Ashton-under-Lyne (Angela Rayner); I myself am regularly mistaken for my hon. Friend the Member for Northampton North (Michael Ellis). I have sued people for less, but I am sure that that will not be necessary in this case.

I congratulate the hon. Member for Ellesmere Port and Neston (Justin Madders) on securing this debate, and all right hon. and hon. Members on their contributions. I take the automotive industry very seriously, which is why I asked for it to be included in my portfolio—not just Vauxhall at Ellesmere Port, but the automotive industry in general. I have met quite a few people in the industry since I first became responsible for it, and further to this debate I will be happy to meet any Members for constituencies in the area; it might be better if we organised that through the all-party group, but I leave the decision to them. I hope that right hon. and hon. Members know that my door is always open, and I really mean that—it is not just a platitude. They have said some quite critical things about the Government, but that is their job and I quite understand it.

I know that Vauxhall’s history is very important to it. The PSA senior management, from Carlos Tavares down, have made clear to my right hon. Friend the Business Secretary the value they place on Vauxhall’s historic brand and the commitment of its workforce. They have emphasised their intention to build on those strengths. That positive message was reiterated when the PSA Group launched its turnaround plan in November, which it called PACE, aiming to bring Vauxhall and its sister brand Opel, which were with General Motors, to profitability by 2020. Mr Tavares again made a clear commitment to Vauxhall and expressed the intention to avoid forced redundancies or the closure of any Vauxhall plants. He has consistently said that he wishes to exploit in full the company’s potential in the UK.

We have regularly met senior management, within both Vauxhall and the PSA Group, and we will continue to do so. Discussions have been based on the future strategic direction for the PSA Group and Vauxhall, and on the outstanding and supportive environment that exists here for advanced manufacturing businesses and investment.

I was disappointed, as I am sure everyone in this Chamber was, at the announcements in October last year and in January on the voluntary reductions in the workforce at Ellesmere Port. Vauxhall has made it clear that the decision was taken to safeguard the competitiveness of the plant in an ever more challenging environment across Europe. I accept what hon. Members have said about the impact of those announcements on their constituencies and about how few people now work at Ellesmere Port compared with the past, as well as about the importance of those people to the local economy and their supply chain.

Ministers—more recently including myself—have stayed in touch throughout with key decision makers from both Vauxhall and the PSA Group, and very helpfully with leaders from Unite and other unions, too. We have pressed the case for Vauxhall’s plants and highlighted the excellent UK workforce, and we will continue to do so.

The hon. Member for Ellesmere Port and Neston made a fine speech—I do not want him to think that I objected to much of it, because I agreed with a lot of it—but I reject his claim that we are in “denial” about what is happening. I will come on to Brexit business in a moment, but I do not think that claim is true, and I would tell him that privately or publicly on the record.

We have shown that auto investment is important in the UK. Recently, Toyota announced that its new model would be built in its plant at Burnaston and there have been other announcements in the last year from Nissan, BMW and Lotus. We can do it, and global demand for vehicles designed, engineered and manufactured in the UK is strong.

[Christian Matheson (City of Chester) (Lab)]

I am most grateful to the Minister for giving way. There is a Toyota plant next to my constituency, in the constituency of my right hon. Friend the Member for Delyn (David Hanson). Are not investment decisions such as those the Minister has mentioned taken three years in advance? That decision by Toyota had already been taken and was known even before the Brexit referendum had taken place.

[Richard Harrington]

I thank the hon. Gentleman for his intervention, but I do not believe that that is the case; if Toyota was concerned, particularly about the Brexit issue, whatever decision it may have taken was certainly not finalised until well after the referendum. By the way, I look forward to visiting the Toyota plant in the constituency of the hon. Member for Wirral West (Margaret Greenwood)—I think it is in her constituency—quite soon.

[David Hanson]

It is in Deeside.

[Richard Harrington]

I do beg your pardon—in Deeside. Well, I look forward to visiting it anyway, and if I was invited to visit Ellesmere Port I would be very pleased to do so, subject to an agreement with the Conservative Whips.

[Ms Angela Eagle]

I thank the Minister for giving way. All of us who have an interest in this issue welcome his interest in the automotive plant, but we want a little more from him than that, since he is the Minister. Can he give us an answer on the issue of rate relief? Will the entire area be given the special status that my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) asked for?

[Richard Harrington]

Well, I have seven minutes and I will do my best to satisfy hon. Members, but as I say my door is open to anybody—

[Ms Angela Eagle]

Just say yes now; it does not take seven minutes to say yes.

[Richard Harrington]

The hon. Lady has been in government herself, so she knows that sometimes seven minutes is not enough to deal with these matters.

The automotive industry is very important for the industrial strategy, which is our cornerstone policy. We have announced quite significant sums of money— £80 million—for battery scale-up facilities in the west midlands, and I believe that the automotive industry, with the advanced propulsion centre and everything else, is absolutely critical to us. I hope that can help the situation at Ellesmere Port, because it will provide a framework for a modern industry of the future.

As far as Brexit is concerned, I recognise exactly the uncertainty that has been mentioned by the hon. Member for Ellesmere Port and Neston, and others. It is very important; we are not in “denial” about it. However, what I would say is that the automotive industry has been used as a model by my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy. For example, it was well publicised that at Chequers the automotive industry and its interlink with all of the companies in the supply chain, and everything in Europe, was used as an example; what my right hon. Friend would call, quite rightly, an “exemplar”.

Yesterday’s conclusion of the negotiations between the Brexit Secretary and Michel Barnier, with the transition period, showed that exactly the sort of thinking that we need for the automotive industry is recognised by our own Government and by the European Union. I am confident that that is largely the result of successful Government lobbying by the automotive industry—in which, of course, Vauxhall has taken part.

[Alison McGovern]

I thank the Minister for giving way. Is he saying that, given that the automotive industry was used as such an “exemplar”, the kind of arrangements agreed for the period of transition are those that we can expect to help the automotive sector in perpetuity?

[Richard Harrington]

Yes, I would hope so. I accept the fact that we are leaving the European Union, but I believe that common sense will prevail about the frictionless and free movement of trade between ourselves and the European Union. I think the hon. Lady is quite aware of my views on that.

Yesterday’s milestone on the implementation period will help in the short term to alleviate some of the fears mentioned by Mr Tavares and others.

[Justin Madders]

rose—

[Richard Harrington]

I will not take the intervention, but only because of the time; under normal circumstances, I would be happy to take it. I do not want to annoy Mr Rosindell on this subject, and I am determined to do as much as I can. We as a Government are certainly determined to ensure that the UK continues to be one of the most competitive locations in the world for automotive and other advanced manufacturing.

Our vision is of a UK that is a

“champion of free trade based on high standards”,

not on low standards, and we hope that global Britain will forge

“a bold and comprehensive economic partnership with our neighbours in the EU, and reaches out beyond to foster trade”,

which I hope will help Ellesmere Port.

The right hon. Member for Delyn (David Hanson) said that we should be involved with the Welsh Assembly and others; I am very happy to meet Welsh Assembly Members. I have heard very good reports about the local enterprise partnership and it seems a very sensible idea to work with it. I would be happy to include the Welsh Assembly within any discussions on this matter.

To conclude, we are absolutely committed to a successful Vauxhall, so that it remains and thrives in the UK, both at Ellesmere Port and at the company’s plant in Luton. We have made our strong commitment absolutely clear to the company and it has full access to the support available through our industrial strategy. We want Vauxhall to be successful and—

[Ian C. Lucas]

Will the Minister give way?

[Richard Harrington]

I have not got time. We want Vauxhall to be part of a thriving economic situation. [Interruption.]

[Andrew Rosindell (in the Chair)]

Order.

[Richard Harrington]

I do beg your pardon, Mr Rosindell. People were asking me to give way, but I have only two minutes.

I am happy to continue this debate offline, and to have a meeting with the hon. Member for Ellesmere Port and Neston and any colleagues. Perhaps we could do that through the all-party parliamentary group; I leave it to them to decide. Some important questions have been asked, but I assure the hon. Gentleman that we are not in “denial” and we want a prosperous Vauxhall. We want Ellesmere Port to be part of that.

[Andrew Rosindell (in the Chair)]

You still have a minute and a half.

[Richard Harrington]

Yes. Thank you, Mr Rosindell.

[Ms Angela Eagle]

Mr Rosindell—

[Andrew Rosindell (in the Chair)]

Order. The debate is over, I am afraid. The Minister has offered to continue the debate after this, so I suggest that you speak to him later.

Question put and agreed to.

Scottish Welfare Powers

Tuesday 20th March 2018 Westminster Hall

16:30

[Bill Grant (Ayr, Carrick and Cumnock) (Con)]

I beg to move,

That this House has considered Scottish welfare powers.

It is a pleasure to serve under your chairmanship, Mr Rosindell. I extend my thanks to Members from both sides of the House who have turned out to debate this important issue for Scotland.

The Scotland Act 2016, which was delivered by a Conservative Government to the people of Scotland to implement the recommendations of the Smith Commission, has elevated the Scottish Parliament to one of the most powerful devolved legislatures in the world. It has unprecedented power at its disposal, including over some welfare and social security elements. I am proud of my party’s record on devolution. It is the Conservatives who are delivering on devolution. It is this party that gave the Scottish Parliament the powers to top up existing benefits, make discretionary payments and even create entirely new benefits. In total, the Government have devolved 30% of working-age benefits in full, meaning that Scotland has significant control over its welfare system. The question now is how those powers are used.

Between the powers held by this Parliament and those rightly held in Holyrood, the welfare system in Scotland should, I believe, be based on three overarching principles. First, we must always ensure that adequate support is available for the most vulnerable in our communities, and we are rightly proud that in this country we have a system designed to offer a safety net to those who need it most. Secondly, any welfare system must be flexible and, where possible, personalised. Far too often we approach these debates with a singular focus on numbers and statistics. We must remember that behind every one of those numbers is an individual or a family with their own set of unique circumstances, and any welfare system must be able to work for each and every one of them.

[Chris Stephens (Glasgow South West) (SNP)]

I thank the hon. Gentleman for most kindly giving way on my birthday. Does he believe that social security is also a human right?

[Bill Grant]

That is an interesting question. We cannot see people going without entirely, so yes, I would lean towards its being a human right. Social security is a safety net that in this country, and in Scotland, we can be proud of providing, and I hope that we are able to do so for a long time to come, through a good, strong economy and people in employment.

The third principle is that the welfare system should give those who can and want to work the opportunity to do so. That is an essential part of its modernisation. It has rightly been the guiding principle of welfare reforms across the UK in recent years, and we should not underestimate the dignity and sense of fulfilment that accompany employment.

It is with those principles that I have approached the debate today, but one further important requirement underpins them all, which is that the system works. That sounds very simple and easy, but I am increasingly concerned that the Scottish Government are simply not moving fast enough to ensure that it does. Hundreds of thousands of people receive the benefits, so it is vital that the devolution of powers is delivered safely and in an orderly way. It is vital also that people know what will happen under the new system, that the Scottish Government think through policy properly and that they have the structures up and running to take over the important responsibilities.

[Neil Gray (Airdrie and Shotts) (SNP)]

Has the hon. Gentleman articulated any of those concerns directly to the Scottish Government?

[Bill Grant]

I can honestly say no, but I believe that it is not my role to do so at this juncture. The hon. Gentleman may have a different view, which I fully respect. If there is a need to do so, I will certainly take him up on that.

This is no easy feat. I accept that we cannot just magic up a new welfare system. I do not underestimate how much work must be done. We have known the timeline for the devolution of the powers for quite some time now, yet there is still no real detail about how the Scottish Government intend to use the important main powers. The fact is that Scottish National party Ministers in Scotland are proceeding exceptionally slowly with implementing this aspect of devolution. I suspect that the SNP is now beginning to realise that creating a welfare system that is fair to everyone, including taxpayers in the UK and in Scotland, is not an easy task. That I accept.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Disabled people across the UK have suffered a cut in their disability benefit of £30 a week under the Welfare Reform and Work Act 2016, and the Institute for Fiscal Studies says that some 10,000 disabled claimants in Scotland will have to find £1,400 a year. Does the hon. Gentleman believe that to be fair?

[Bill Grant]

Disability funding has increased over this Parliament, and will continue to do so. Fairness is a double-sided coin. The hon. Gentleman will learn that in the Scottish Government. Fairness must apply to the taxpayer and to those who receive assistance. I am sure that he agrees.

[Alison Thewliss (Glasgow Central) (SNP)]

The Equality and Human Rights Commission produced a report last week that suggested that 75% of cuts have fallen upon Pakistani families in England. Does the hon. Gentleman think that is fair?

[Bill Grant]

I have to take the hon. Lady’s word for that. I have not seen that report. I have no reason to doubt it, but I would have to know more about it before I agreed to apply the word “fairness.”

Disability benefits are being devolved by April 2020, and we have been promised that a new Scottish social security agency will be up and running, ready to take on the handling of welfare issues, in time for the next Scottish election. Time is moving on, yet many of the details are still desperately lacking. For example, we do not know how the system will interact with and work in parallel with the UK system and the Department for Work and Pensions. Might the Minister be able to indicate whether he has discussed that with his Scottish counterparts? That might reflect on the hon. Member for Airdrie and Shotts (Neil Gray) tasking me with that job.

That lack of detail and policy is a concerning feature of the SNP Government’s approach to welfare. We know that they will take over responsibility for benefits such as disability living allowance and personal independence payments. What we do not know, however, is precisely what their policy will be on disability benefits. What assistance do they propose for people with disabilities? How will claims be made, assessed and processed through the system? How much will people be able to receive?

[Neil Gray]

With due respect, the hon. Gentleman is clearly not following proceedings in Holyrood. At the Committee stage alone we discovered from the Scottish Government—supported, I think, by the hon. Gentleman’s colleagues in Holyrood—that the medical information required for the assessments will be gathered by the social security agency so that there will be a reduction in the need for face-to-face intervention. That is just one area in which we know there is clear detail from the Scottish Government.

[Bill Grant]

That progress is fairly slow, but I welcome it.

[Stephen Kerr (Stirling) (Con)]

Reference was just made to the Scottish Social Security Committee report. In its conclusions, it in fact states:

“There have been a number of consistent concerns raised about the Bill, in particular the balance between what is contained in the Bill and what will be in regulations.”

The distinct lack of detail in the Bill is causing parliamentarians and outside interest groups grave concern.

[Bill Grant]

I thank my hon. Friend for that intervention.

[Neil Gray]

Clearly the hon. Gentleman’s colleague is also rather behind the times on how the process works in Scotland. That report came before the Social Security (Scotland) Bill went to its Committee stage in its passage through Holyrood.

[Bill Grant]

I will not be the referee on what is right or wrong in the report, but the truth will be in there somewhere.

Most worryingly, the detail we have from the SNP simply has the look of an attempt to move away from Westminster systems and be different just for the sake of it. Take disability benefit assessments, for example. One of the first and only changes that the SNP has announced is over the role of the private sector in those assessments. It has yet to justify that approach, and I am not clear what the actual benefits will be.

[Chris Stephens]

The hon. Gentleman is being most generous in giving way. Is the role of the private sector in assessments not best covered by the recent Work and Pensions Committee report, which documented individual men being told by the DWP that they were in actual fact pregnant? Does that not tell us that there is something wrong with the private sector dealing with assessments?

[Bill Grant]

I do not think that I would pass judgment on the private sector system based simply on that one example. You can pick out poor examples from any system. Any identified problem will be rectified. The Government have been rectifying issues over a long period of time.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

Are you seriously coming to the Chamber today and telling us that since you have been elected, no constituent has come to you to complain about the way their applications for DWP assessments have been treated? Is that what the hon. Gentleman is telling us? If he is telling us that, it must be the only constituency in Scotland where that is the case.

[Bill Grant]

I respect the hon. Lady’s intervention, but for clarity, I never indicated or suggested—sorry if you have interpreted it as such—

[Andrew Rosindell (in the Chair)]

Order. I remind Members that the word “you” refers to the Chair.

[Bill Grant]

My apologies. I checked with the office. Cumnock jobcentre went live on 25 October last year, and in February this year the two other jobcentres in my constituency, Ayr and Girvan, went live. I think we have had six inquiries in total in that time. By the time my office staff got back to them, I think two or three of them had self-resolved and the system had resolved the others. The dark side of universal credit in terms of the changes is not self-evident.

[Stephen Kerr]

I am grateful to my hon. Friend for his generosity. Surely the whole point of this debate is not the issue raised in the previous intervention by the hon. Member for North Ayrshire and Arran (Patricia Gibson), but what will happen to social security in Scotland in future. That is what my constituents have grave concerns over.

[Bill Grant]

I thank my hon. Friend for that. It may be prudent for us to focus on the purpose of the debate. The SNP appears to be unprepared for the powers it has demanded for so long. It has repeatedly demanded powers—it could be called a power grab—and it has now been granted them. We urgently need to know whether the Scottish Government will be ready to take on responsibility for welfare by 2020, as is planned, or whether they will have to ask the UK Government to delay the process. I hope that later in the debate the Minister will touch on some of the contingency plans we must have, as we cannot allow the Scottish Government’s delays to impact on those who rely on these benefits.

[Drew Hendry]

At the very least, the hon. Gentleman is being generous in taking interventions. Can I clarify something with him? He is saying that the Scottish Government are not taking action ahead of time. Does he support the hundreds of millions of pounds that the Scottish Government have put into mitigating the bedroom tax in Scotland?

[Bill Grant]

I have no issues. That is the choice of the Scottish Government, and I respect their choice. They have chosen to do that.

From what we do know of the SNP plans, we can see that they are likely to be incredibly expensive. The Scottish Fiscal Commission said that devolved welfare spending—this is an astronomical rise—will increase by nearly 50% between 2017 and 2023, going from £330 million to £470 million of taxpayers’ money. It is never the Government’s money; it is the tax raised from the hard-earned income of those in employment. Of course any system must be able to cope with the needs of those who depend on it, and do so adequately, but my concern is that the Scottish Government might devise a social security system that is so expensive that it will not provide fairness to taxpayers. The balance of need and affordability must be carefully considered.

[Alison Thewliss]

The hon. Gentleman seems to be suggesting that people are either claiming benefits or paying tax. Does he not agree that that is not the reality? Some people supported through tax credits are working.

[Bill Grant]

It might be my Scots accent that is causing an issue, because I did not indicate that. I said that the welfare system is generally dependent on those who earn money and pay tax, but there is a middle group. There are those who earn and who are not dependent on the welfare system, and those who are wholly dependent on it and are perfectly entitled to that support. The hon. Lady is right that there is a middle group where there is a balance of work with tax credits and assistance, and that is to be welcomed.

[Chris Stephens]

Will the hon. Gentleman give way?

[Bill Grant]

If the hon. Gentleman will bear with me, I want to make a wee bit of progress. Just like the policies themselves, there is little detail on future costs. It is important that we know how much things will cost and how taxpayers will be expected to fund the Scottish system. Are we going to see yet more tax rises for the people of Scotland, or will other services begin to see cuts? My Scottish Conservative colleagues and I have spoken regularly in this place about the need for Scotland’s two Governments to work effectively together, and that is true for welfare.

[Neil Gray]

Has the hon. Gentleman read the financial memorandum that was published for the Bill on Friday? Has he considered the Scottish Government’s remarks that suggest we will always pay for the social security system out of the funds we have in Scotland and any efficiency savings that come forward? Clearly the finances are there.

[Bill Grant]

I welcome the hon. Gentleman’s comments. I certainly hope that there are efficiency savings in that regard, but I am a bit sceptical.

Take universal credit, for example. The Scottish Government have made use of the flexibilities available, and they are well within their rights to do so, but consultation and information sharing with the DWP could be much better. In Scotland, claimants can choose to have the housing element of their universal credit paid directly to landlords. In England, the DWP does not simply pay people money and turn its back on them. If somebody has fallen two months in arrears with rent payments, a UK-wide system of alternative payment arrangements is triggered and rent can be paid, where needed, directly to landlords. It is best if individuals can manage their own money to match the working environment. It is important that they are allowed to manage their own money where they can and that there is a system to support them.

[Chris Stephens]

I thank the hon. Gentleman for giving way again. In terms of flexibilities, does he not accept the evidence that has been given to the Work and Pensions Committee, and to the consultations on the Social Security (Scotland) Bill, is that those moving on to universal credit who have been in work are paid weekly and fortnightly. The majority are paid that way, not four-weekly.

[Bill Grant]

I think I have indicated in the debate today that flexibility is a good thing. I welcome such things for people until they, for want of a more elegant phrase, get on to an even keel. It is a support system; it is not a permanent system. Where the system would benefit from flexibility, I welcome that.

[Ged Killen (Rutherglen and Hamilton West) (Lab/Co-op)]

The hon. Gentleman is talking about the flexibility now afforded to the Scottish Government in the payment of universal credit. Does he not agree that it is regrettable that his party and his favourite sparring partners the SNP voted down the Labour amendment to ensure that women in particular can be protected from financial abuse by being able to split universal credit?

[Bill Grant]

I support that. I think discussions are going on between the UK Government and the Scottish Government to resolve that. It is a serious issue, particularly in terms of abusive relationships and so on. I respect and support that point.

I am conscious of time. It is not clear how Scottish flexibility and the UK-wide alternative payment arrangements system will work together in the future, and both Governments must provide further clarity on that. Universal credit is an area where the Scottish Government have already exercised their devolved powers. While it is rightly a reserved benefit, it is also right and correct that it should be tailored to Scottish needs, but these flexibilities throw up issues that must be worked out between the two Governments. People in Scotland who opt for the flexibility of two-weekly payment may not be able to access things such as direct debits to secure lower utilities prices. Will the Minister commit to working with the Scottish Government to resolve such issues in the devolved system?

Providing welfare is one of the most important and complex tasks a Government delivers. As we move into the 2020s, the Scottish Government will rightly take on more and more responsibility in this area. By 2021, the leadership of the Scottish Government might look rather different—it might look much the same—but it must be ready regardless. We simply cannot afford for the SNP not to be ready. We know that it is a party that prefers complaining to governing, but that has to end now—the stakes for these individuals are far too high.

The UK Government promised devolved welfare and have kept up that end of the bargain. The SNP Government now need to get on with the work to secure a welfare system in Scotland. They need to be 100% focused on what to do with the powers. They need to ensure that Scotland is ready for this significant and important change. We are not there yet, but there is still time. Let us all hope that, for once, they rise to the occasion. Finally, I thank the staff of the Department for Work and Pensions, in offices around Scotland and the United Kingdom, for their continuing commitment to the needs of their clients on a daily basis, and for embracing change and digital technology.

00:00

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

Thank you, Mr Rosindell, for your expert chairmanship of the debate. We have had a spirited introduction from the hon. Member for Ayr, Carrick and Cumnock (Bill Grant), with some interesting re-writing of history regarding the Tory party’s legacy when it comes to defence of the welfare state in Scotland.

At every stage of the process of devolution, it is Labour that has led the charge. During the passage of the Scotland Act 2016, although the welfare provisions were agreed by the Smith commission, it was only the amendments tabled by my hon. Friend the Member for Edinburgh South (Ian Murray) that extended the new benefits in devolved areas, and top-ups in reserved areas. It was only his action that forced that change in the Lords, and pressure from the Labour party that ensured that that provision was included in the Act.

A huge opportunity has been presented to the Scottish Government with the extension of welfare powers. That is exactly what devolution was intended to do. Remember that the spirit of devolution was set up in the face of rampant Thatcherism and the rolling back of the industrial and welfare settlement that Scotland had enjoyed since the end of the second world war.

[Stephen Kerr]

On a point of information, Mrs Thatcher left office in 1990. The devolution settlement the hon. Gentleman is referring to occurred under Tony Blair’s Government, eight years later.

[Mr Sweeney]

I think I referred to the “spirit” of devolution. If the hon. Gentleman recalls his history, devolution, which of course the Tories implacably opposed throughout, was born in the 1980s. Likewise, the popular campaign for a Scottish Parliament was born out of the 1980s and the reaction against Thatcherism, the policies of which were anathema to the Scottish people. Devolution was born in the face of Thatcherism. If I am not mistaken, it was the former Secretary of State for Scotland, Sir Malcolm Rifkind, who referred to Thatcher as the midwife of the Scottish Parliament.

Clearly, Labour led the charge at every stage in the process. Although there is a great opportunity for the Scottish Parliament to be what it was designed to be—a bulwark against Tory austerity, not a conveyor belt for it—we have seen a weakness in the Social Security (Scotland) Bill, which was built on empty rhetoric, not substance. Again, it has been Labour pressure that has led the charge against the SNP pulling off an audacious power grab, without any scrutiny or accountability, in the Bill’s development in the Scottish Parliament.

Scotland has the powers to create its own social security system, to change the lives of disabled people, to tackle poverty, and to reinforce the safety net, but there is still so much missing from the Bill. The Bill at stage 3, as it goes through the Scottish Parliament, will be very different from the form it was issued in last June. That has been achieved through campaigners lobbying, and Labour holding its ground, seeking to deliver real change to improve the lives of the people of Scotland. I want to be clear about how it has progressed through the Scottish Parliament, for the avoidance of any doubt and any rewriting of history.

In June 2017, a briefing was circulated to all MSPs highlighting that the Bill contained no top-up to child benefit, no rules setting out how the Government should create new benefits in devolved areas, and no ban on the private sector, going back on the Scottish Government’s word from April 2017. There was also no hard commitment on uprating, going back on their word from June 2016, and no scrutiny through the legislative process. By the end of that summer, during stage 1 Labour had secured the following concessions in the Bill: scrutiny and parliamentary procedure, a right to independent advocacy, a right to payment cash as default, and a statutory duty to maximise incomes.

However, the Minister for Social Security in Scotland continued to block protections for recovering overpayments made by office errors, which is more onerous than the UK system. She also blocked inflationary uprating—that is to say, the Minister wanted to do less than the UK system—and redeterminations, as they wanted to replicate the UK system. She also blocked the banning of the private sector, and the setting of binding targets to encourage the uptake of £2 billion in unclaimed benefits. However, since January we have seen a U-turn on all those issues, by laying or supporting amendments and seeking Labour’s support, while antagonising the third sector and civic society in the process.

During stage 2 of the Bill, the SNP and the Tories voted down amendments to secure human rights in the Bill. For months, a key and fundamental part of SNP rhetoric focused on how the system would be built on dignity and respect, yet when put to a vote they teamed up with the Tories to vote that down. That rightly angered the third sector, and some of the Scottish Government’s key supporters, who have long called for the right to social security to be part of the legislation. The Scottish Council for Voluntary Organisations said in response to this issue:

“This ‘due regard’ amendment...was to ensure that the principles in the Bill, something we have heard a lot about from the Scottish Government, could be realised in practice.

Astoundingly, despite the Scottish Governments rhetoric around a social security system based on human rights, the amendment was not agreed and no such duty will exist in the Bill.

Confused? You should be.”

That is a shameful indictment of the Scottish Government’s true commitment on this issue.

[Stephen Kerr]

I thank the hon. Gentleman for giving way again. I congratulate him on his powerful speech, even though I do not agree with everything that he is saying. Does he agree that the evidence that he is presenting shows how difficult it is for the Scottish Government to get their arms around the issue of providing a social security system in Scotland? It is a complex issue, is it not?

[Mr Sweeney]

I agree that the complexity of the social security system should not be underestimated, but none the less we should have committed at the outset to the objectives and the vision that we wanted to see, which we share. Surely they should live up to their rhetoric on this issue.

[Patricia Gibson]

The hon. Gentleman says that the Labour party has been leading from the front on this issue. In the light of that statement, I ask him whether he regrets, and would like to apologise for, the fact that 184 members of his party abstained on the Welfare Reform and Work Bill in 2015, thereby letting through £12 billion of welfare cuts.

[Mr Sweeney]

I am afraid that is a total misrepresentation of what Labour was voting for in that case. If anything, the SNP should apologise for abstaining on the Third Reading of the Tory Finance Bill just last month, when we were all in Parliament. I cannot speak for colleagues who were not elected at the time she refers to, but I can accuse the hon. Lady of that act just last month.

On the progress of the Social Security (Scotland) Bill and how complex it has been, even at stage 2 in February, Labour continued to challenge the Scottish Government to deliver a number of further improvements, which have been resisted. For example, a child benefit top-up of £260 per year was blocked by the Tories and the SNP voting together. Changes that would prevent the winter fuel payment as well as disability and industrial injuries benefits from being means-tested were backed unanimously by Labour, the SNP, the Tories, and the Greens—a good concession. Binding targets to boost the take-up of all benefits were also backed, and protection for carers from inflation—the current carefully crafted Scottish Government plans look set to save £5 million—was backed unanimously.

However, a requirement in law to secure the automatic splitting of universal credit so that women are protected from financial abuse was blocked. The competency of that is contained in section 30 of the Scotland Act 2016. The Tories and the SNP blocked that by voting together—just days before, somewhat ironically, the hon. Member for Central Ayrshire (Dr Whitford) introduced a Bill in this place on the same issue. It is an example of how the SNP talks a good game at Westminster, yet acts very conservatively at Holyrood. An attempt to secure a higher legal threshold to prosecute claimants who fail to notify a change of circumstances was also blocked when the Tories forced a vote on it.

There is clearly much more scope to improve the quality of the social security system in Scotland. The only party that has driven real change and a real defence of working people in Scotland who rely on a social security system and a safety net has been the Labour party at every stage. We should not forget that the only force that will ensure that we have real, radical change for disabled people, that we tackle poverty, and that we reinforce the safety net will be a Labour Government at Holyrood in Edinburgh, and at Westminster in London.

[Several hon. Members rose—]

[Andrew Rosindell (in the Chair)]

Order. There will not be time for everyone to speak in the debate unless everyone keeps their remarks down to just over a minute. We have only eight minutes before we have to move on to the SNP spokesman. We will have to be very strict with that timing, because there is very little time left. I call Luke Graham.

17:00

[Luke Graham (Ochil and South Perthshire) (Con)]

I will try to keep my remarks as close to one minute as I possibly can. Welfare is one of the key elements of the modern British state. We launched the NHS together and we built the welfare state together. It started at the turn of the 20th century and was built throughout the last 100 years. Beveridge was the son of a Scottish civil servant and helped lay the infrastructure in which we operate today.

Welfare is also one of the biggest issues that I have experienced as an MP. Constituents regularly come to me with a whole range of welfare issues and my staff and I work incredibly hard to make sure that we resolve them. We have been able to successfully resolve 94% of the universal credit inquiries we have had in just a few days. The greatest concern when we get into the politics of the devolution of welfare powers is the impact on constituents. I have already had constituents coming to me in a state of confusion because they do not know whether to go to the local authority, the MSP or the MP, and that is just with the current system, before we create a whole other agency with a whole other bureaucracy and the costs that go with that.

The Smith commission put the powers in—

[Andrew Rosindell (in the Chair)]

Order. I apologise. I call Patricia Gibson.

17:00

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

I will try to be brief. I am bewildered about what this debate is supposed to achieve. The hon. Member for Ayr, Carrick and Cumnock (Bill Grant) agreed with many of the points we put to him—for example, that social security is a human right. I wonder what the Minister will think of that.

We will take no lessons from the Labour party. It does not matter what the hon. Member for Glasgow North East (Mr Sweeney) says, £12 billion-worth of cuts on welfare went through in 2015 and 184 Labour MPs abstained. That is why we need to have people in here protecting Scotland’s interests.

The hon. Member for Ayr, Carrick and Cumnock talked of the need for mitigation. By definition, if we need to mitigate Tory cuts in Scotland, that suggests that the Tory cuts should not be taking place.

In setting up the new welfare system in Scotland, there has been widespread consultation. For the hon. Gentleman to suggest that it is some dark secret and nobody knows what is happening is clearly nonsense. His colleague, Adam Tomkins MSP, talked about the welfare legislation in Scotland as being landmark legislation and the great consensus around it. It is a pity that the hon. Gentleman cannot agree with his Tory colleagues in the Scottish Parliament. Adam Tomkins MSP congratulated the Scottish Government on bringing the legislation forward in the form that they did. It is very clear that the only people who are standing up for the people who find themselves relying on benefits—

[Andrew Rosindell (in the Chair)]

Order. I call Stephen Kerr.

17:02

[Stephen Kerr (Stirling) (Con)]

Having made a number of interventions, I will take a few seconds simply to say that what concerns me most about the passage of the Social Security (Scotland) Bill, as outlined by the hon. Member for Glasgow North East (Mr Sweeney), is the disregard that the Scottish National party in Government in Scotland show to due parliamentary process. They are reluctant to expose their legislation in detail. They are reluctant to allow that legislation to be properly scrutinised. They make bad laws. They have a consistent record of making bad laws. They ram legislation through the Parliament. We have an example right now with the wrecking Bill that is going through Parliament with very little time for scrutiny. This is another typical example. The Social Security (Scotland) Bill as it was originally presented included enormous powers reserved to Ministers—called Henry VIII powers here. They are practitioners of reserving powers to Ministers for regulations of the highest order and that is why sometimes when they speak in this place, their actions in Government in Scotland should be set against what they say.

17:03

[Hugh Gaffney (Coatbridge, Chryston and Bellshill) (Lab)]

I am delighted to serve my community and to stand up for the most vulnerable in society. It has not always been easy in public life, but it is easy to stand up for what is right.

I am so sick of seeing the impact of the SNP and Tories on my constituents. On a national level, we have seen jobcentres closed. We have seen DWP offices closed. We have seen housing benefit for under-25s scrapped. We have seen support for local authorities across the United Kingdom slashed. We cannot forget that many of the decisions taken by the Tories in London and the SNP in Scotland have taken money out of the pockets of people in need. I am ready for real change.

That is why I am delighted that Richard Leonard has become the leader of the Scottish Labour party. Under Richard, we will see radical change for disabled people and plans to tackle poverty, and we will reinforce the safety net. This is not and should not be political. It is about a better future for the people of Scotland.

17:04

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

Like, I suspect, most hon. Members, I got involved in politics to make people’s lives better and to make our country a better place. A large part of the casework I have to deal with revolves around welfare and ensuring that people get what they are entitled to from the safety net that the state rightly provides. That is why I find it so annoying and so frustrating that the SNP chooses to make party politics of this. While they constantly condemn the choices that the UK Government make about welfare, when this Conservative Government gave the Scottish Parliament even more powers to take those decisions itself, the SNP Government have dithered and delayed and pushed the powers back for as long as they possibly could to avoid making the tough choices and taking responsibility for being in government, and would rather just stoke up the politics of grievance. The voters see through it. We see through it. It is about time the SNP stood up for the rhetoric that it is so keen to articulate and actually took responsibility for being in government.

17:05

[Chris Stephens (Glasgow South West) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Rosindell. So far we have been subjected to what one can only call buzzword bingo. I am only waiting on one from either the Labour or Conservative Benches.

The hon. Member for Ayr, Carrick and Cumnock (Bill Grant) complained, on the one hand, that not enough was being done and then, on the other hand, complained about what has already been announced. It is incredible behaviour. It can be summed up like this: the UN committee on the rights of persons with disabilities has criticised the UK Government for grave and systematic violations of the conventions on the rights of persons with disabilities and, at the same time, it has praised the Scottish Government for engaging with disabled people and the organisations that represent them.

If we are building a social security system—not a welfare system as the Conservatives talk about, as if it is some sort of handout—

[Stephen Kerr]

No. That is not—

[Chris Stephens]

It is not a handout; it is a human right. Language is important. The hon. Member for Stirling can shout all he likes—it is social security we should be talking about, not welfare. That is a big difference between my party and his in terms of how we view the issues. We need to ensure—

[Andrew Rosindell (in the Chair)]

Order. I call Drew Hendry.

17:06

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

The hon. Member for Ayr, Carrick and Cumnock (Bill Grant) has brought this debate to the Chamber and was largely complaining about two things: cost and time. I do not have much time and so I would refer the hon. Gentleman to some of the speeches I have made about the misery of universal credit in my constituency since 2013, which he is invited to come and see.

Let me just make a point on cost. The UK Government have already lost in court, being found to have unlawfully discriminated against disabled people—a move that could cost billions. So there is the cost. In terms of dates, the Scottish Government will introduce the first of the devolved benefits, carers allowance, in the summer. It will bring in the best start grant in summer 2019, funeral expenses assistance in summer 2019, and the young carers’ grant—a £300 payment for young people—in autumn 2019. Recipients will also benefit from free bus travel from 2021. The Benefits Expert Advisory Group will extend winter fuel payments to families with children on the higher rate of disability living allowance and not means-test them. That is the way to deliver with the very limited powers that have been at the disposal of the Scottish Government, in terms of the best value for money and the best value for people.

17:08

[Neil Gray (Airdrie and Shotts) (SNP)]

It is a pleasure to speak in this debate with you in the Chair, Mr Rosindell. I congratulate the hon. Member for Ayr, Carrick and Cumnock (Bill Grant) on securing the debate. As has already been evidenced, it has allowed us to highlight the rather stark differences in the approach to social security in Holyrood and here at Westminster.

I also feel a wee bit sorry for the hon. Gentleman as, when he secured the debate, he really must have thought it was going to be a chance to get another “SNP bad” story on the Scottish Government for failing to deliver on their promises. Of course, the Scottish Government are proceeding quite nicely as they build the new Scottish social security agency. He must have been choking on his kippers at breakfast this morning as he read the headlines about his Prime Minister selling out the Scottish fishing industry. Today is really not the day for Scottish Tories to talk about promises to the electorate, when the SNP Government are keeping theirs.

[Tommy Sheppard (Edinburgh East) (SNP)]

Last week, the Equality and Human Rights Commission published its report on the cumulative effects of the UK Government’s tax and benefit policies, which showed that the very poorest in our society—the bottom 10%—are the ones who have suffered the most, and the ones who have suffered the least are the richest 10%. In other words, it is a system that is in direct and converse relationship to what it should be. Does my hon. Friend agree that, given their legacy, Government Members have a bare-faced cheek to try to attack the Scottish Government?

[Neil Gray]

I absolutely concur.

The hon. Member for Ayr, Carrick and Cumnock suggested that the Scottish Government are not following due process in preparing for the new system, and that they are not ready for the new powers because there is a lack of detail in the plans. I politely suggest to him that both statements cannot be true. Indeed, both are false. He himself acknowledged many of the areas in which the Scottish Government have used their powers to act. The Bill to create the new Scottish agency passed Committee stage at Holyrood—it did so with remarkable consensus, given the topic of discussion—so the process has been followed in a timeous fashion.

The Scottish Government are in regular contact with the hon. Gentleman’s colleagues in the DWP about how the two systems relate to each other. I wonder whether the Minister has done the groundwork that the Scottish Government have. We have yet to see evidence that he has. On the process point, the hon. Gentleman is clearly wrong.

[Luke Graham]

Does the hon. Gentleman agree that benefits across this country should at least be of one high standard? We have to be careful that, in creating another agency, we do not end up duplicating services, creating more cost for our taxpayers and delivering a worse service for our constituents. In other words, there has to be an incremental benefit, not duplication, more cost and bureaucracy.

[Neil Gray]

I agree with the hon. Gentleman’s constructive intervention to a point. That is why the Scottish Government are taking time to consider setting up the agency and are doing what they can to liaise with the UK Government about how the systems will operate in tandem.

The hon. Member for Ayr, Carrick and Cumnock is also wrong on the detail point, which relates to our readiness. From the Bill’s progress in Committee alone, we know that private companies will not be involved in delivering assessments. A new benefit will be provided to overcome his Government’s removal of housing benefits from most 18 to 21-year-olds.

[John Lamont]

Will the hon. Gentleman give way?

[Neil Gray]

To paraphrase Mike Russell, I am afraid I have too few minutes and too much to contradict the Tories on. I am very sorry, but I do not have enough time. I have taken other interventions.

We will establish an independent scrutiny body—the Scottish commission on social security—and we have a legal duty to scrutinise proposals for regulations and have regard to human rights. The new agency will seek medical information at the outset of an application—applicants will not be required to collect it at appeal stage—so face-to-face assessments will be reduced. The legislative process required to deal with the successful transition of 11 benefits is still going on in Holyrood, so there may be more detail to come.

Those who contradict the hon. Member for Ayr, Carrick and Cumnock are not restricted to SNP Members. I am keen to quote a couple of his colleagues in the Scottish Parliament. On 19 December, the Tory spokes- person on social security, Adam Tomkins, described the Scottish Government’s Bill as “landmark legislation” and said that

“the general principles of the bill should be supported.”

His colleague, Michelle Ballantyne MSP, went even further on the same day, and said that our Bill

“has the potential to revolutionise social security in this country.”

It is interesting that the hon. Gentleman has chosen this topic for debate, given that his colleagues up the road are not quite so keen to denigrate the Scottish Government’s actions. That is one of the reasons why I asked whether he had written to the Scottish Government at any stage about any of his concerns. You will be shocked to learn that he has not, Mr Rosindell. Call me cynical, but I think motives other than just inquiring about the progress in this area might have been at play when he called this debate.

The Scottish Tories were supposed to be coming to Westminster to vote as a bloc to protect Scottish interests and advocate for Scotland. Instead, they have used Westminster as a platform to try to denigrate the Scottish Government to the point of farce. Perhaps if the Scottish Tories had spent less time trying to do the job of MSPs, which many of them left, and more time watching what their own Government are doing, they would not be in the fisheries mess they currently find themselves in.

That leads me to my main questions for the Minister. How are the UK Government’s plans for the new Scottish social security agency going? What work has the Minister commissioned to ensure there is no delay to the smooth progress, which is currently on track to be delivered by the Scottish Government? What work have the UK been doing to keep up with—

[Andrew Rosindell (in the Chair)]

Order. You are out of time, I’m afraid.

17:13

[Margaret Greenwood (Wirral West) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Rosindell. I welcome this debate, and I thank the hon. Member for Ayr, Carrick and Cumnock (Bill Grant) for securing it.

It is important that we debate the impact of the Westminster Government’s cuts to the social security system in Scotland and the whole of the UK. Although the Scottish Government’s response takes steps in the right direction, is not without problems. I pay tribute to my Labour colleagues in Scotland who have worked hard and continue to do so to ensure opportunities are not missed in the Social Security (Scotland) Bill, as my hon. Friend the Member for Glasgow North East (Mr Sweeney) said powerfully. They have used every opportunity available to them to improve the legislation, but we are concerned because, for all the Scottish Government’s warm words, progress has been slow.

I will not go through every aspect of the Bill, because many have been discussed today, or the powers available to the Scottish Government, but I want to raise some key issues that we need answers to. The previous Labour Government strengthened the social security net to lift 120,000 children and 110,000 pensioners in Scotland out of poverty, but ground has been lost since Labour left office. More than one in four children in Scotland now live in poverty.

The Westminster Government’s decision to limit the cap on uprating to 1% from 2013-14 to 2015-16, and the subsequent freeze on the majority of social security payments, have caused low-income households to suffer a significant deterioration in the adequacy of social security support. The freeze to payments and support is having a detrimental impact on millions of people on low incomes across the UK. Inflation has more than doubled in the past year. It hit 3.1% in November, and it is now at 2.7%. Meanwhile, food inflation is at 3.3%. The Child Poverty Action Group states that

“the failure to uprate benefits in line with inflation is the single biggest driver behind child poverty.”

Will the Minister explain why the Government refuse to listen to CPAG and many other expert charities and organisations, and why they will not end the freeze?

I want to see the uprating of social security support both in Scotland, via the powers given to the Scottish Government in the Social Security (Scotland) Bill, and in the rest of the UK. Unfortunately, the Government here have refused to do that, but the Scottish Government still have the opportunity to take action.

[Danielle Rowley (Midlothian) (Lab)]

Does my hon. Friend agree that the Conservative Government’s handling of welfare changes has been absolutely shambolic, and that the SNP Government in Holyrood have dragged their heels? At the centre of this are people, and the finger pointing on display here does nothing to reassure them.

[Margaret Greenwood]

My hon. Friend makes a really important point, but I am so short of time.

In Scotland, some 50,000 households with three or more children are in receipt of tax credits. From April 2017, families no longer received support through child tax credits or universal credit for any third or subsequent child born on or after that date. That also applies to new UC claims. On top of that, the abolition of the family element of the child tax credit for all families whose third child is born after the April 2017 deadline will affect thousands of families who will lose £545 a year. Yet in Scotland the SNP blocked Labour’s plan to introduce a child benefit top-up of £260 each year, which would have lifted 30,000 children out of poverty. After housing costs, 26% of children in Scotland were living in relative poverty in 2015-16—approximately 260,000 children. Does the Minister think that is acceptable? Why does he refuse to act?

On top of that, the switch to universal credit will cause up to 100,000 families in Scotland who are currently in receipt of housing or council tax benefit to lose an average of £1,196 a year in state support for childcare costs. Universal credit is clearly not fit for purpose, so why does the Minister refuse to pause the roll-out and fix the problems to make the system work?

Members have spoken about the flexible payment system, which is important—we have been calling for one for the rest of the UK—and the system of split payment. I would be grateful if the Minister explained to us whether there are any practical reasons why split payments cannot be the default position. There is a great deal of concern about the impact that the current system has on the safety of people living in situations of domestic violence.

Labour has long campaigned for the abolition of the bedroom tax right across the UK, so we welcome the Scottish Government’s action to mitigate its impact. Like the bedroom tax, the imminent changes to support for mortgage interest is another Conservative policy that will hit those on low incomes. Right now, 11,000 people in Scotland who rely on the current scheme have little more than a month to decide whether to take out a loan or pay for the shortfall. I am eager to hear what the Minister has to say about that devastating yet avoidable change. Will he delay the impending changes and review the impact of the options before him?

We welcome the Scottish Government’s agreement with Labour that the new social security agency in Scotland should have a duty to ensure take-up, but we should go further. Will the Minister commit to considering a duty for the rest of the UK? We need a social security system that is reliable, is there for us in our time of need, and provides support should any of us become sick or disabled, or fall on hard times. I am interested to hear how the Minister intends to address that in the light of the changes his party is pursuing.

17:08

[The Minister for Employment (Alok Sharma)]

It is an absolute pleasure to serve under your chairmanship, Mr Rosindell. I congratulate my hon. Friend the Member for Ayr, Carrick and Cumnock (Bill Grant) on securing this debate on a key issue for the citizens of Scotland.

We have had an incredibly spirited debate, in which a range of views have been expressed. Of course there have been disagreements, but that demonstrates, as my hon. Friends the Members for Ochil and South Perthshire (Luke Graham) and for Berwickshire, Roxburgh and Selkirk (John Lamont) noted, that ultimately we all care about our constituents and want to do the best by them. That is why we need to work together, across all parties, to ensure that we deliver for the people of Scotland.

[Margaret Greenwood]

Will the Minister give way?

[Alok Sharma]

No, I will not, if the hon. Lady does not mind. A lot of comments have been made, and I want to deal with them.

The devolution of welfare powers represents a considerable and positive change, but it will require strong collaboration and co-operation from all sides if it is to be a success. The hon. Member for Airdrie and Shotts (Neil Gray) asked about the UK’s commitment. I can tell him that we have set up and resourced dedicated teams to lead on Scottish devolutions; we have shared—and we continue to share—our learnings and experience with the Scottish Government; we have run more than 100 workshops and operational visits; and we have shared many hundreds of pieces of information. We are absolutely committed to working in partnership with the Scottish Government to ensure a safe and secure transfer of the welfare powers for which they now have responsibility.

Scotland is an integral part of the United Kingdom, and our economic and welfare reform policies recognise that. Unemployment in Scotland is at a near historic low, which we should all welcome, and more people see greater security in retirement. Following the decisive result of the 2014 independence referendum and the ensuing Smith commission, we are delivering on the promises we made to people in Scotland by devolving £2.8 billion in welfare powers.

[Neil Gray]

If we are working together and in partnership, will the Minister support the private Member’s Bill of my hon. Friend the Member for Central Ayrshire (Dr Whitford)? That would negate the need for the Scottish Government to have to negotiate with the Department for Work and Pensions and would pay for the DWP to deliver split payment services under universal credit.

[Alok Sharma]

If I may, I will come on to how we are co-operating with the Scottish Government. At the end of the day, there is of course also a requirement on the Scottish Government to play their part. Many of the powers are being devolved: that involves not only a right for the Scottish Government, but a requirement for them to deliver.

The Scotland Act 2016 was an historic moment that created a shared welfare space for the first time. Since September 2016, the Scottish Government have had power to deliver employment programmes for disabled people and those at risk of long-term unemployment, and to vary the housing cost elements of universal credit through the universal credit choices. They have also had the power to top up reserved benefits using their own resources and to create new benefits in areas of devolved responsibility.

We have seen progress in some of those areas, with the DWP providing considerable support to enable the Scottish Government to deliver their transitional employability programmes from April 2017. From April this year we will support the introduction of their successor employment programme, Fair Start Scotland, which relies on Jobcentre Plus work coaches playing a key role in the referral process.

Since 4 October last year, we have been delivering universal credit Scottish choices through the universal credit system. That has allowed those living in Scotland who make a new universal credit full service claim a choice on whether they are paid twice monthly, instead of monthly, and whether their housing element is paid directly to their landlord. Since January this year, regulations allow for those universal credit Scottish choices to be extended to those who were universal credit full service claimants before 4 October, as well as to those claimants transferring from live to full service, once their claim has been established.

We are yet, however, to see any proposals for how the Scottish Government intend to use their powers to top up benefits or to create new benefits in areas of devolved responsibility. The Scottish Government are proposing to pay a carer’s allowance supplement to carers living in Scotland from this autumn, but they have still not put forward proposals on the disability benefits such as personal independence payments, disability living allowance and attendance allowance for people in Scotland.

My hon. Friend the Member for Ayr, Carrick and Cumnock asked about joint working. As he may know, there is a joint ministerial working group on welfare, which is jointly chaired by the Secretary of State for Scotland and the Cabinet Secretary for Communities, Social Security and Equalities in the Scottish Government. It continues to oversee the transfer of the new employment and welfare responsibilities. The Secretary of State for Work and Pensions also attends the working group. My Department has worked hard to share our knowledge and experience and has invested significant resource to support the Scottish Government’s thinking and planning.

It is two years this week since the Scotland Act received Royal Assent, and I agree with my hon. Friend the Member for Ayr, Carrick and Cumnock that the public need clarity, as there is still much to do. Meaningful devolution in such areas cannot happen until the Scottish Government make their policy intentions clear and put in place the infrastructure to deliver them.

The hon. Member for Airdrie and Shotts asked specifically what we were doing with the Scottish Government. I can tell him that, obviously, we have been supporting them in a whole range of areas, as outlined, but we are keen to understand in greater depth the Scottish Government’s plans for post-wave 1—when I say that, I mean the disability benefits that I have already outlined.

The reality is that if the Scottish Government fail to deliver those welfare powers by 2020, the people of Scotland will need to be protected. Plans are in place to ensure that the DWP will be able to continue to administer and deliver the devolved benefits, as we do now, under an agency agreement for a defined time. We will ensure that we provide the greatest support and the greatest protection for the people of Scotland.

[Neil Gray]

Given that the parliamentary process is proceeding in a timeous fashion and to time, what evidence does the Minister have to suggest that the Scottish Government will not proceed to time unless the UK Government have not done the groundwork?

[Alok Sharma]

My intention is not to create any kind of ranking—we want to work with the Scottish Government. The point that my hon. Friend the Member for Ayr, Carrick and Cumnock made, rightly, is that he has concerns about the pace at which things are moving. I repeat: the faster the Scottish Government move forward, the faster and more easily we can work together to deliver, ultimately, for the people of Scotland. That is what are here to talk about—not the politicians, but the people of Scotland.

[Luke Graham]

It is good to hear about the support that the Minister is providing to the devolved Administration, but will he assure me and other Members that, although some devolution of powers will be helpful, he and his Department will work with them to ensure against duplication and our constituents receiving a lower standard of service? Creating a new welfare agency is another layer of bureaucracy and cost. Benefits are already confusing enough for our constituents. Will he make that guarantee? We are MPs in this place to influence Government directly for all the UK, not to devolve our responsibility away.

[Alok Sharma]

As I said, we are here to work together to deliver for the people of Scotland. I know a number of colleagues have castigated universal credit, but it is a welfare system that has simplified the whole infrastructure of welfare. Having gone to jobcentres around the country and talked directly to claimants, I can say that for them that has made a big positive difference.

I only have a couple of minutes left, so I will deal with a couple of points made during the debate. One was with regard to disabilities. There was an implication that we may be cutting disability benefits, but that is not the case. In fact, PIP and DLA are just one part of more than £50 billion that we will be spending this year alone to support disabled people and those with health conditions.

The hon. Member for Glasgow Central (Alison Thewliss) mentioned the Equality and Human Rights Commission. We do not accept the commission’s analysis, because it only represents a partial picture, does not consider the effect of spending on public services and makes unevidenced assumptions about income sharing in households. She made a specific point about women of Pakistani origin. We are committed to increasing opportunity for them, which is why, as part of the work we have done in the race disparity audit, we have identified 20 challenge areas in which to have pilots, to ensure that we can get people into work.

In conclusion, we look forward to the Scottish Government ultimately making progress with the ideas outlined. We, of course, stand ready to work with them to deliver for the people of Scotland. That is certainly the case that my hon. Friend the Member for Ayr, Carrick and Cumnock made in his opening speech, and I commend him for that.

[Bill Grant]

It is left to me simply to thank all Members and the Minister for coming along this afternoon—and indeed you, Mr Rosindell, for chairing the debate.

Question put and agreed to.

Resolved,

That this House has considered Scottish welfare powers.

17:31

Sitting adjourned.