EU Structural Funds: Least Developed Regions

Drew Hendry Excerpts

Wednesday 26th June 2019 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Ms McDonagh, and I congratulate the hon. Member for Sheffield Central (Paul Blomfield) on securing this debate on an issue that is close to my heart, given the effect of European funding on the highlands and islands over the years. He cited CPMR figures of €13 billion and £11 billion, and as he rightly said, those numbers have been backed up by the House of Commons Library, and may even be an underestimate of the funding available had we remained in the EU. Indeed, if the Government had decided to take a sensible approach, we would still be beneficiaries of that funding.

The hon. Gentleman spoke about the least developed regions, which get a bigger share of that money because they have greater need, and about the EU stepping in where Westminster had not. My constituency contains some big, iconic signals of that. Predating devolution, the Kessock bridge crosses from Inverness to Ross-shire, and it would not have been delivered without intervention from the EU. It has been transformational. Similarly, the University of the Highlands and Islands is now a physical entity, and it has helped hugely with some of the issues described by Members today. There is no town, village or community in the highlands and islands that does not show a wee EU sign to explain how it has benefited from that funding over the years. The hon. Gentleman went on to talk about a range of positive and social economic benefits of European funding, and we share that view.

The hon. Member for Sheffield South East (Mr Betts) asked a question that many of us have asked: why is there no consultation? What is holding up the Government? He raised the important point that we will no longer be a member of the European Investment Bank, and the deficit that that holds. The hon. Member for St Ives (Derek Thomas) said that people are looking not for a handout but for a hand up, and he listed the criteria. That is where the EU has stepped in in the past. He spoke about a protected allocation of funds, and said there is no reason to believe that that is not what is intended. Let us see the evidence for that; let us see the delivery. There is no detail and, as we have heard, not even a consultation.

The hon. Member for Redcar (Anna Turley) spoke about investment and innovation, business and work skills, youth employment in the Tees valley, and about how essential those things are given this UK Government, and the times of Tory austerity we have been living through. She said that people have no knowledge about what is coming, and with her customary niceness she said that plans are “very light on detail”—I would have used stronger terms, but she is absolutely right. The hon. Member for Truro and Falmouth (Sarah Newton) said that the way the Treasury looks at funding overlooks rural areas, and that she will be working hard to ensure her party honours that commitment. We need to hear the Minister say that the funding will be fully replaced, and whether it will be included in the spending review.

The hon. Member for Sheffield, Brightside and Hillsborough (Gill Furniss) talked about the three years of uncertainty that the communities and recipients of that spending have lived through, and she wondered where we will go next. Importantly, she mentioned the positive impact of the funding on disabled people, because often the best of it goes to those who are left behind in the thoughts of Westminster. She spoke about there being slogans from the Tory Government rather than investment, and today the Minister has an opportunity to put some meat on the bones and give the guarantees that everybody is asking for.

The hon. Lady also mentioned the importance of such funding in the shadow of universal credit, and as an MP for a constituency that has seen UC over six years, from pilot to full roll-out, I know that money from the EU is vital to address some of the deficits caused by that programme. Indeed, we share a rise in food bank reliance as a result. She said that funding should be targeted, focused and devolved, but we are still waiting for a consultation.

The hon. Member for Ellesmere Port and Neston (Justin Madders) talked about how regional equality has dropped, and there are now extra children living in poverty. He asked why in 2019—I agree with this—Westminster still holds all the power. He said that people are fed up to the back teeth with Westminster’s approach, and that we need bottom-up decision making. The hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) spoke about below-average spending from Westminster. He said that EU funds are fairer, and that there is a better recognition of the issues by the EU. He rightly spoke about the risks of a no-deal scenario.

In the short time that she took to make her speech, my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) spoke succinctly, and rightly, about the real living alarm over the lack of detail about what is coming. Who will be eligible? How will it work? What will it be worth? Will there be—this has been mooted but not explained in any detail—like-for-like funding? Will that guarantee be yes or no, regardless of a deal or the catastrophe of a no-deal hard Brexit? She pointed out, as have nearly all the contributors today, that the funding formula must respect the devolution settlement, and she said that neither she, her constituency, nor her country should be short-changed. We call on the Minister to give those guarantees.

I am grateful to the all-party group for post-Brexit funding for nations, regions and local areas for its reports. It backed up a lot of the comments made around this room. It had lots of submissions, including from the Welsh Government, the Convention of Scottish Local Authorities, EHRC, and many educational and voluntary bodies, which all said that budget funding should be

“no less in real terms than the EU and UK funding streams it replaces.”

It pointed out that shares for the devolved nations should not be reduced, and that as we have heard, it should be a devolved matter.

The hon. Member for South East Cornwall (Mrs Murray) rightly asked when we will see action, even just the consultation—that is a pro-Brexit Member asking for that guarantee. The hon. Member for Barnsley Central (Dan Jarvis) spoke about the failure of successive UK Governments to address regional disparity, and he mentioned the most centralised political system in the world here at Westminster. I think his four principles are absolutely right: the budget should be no less than it currently is, there should be no competitive bidding, it should be fully devolved, and it must be beyond spending reviews and political cycles.

We have had a promise from the Tory Government, but then delay after delay in getting any information. Evidence from the House of Commons Library shows that we are approaching nearly 300 parliamentary questions, without an answer on any detail of this funding.

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

The hon. Gentleman makes a point about European funding being replaced by UK funding. If funding does come from the UK rather than the EU in future, will he commit to all projects being branded as co-Scottish Government and UK Government?

[Drew Hendry]

It would be much easier to respond to that kind of comment if the UK Government had given any details about how this will go forward. While the hon. Gentleman worries about slogans and branding, I worry about getting the detail to explain what communities across our constituencies, including my own, will get from this programme in future. When will we know the detail about what will be spent, who will be eligible, and will it be fully devolved? Once the Minister has answered those questions, we can go back to talking about flags and slogans.

Communities and charities have waited years to find out what will be available post-Brexit. The devolution settlement must be respected. As we have said, since Brexit is distracting the UK Government from doing anything worthwhile at the moment, let us revoke article 50 and get on with doing things properly, which would clear things up right away. Brexit will cost Scottish communities millions, and this particular issue must not add to that burden.

Shared Prosperity Fund

Drew Hendry Excerpts

Tuesday 14th May 2019 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Sir David, and I congratulate the hon. Member for Barnsley Central (Dan Jarvis) on securing this important and timely debate. We have all been waiting far too long for details on this matter. The hon. Gentleman spoke about looking through the eyes of communities, and his challenges to the Minister were repeated by many others in the Chamber. We must respect the devolved Parliaments and ensure that badly needed regional aid is in place. The hon. Member for Coventry South (Mr Cunningham) intervened to speak about the dangers of listening to who shouts the loudest, and of pork barrel decision making.

The hon. Member for Barnsley Central mentioned data from the conference of peripheral maritime regions—I must declare an interest because, as a former leader of Highland Council, I am a former vice-president of that body—and the data were very detailed. He highlighted €895 million for Scotland in this spending round, including €180 million for the highlands and islands. For the Minister’s benefit, I remind hon. Members that both that country and that region voted in great numbers to remain in the European Union.

The hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) spoke about the funding being used to challenge depopulation, as well as other issues that have gone unaddressed by Westminster Governments for many years. Indeed, one symbol of European funding joins our two constituencies. After decades of no or little investment in the highlands and islands, the Kessock bridge that now spans our constituencies was made possible only by EU funding—something people in the highlands are very much aware of.

The hon. Member for Barnsley Central spoke about supporting the most vulnerable, and he mentioned the need for regeneration and business support, and the low-carbon agenda that comes with such funding. In response to an intervention, he recognised that people are becoming desperate for information, which is true—people are desperate to find out where such support will now come from. The devolved Administrations must be told what the money will be, how it will be used and how it will work. Currently, they do not have clarity about how much money there is, when it will be allocated and to whom, or how the system will work.

The hon. Gentleman spoke about the guiding principles of there being no less money than already exists, that the regions must not be worse off and that the system should be fully devolved. This funding must go beyond parliamentary cycles and spending reviews.

[Stephen Kerr (Stirling) (Con)]

Will the hon. Gentleman give way?

--- Later in debate ---

[Drew Hendry]

I will not as there is not much time and I have a lot to say.

The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) spoke about Westminster’s failings, and the feeling in his communities about Westminster’s trickledown economics. He mentioned the benefits of EU funding in education, jobs and innovation, and said that his area requires not a penny less than was promised. There should not be a power grab. That would not be acceptable to the people of Wales, or indeed of Scotland.

The hon. Member for East Renfrewshire (Paul Masterton) took great pains to try to support his Government—he even had to call for them to move on—and raised concerns about this being an England-only fund. For different reasons, I have the same concerns, because if we look back into history, we see what happened in the highlands and islands before we were members of the European Union.

The hon. Member for Ellesmere Port and Neston (Justin Madders) said that this must not be a Westminster handout on Westminster terms as that will not cut it, and I completely agree. The hon. Member for St Austell and Newquay (Steve Double), along with other Members from Cornwall, seemed to argue that European funds have somehow been negative for the area. I know they were talking about the details, but I think people will find that hard to understand.

The hon. Member for Leigh (Jo Platt) spoke about the imbalance of investment, and said that for too long Westminster had held the purse strings and the power. She is absolutely right, and that must be respected when the scheme is introduced. Although the hon. Member for Strangford (Jim Shannon) and I do not agree on everything, he said that this funding must be devolved and at the same level as before, and he listed the improvements that have been made in his constituency with EU funding.

The hon. Member for Ogmore (Chris Elmore) spoke about how funding matters in his community, and how important it is across Wales, including the fact that it is devolved. This scheme must not be used as an opportunity to rewrite the devolution settlement; devolution must be respected. The hon. Member for Aberavon (Stephen Kinnock) repeated the call for this not to be a power grab. It will not surprise you, Sir David, to hear that I agree with that sentiment.

Communities and charities have been waiting years to find out what funding will be available post Brexit, and we urgently need the details of this so-called prosperity fund. Since joining the EU in 1973, Scotland has benefited from European structural fund money to the tune of billions. Those funds have been used to support getting people into work and out of poverty, to improve their education and skills, and for investment in our infrastructure and communities. The European regional development fund promotes balanced development across the EU, and the European social fund invests in employment-related projects.

The Ministry of Housing, Communities and Local Government has repeatedly promised to publish full details on the consultation. On 15 November 2018, Wales Office Ministers told MPs that a full consultation would be published before the end of the year. We are six months on, and there is nothing to be seen. If Brexit is drawing the Government’s business and long-term planning to a halt, they should revoke article 50—not the concept of long-term planning.

I do not have much time and I want to make sure that the other Front-Bench speaker and the Minister have the opportunity to contribute, so I will wrap up with these words, although there is much more I could say on this subject. Where is the post-Brexit funding? Communities and charities want to know where it is and they need the details urgently. When is it to be revealed? Will it respect the devolution settlement and prove not to be just another power grab?

It is not good enough that this Government are tied in knots and uncertain of the future. If the UK Government’s long-term planning has ground to a halt, they must get past that and get the details to people and communities of how the money will be distributed. We already know that Brexit will cost Scottish communities millions, so they need details on funding urgently. Our people cannot be left behind by a Government who are too chaotic to get out the details of how they will support communities.

--- Later in debate ---

[Jake Berry]

As the hon. Gentleman knows and I was just about to say, the quantum of the UK shared prosperity fund will be determined as part of the comprehensive spending review. That is the appropriate time for the Government to make commitments of the sort he seeks. However, he and the hon. Member for Aberavon (Stephen Kinnock) are correct that the Government must come forward with their consultation—I am clear that this must happen—before the comprehensive spending review to enable areas to contribute to that consultation.

We have not been sitting on our hands, as people who have listened to the debate may think. We have already engaged with more than 500 stakeholders. We have had 25 official-level engagements across the country, including with our counterparts in the devolved Administrations. In addition, in my role as Minister for the northern powerhouse, I have engaged with mayors. I have talked to them specifically about how we can work together to provide evidence to the consultation that demonstrates that, as so many people have said, the impetus for investment of the UK shared prosperity fund should come from our regions rather than being directed out of Whitehall.

Having listened to contributions to the debate, I think everyone believes that it would be nice if that happened. The point is that by working with our metro Mayors, our local enterprise partnerships and authorities across England—that is certainly my role as English Minister for local growth—to create the evidence base, we can move beyond thinking that it would be nice to proving that it is how we will get the biggest return on investment. There is work ongoing in my Department, in advance of the consultation, to ensure that that hugely important argument is made, and won, when my dear chums in the Treasury are making decisions about how the money should be distributed following the consultation. I hope that answers some of the questions that Members asked. My response to the main question is that the consultation will start very shortly.

Let me move on to some of the specific points that were made. On public transport investment, Members may not have seen the most up-to-date figures, which are available on the Treasury website. They show that transport capital expenditure is higher per capita in the north of England than in London. People often talk about total capital expenditure across the north of England versus London. There are some parts of the north of England where very few people live, so it is much more realistic to talk about capital expenditure per capita, and it is higher per capita in the north of England.

Many colleagues talked about the weakness of Green Book calculations for making investment decisions, which I think is acknowledged across the House. That is why the Government came forward with a rebalancing formula in the industrial strategy. That formula looks at areas that are less developed, depending on how we define that, and at factoring future growth into Green Book calculations. Changes have been made recently to ensure that community benefit is also included in such calculations.

My hon. Friend the Member for Newton Abbot (Anne Marie Morris) commented on the ring-fencing of coastal money. By the end of the current spending period, the Government will have invested £200 million directly in coastal communities through our coastal communities fund, which is about driving prosperity on our coasts. The UK shared prosperity fund must not be viewed on its own as the only support the Government give to drive regional growth. We have contributed £53 million to part of the exciting growth deal in the highlands and islands, which has resulted in things such as the north coast 500 route, which I hope to visit this summer, prospering.

[Drew Hendry]

rose—

[Jake Berry]

I will let the hon. Gentleman advise me about the best place to stay.

[Drew Hendry]

I am grateful to the Minister for raising that money for the Inverness city region deal. Will he go a step further and match 50:50 the commitment of the Scottish Government, who put considerably more money into that deal than the UK Government did?

[Jake Berry]

We will have to look at how much new money the Scottish Government have committed. Since we have talked repeatedly about devolution, particularly from a Scottish viewpoint, I note that the Smith commission agreement, which was signed by all parties in Edinburgh, contains a commitment by the Scottish Government to look at further devolution to local councils in Scotland. Devolution does not stop in Edinburgh, but I understand that no progress has been made on that.

I could go on, and I would like to, but I want to give the hon. Member for Barnsley Central the customary time to conclude the debate. I hope that colleagues do not doubt the Government’s commitment not just to devolution, but to regional growth. The UK shared prosperity fund, which we will consult fully on shortly, will continue that commitment to driving productivity and growth everywhere.

Local Government Funding Settlement

Drew Hendry Excerpts

Thursday 13th December 2018 Commons Chamber

[James Brokenshire]

I recognise the challenges and issues over the business rates retention pilots. Not everyone has been successful in relation to the pilots for 2019-20. We are piloting on the basis of 75%. That is on the basis of the new system that is being introduced in 2020 so that we can properly understand how it will operate in practice. I will certainly highlight to my hon. Friend some of the other issues in relation to, for example, the rural services grant, and how that will be beneficial to her local community, but, obviously, we will look at the representations that are received through this provisional settlement.

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

I thank the Secretary of State for advance sight of his statement.

The Government’s austerity policies, as we have heard from the Labour Front-Bench spokesman this morning, have been deeply affecting councils in England for many years. I have been in this Chamber listening to debates about the struggles that they have had. Those austerity policies have also hit Scottish finances, but, in contrast, the Scottish National party Government continue to treat local authorities very fairly, despite the fact that the Government have cut the Scottish budget by £2 billion between 2010-11 and 2019-20. There are some warnings from Scotland on match funding and pilots, because this Government also continue to short change local authorities in Scotland directly in other ways by their failure to match the city deal funding from the Scottish Government by £387 million. It is especially critical at this time for Dundee, which faces the prospect of losing 850 Michelin jobs, as the Tay cities deal falls short because the Government have failed to match the Scottish Government’s spending by £50 million

Mitigating Tory costs for local authorities will cost the Scottish Government £435 million next year. On pilots, the extra administration costs of dealing with the hard-hearted and shambolic roll-out of universal credit has meant that Highland Council, a pilot area, has run up costs of more than £2.5 million, which is directly attributable to the costs of universal credit. The council leader and I have written numerous letters to the Secretary of State for Work and Pensions, and the matter has been raised with the Minister for Employment on numerous occasions. The questions are: when will the Secretary of State’s Government reimburse councils such as Highland Council and their tax payers and when will they live up to their responsibility for city deals and make good on their shortfalls?

[James Brokenshire]

I am grateful to the hon. Gentleman for his comments. I am pleased that he recognises the contribution that city deals have made in Scotland, the contribution that the UK Government are making in Scotland to ensure that that sense of growth and opportunity is felt very firmly, and how we contribute in that way to see that that is felt throughout our United Kingdom. I am sorry that, in some way, he does not fully appreciate and recognise the contribution that we are making. On the point that he makes more broadly in relation to universal credit, obviously, care and attention has been given to this matter by my colleagues, who I am sure will listen to the points that he makes. However, I say to him that the Scottish Government themselves have flexibility over welfare policy and over what they can do to deal with some of the issues and concerns that he has highlighted, and therefore that they have responsibility in that regard.

Protection for Homebuyers

Drew Hendry Excerpts

Thursday 13th December 2018 Westminster Hall

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

It is a pleasure to serve under your chairmanship this afternoon, Mr Sharma. I congratulate the hon. Member for Stretford and Urmston (Kate Green) on bringing not only a very important but a highly interesting debate to listen to, which has included various Members around the Chamber. It is very challenging to sum up the debate because there have been so many powerful points made by so many hon. Members, but I will do my best to pick out some of the key points as I saw them.

The hon. Member for Stretford and Urmston talked about the unhappy homebuyer experience and the impact that has on people when they have made a huge investment in their future. She also mentioned the number of problems that occur, particularly with new homes. Giving due praise to good home builders is important, because there are many. I am very fortunate: in the highlands, due to the scale—it is probably not the same scale as in other urban areas—the home builders are very good in general. They are not without problems—there are still issues, which I will talk about later. The hon. Lady was right to pick out those large developers who are getting away with some of the things she described.

The hon. Lady said that buying a home was one of the big, significant life changes, but that buyers were having to buy their houses more or less without having seen the final build. She also talked about the introduction of the new homes ombudsman. Like her, I would like to know more about what that will entail. It would be useful if the Minister covered some of those points, albeit she may want to do so briefly. The hon. Lady was right also to highlight the dangers of a voluntary approach when there is clearly such a widespread problem in house building.

The hon. Member for Poplar and Limehouse (Jim Fitzpatrick) mentioned issues for leaseholders as opposed to freeholders, and went on to address issues with ground rents and service charge hikes. I will talk later about property factoring charges. Those are important issues for people. Importantly, he also mentioned fire safety and sprinkler legislation, and pointed out the moves to tackle those issues in both Wales and Scotland.

The hon. Member for Ellesmere Port and Neston (Justin Madders) mentioned shocking additional charges that homebuyers uncover after purchase. That is clearly wrong. No one should be put in a position where they buy blind and suddenly find additional costs coming out of the woodwork—literally, in this case.

It is important to highlight the serious issue of solicitors’ conflict of interest, which a number of Members raised. It makes no real sense for the system to exist in that way. Clearly, there has to be segregation so people have confidence in the legal process when they buy a new home. The hon. Gentleman talked about people being pressured to use a solicitor from a panel due to purchase time pressures. Consumers should not be put under pressure when making a purchase of such magnitude in their lives. He challenged the Minister on those issues. He also raised the issue of paying maintenance charges twice, which I will come to, and suggested that the Minister might want to look at a retention scheme.

The hon. Member for Kingston upon Hull North (Diana Johnson) told us, shockingly, that she had waited five years for a meeting. That is disgraceful, and she rightly named and shamed Persimmon for doing that. She mentioned the issue of sinking gardens, which sounds horrendous, and one householder’s fear that her fence and land would slip into the drain, which the council could not take enforcement action on. Since Persimmon was mentioned a number of times, it is important to touch on the obscene bonuses paid to its chief executives. Surely, such grandiose remuneration is unacceptable.

Other hon. Members talked about completion and adoption, promises that are made about facilities and the scary arguments that come later with developers about costs. It is common for problems to occur a couple of years after the purchase price is paid and people move in, and for the developer either to be nowhere to be found or to argue. That is simply not good enough.

We do not know what consumer protection measures will be proposed—as was highlighted, they have yet to be published—but they are unlikely directly to affect Scotland because of the devolved nature of housing. However, that does not mean they will have no effect, so I am keen to see what comes from them. For a number of years, homeowners have had issues with property factors. The UK Government recently consulted on the issue as part of its implementation of reforms to the leasehold system, which is very different.

The Scottish Government brought forward the Property Factors (Scotland) Act 2011, which means that since 2012, registration has been compulsory for property factors operating in Scotland and they have had to follow a code of conduct outlining minimum standards. There is also a new dispute resolution system. The homeowner housing panel, and now the housing and property chamber of the first-tier tribunal for Scotland, have allowed homeowners to challenge property factors in Scotland.

[Jim Fitzpatrick]

Property factors being property management agents in Scottish speak, yes?

[Drew Hendry]

I am grateful for that translation from the Scots.

A test case was brought by Mr Michael Marriott, a householder in Clackmannanshire, against Greenbelt Group in 2015. He took his case to the Lands Tribunal for Scotland and won, because it was found that the deeds were not compliant with the legislation. Perhaps that is a learning opportunity for the UK Government. Where there is a clear breach, homeowners can pursue a course to get factoring clauses taken out of their deeds altogether.

That has made a big difference, but it would be foolish to say it has cured all the problems. There is much more work to be done in Scotland, including on issues with shared factor arrangements on private housing estates. There is one such estate in Milton of Leys in my constituency. One of my constituents was advised that his factoring bill had risen from £100 in 2005-06 to £173 in 2017-18, with no explanation—it was just applied to the costs.

[Kate Green]

The hon. Gentleman is making a really interesting point. I know from personal family experience that one of the difficulties with factors is that those homeowners are often older people who live in specialist or sheltered estates. Does he agree that it is particularly important that any regulation and legislation attends to the needs of more vulnerable homebuyers?

[Drew Hendry]

I am very grateful for that intervention. That is an important point. Lots of people are in a vulnerable situation. They tend to be elderly people and people with disabilities, but it is important to recognise that there are other vulnerable groups, such as the young and inexperienced, who may not be able to think about entering into a contract in the same way as other people. Some people have found it difficult to get recourse when work is not done to the standard they expect, and others have found that maintenance of communal landscaped areas is ignored completely.

As well as introducing measures to protect homeowners, the Scottish Government are working to ensure that those who aspire to home ownership are able to achieve it. I will mention a specific programme that the Minister may find it useful to hear about. Ensuring that everyone has a safe, warm and affordable home is central to the Scottish Government’s drive for a fairer and more prosperous Scotland. Since 2007, they have delivered more than 80,000 new homes—as a proportion of the population, that is a third more than in England and three quarters more than in Wales. More than 28,000 households have been supported through the Scottish Government’s low-cost initiative for first time buyers scheme and the Help to Buy programme. Nearly 20,000 houses have been built for affordable home ownership.

The Scottish Government have also introduced a new land and buildings transaction tax relief for first-time buyers, which will raise the zero-rate threshold for that group to £175,000, benefiting all first-time buyers in Scotland by up to £600. That reform means that more than 85% of those who have bought a property worth £40,000 or more since April 2015 have either paid less tax compared with stamp duty land tax, or no tax at all.

Affordable housing to buy is very important for my constituents and across Scotland. A recent survey found that increasing numbers of young people want to live and work in the highlands and islands. In 2015, when the survey was previously carried out, many young people cited poor connectivity and a lack of housing as barriers to wanting to stay.

Working together is delivering results. Mid-market rent projects are delivered through the city deal investment in a partnership between the Highland Council, the Scottish Government and house builders. Through partnerships with Highland Housing Alliance and others, young people who cannot yet afford a mortgage are given the opportunity to rent a home at a mid-market rate to allow them to save for a deposit and buy the property after a number of years.

I want to quote my constituents, Sally and Ruaridh, who have just moved into their new home this week through the Highland Housing Alliance mid-market rent initiative. They will be able to buy the property in five years, after paying a mid-market rent that allows them to save. Sally said:

“This move has been transformational for me and my partner. We are now in a secure home where we hope to start a family one day, and we’re able to save hundreds more each month to help us towards a deposit for a mortgage.”

The Raining’s Stairs development in my constituency in Inverness, which includes mid-market rent properties, won the award for the best residential development of under 70 homes at the Inside Housing development awards in London last month, so it is appropriate to mention it in this debate. Some 55% of Help To Buy recipients were aged 30 years or under. The Scottish Government recently announced a further £100 million to extend the scheme by two years to March 2021, to help even more people into home ownership.

The debate has been interesting. I wanted to touch on points specific to Scotland, but I will underline that some of the voices we have heard talking this afternoon about the costs incurred by constituents and homebuyers and about the activities of house builders have been eye-opening. I hope that the Minister has had her ears open and is willing to proactively address the many deep concerns that people have. I look forward to hearing her response.

Windrush

Drew Hendry Excerpts

Monday 30th April 2018 Commons Chamber

[Sajid Javid]

We have already confirmed that any out-of-pocket expenses, including travel costs, for any individual in relation to the work of the taskforce will be reimbursed. I am glad that my hon. Friend has highlighted the issue of speed. To reassure people who call the hotline and come to the taskforce, I make it clear that of the 100 cases I have mentioned that have already been resolved, most were resolved on the same day.

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

In just two of many cases, the already deported Zielsdorf family from Laggan and my current constituents the Felbers in Inverness were deported, or threatened with deportation, on the basis of highly technical conditions or abrupt rule changes, without notification, during attempted compliance. Will the Secretary of State look into the role that the Government’s hostile targeting has played in those families’ unfair treatment, which has caused great distress to our highland community?

[Sajid Javid]

The hon. Gentleman mentions a couple of cases with which I am not familiar. If he wants to send me details, I shall take a closer look.

Local Government Funding

Drew Hendry Excerpts

Wednesday 28th March 2018 Commons Chamber

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

I join the shadow Secretary of State and the Secretary of State in paying tribute to councillors across the nations of the UK for the work that they do. It is an undervalued job. Those who do it correctly often spend long hours serving their constituents diligently, and often at odd hours of the day and night. It is important for us all to reflect on that. As a former councillor and council leader, I am well aware of the pressures on individual councillors and on budgets.

The shadow Secretary of State quite rightly pointed the finger of blame for the problems of local government at the austerity that has been imposed on local government by this Tory Government. I absolutely agree with him. I was encouraged that he focused on that aspect when replying to the hon. Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney), because I also want to talk about the situation in Scotland.

The UK Government Budget did not present a good deal for Scotland, as a consequence of real-term cuts to Scotland’s revenue block grant for day-to-day spending of over £200 million next year. Despite a commitment of over £300 million of resource funding for the NHS in England this year, Scotland will receive only £8 million in consequentials in 2018-19 due to UK Government cuts elsewhere. Of the additional money that the UK Government announced as being added to Scotland’s budget, over half—£1.1 billion—comes from financial transactions that the Scottish Government cannot spend on frontline public services and that have to be repaid to the Treasury.

Austerity has not ended. Over the eight years of this UK Government—between 2010-11 and 2017-18—and onwards to 2019-20, we will see Scotland’s discretionary budget fall in real terms by £2.6 billion. That is 8.1%. Scotland continues to be hit by UK austerity and the decision to leave the EU. The Scottish Government have actually protected local government budgets and vital public services in the face of this austerity onslaught. Compare what the Scottish Government have done with the 49% real-terms cuts to English local authority budgets.

In Scotland, total resource funding for local government has increased by a total of £170 million in this year’s budget, providing local authorities with an above inflation increase, before taking into account the ability to increase the council tax. Some £35 million will be transferred to local authorities this year using agreed distribution mechanisms. The remaining £135 million will be in the Local Government Finance (Scotland) Order 2018. This figure includes a specific resource grant of £10.5 million agreed with Orkney, which will receive £5.5 million, and Shetland, which will receive £5 million, to address funding for inter-island ferries.

While the Tories in Scotland propose cutting over £556 million from public services to pay for their tax cuts for the wealthiest, the SNP Government deliver for councils and protect the vital local services in the areas that we all hold dear, especially in my own constituency in the highlands. The SNP’s progressive reforms on income tax—with 70% of people paying less than they did last year and 55% paying less than they would if they lived south of the border—are vital for allowing this funding increase, despite the continued austerity that is being imposed.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

My hon. Friend is making a very powerful point about taxation. Council tax on an average band A property in Scotland costs £1,208 per year, whereas a band A property in England costs £463 more, at £1,671. Is it not clear that England is the highest-taxed place in the UK?

[Drew Hendry]

My hon. Friend makes a good point. Indeed, the average cost of a band A property is some £400 more in England than in Scotland—5.1% up on last year.

The Scottish Government’s progressive budget also provides extra funding for our NHS, our education and—even though it is a reserved matter for this Parliament and Ministers here—the push to make sure that we have done more on broadband coverage in Scotland. There is more money for our economy, for research and for our environment, too, as well as for protecting important things like free university tuition, free personal care for the elderly, free school meals and free prescriptions—among many other items.

[Mr Sweeney]

rose—

[Drew Hendry]

I am happy to give way—I have been waiting for the hon. Gentleman’s intervention.

[Mr Sweeney]

The hon. Gentleman describes the SNP’s recent budget as “progressive”. The Convention of Scottish Local Authorities says that councils need £545 million just to stand still, yet the budget settlement imposed by the SNP was just £159 million. That yawning gap has not been filled. How can that possibly be progressive?

[Drew Hendry]

I am delighted that the hon. Gentleman has intervened, because I was expecting him to do so. I was a former group leader at COSLA, so I have been watching for a number of years the Scottish Government manage to put money into local authorities in a way that could not be done down here. In fact, in the last debate on local government that I took part in in this Chamber, Tory MPs were talking about their councils having to hand back the keys to Treasury Ministers such were the cuts. Actually, one of the biggest challenges in Scotland is dealing with the private finance initiative legacy left by Labour in terms of the additional interest costs on all these different items that continue to drain local authority resources.

I want to turn to Highland Council, because it is on my own patch and I speak from experience. Highland Council’s resource budget for our services such as schools, roads and housing rose to almost £450 million for the coming year—an increase of over 2% compared with last year. While the Scottish Government protect local authority budgets, the UK Government leave them paying the price for the austerity agenda.

Highland Council is a good example of the impact of universal credit on local authority budgets. As many Members will know, the constituency of Inverness was a pilot area. We went through the live service and then full service roll-out in June 2016. Local agencies, the council and I have been voicing concern about these issues since 2013, and the measures introduced do not even scratch the surface of the process failings of universal credit. Our local authorities are paying the price now, and right hon. and hon. Members in this Chamber who go through full service roll-out will see the effect on their own local authorities.

Let me reflect on the cost to Highland Council of the impact of rent arrears. Average rent arrears for somebody on universal credit are now £840. Average rent arrears for somebody not on universal credit are £250. The effect of that is that in July 2016 rent arrears were £1.6 million. In March 2017, that figure rose to £2.2 million, and then in December 2017, it rose to £2.7 million, racking up the costs for local authorities, which are having to implement and deal with the effects of universal credit. This will have an effect on services as it starts to drain their budgets.

The extra resources needed for administering the change to universal credit are running into hundreds of thousands of pounds—money that is coming out of the council budget. The welfare support team do amazing work, but they are flat out with demand. Housing officers are also flat out with demand, as more people face housing crises. Some 29% of landlords already say that they have evicted because of universal credit rent arrears. People are becoming homeless, so the local authority has a duty to house them. It is a vicious cycle of costs for the local authority. The increased demand then affects other agencies such as Citizens Advice.

The impact on poverty is also very harsh. One in four children in Scotland is growing up in poverty as a result of this Government’s austerity regime. As household incomes are pushed, people find themselves relying more and more on local authority services. Highland Council, especially its welfare support team, has done incredible work in the face of the most trying difficulties.

The SNP Government are committed to mitigating Tory austerity wherever they can. Since 2013, the Scottish Government have spent more than £100 million a year to protect people from the worst aspects of Tory welfare cuts. We are fully mitigating the bedroom tax in Scotland, and we have pledged to abolish the tax completely when we have the powers to do so.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

My hon. Friend is making the SNP’s fundamental point, which is that it would be far better for us as an independent country to be making the right decisions in the first place than having to spend £100 million to correct the Tories’ errors.

[Drew Hendry]

I am grateful to my hon. Friend for his intervention. As ever, he makes a telling point: choices would be different in Scotland. We would choose not to have to mitigate something as horrendous as the bedroom tax, which was so ill thought out that the Tories did not take into account the fact that there are virtually no houses in the highlands and islands that do not have more than one bedroom.

Since its establishment, the Scottish welfare fund has helped more than 275,700 households. The fund provides crisis grants when someone experiences a disaster or emergency and community care grants to enable independent living. We have also extended the Scottish welfare fund on an interim basis to mitigate the UK Government’s decision to remove housing benefit for 18 to 21-year-olds. In 2016-17, more than 17,500 applications for crisis grants were made because of delayed payment of benefits—that is around 10% of all applications. Between July and September 2017, that increased to 14%, clearly showing the impact of the Government’s harsh welfare cuts.

We have restored the council tax support cut in Westminster through the creation of council tax reductions, protecting the incomes of more than half a million people on low incomes. We have extended the child allowance in the council tax reduction scheme by 25%, benefiting 77,000 households by an average of £173 a year, or £15 a month. That boost for low-income families will help nearly 140,000 children across Scotland.

Following the UK Government’s decision to scrap the UK-wide scheme, we have safeguarded support for 2,600 disabled people through the Scottish independent living fund. We have now created an extra £5 million fund to support young disabled people to make the transition into adulthood.

To conclude, I urge the Minister to listen to hon. Members and to stop shifting the responsibility for his Government’s austerity agenda on to local authorities across the nations of the UK.

--- Later in debate ---

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

I am grateful for the opportunity to contribute to this debate on a critical issue for the future of the UK and, indeed, the integrity of many of our communities that have faced hardship in recent years.

I wish to pay particular attention to the issues that affect my constituency, which come under the Scottish Government’s purview. It was interesting to hear the Scottish National party Front-Bench spokesperson, the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), grandstanding and railing against the cuts that are coming to Scotland, and talking about how the SNP has been stretching every sinew to mitigate Tory cuts. Indeed, he referred to the block grant cut, yet why did SNP Members abstain on Third Reading of the Tory Finance Bill just a few weeks ago? They could have prevented that cut. It is clear that in reality they are not doing much to mitigate the cuts.

Local government in Scotland is now the most centralised system of government of any country in Europe. We have seen a continued strangulation of local government finances. The SNP has slashed £1.5 billion from local councils since 2011, merely acting as a conveyor belt for Tory austerity.

[Drew Hendry]

Does the hon. Gentleman agree with not only the Scottish Government but the Fraser of Allander Institute that Scotland’s discretionary budget has been cut by more than 5% over the past few years?

[Mr Sweeney]

The reality facing local government in Scotland is that the SNP has taken Tory austerity and more than doubled it, passing it on to local government. From 2013-14 to 2016-17, the local government revenue budget decreased at a much faster rate—minus 4.6%—than the Scottish Government’s revenue budget, which declined by only 1.5%. If we look at the local government finance order figures for 2016-17 to 2017-18, we see that the revenue budget for local government continues to fall, by 2.2%, while the Scottish Government revenue budget falls by only 0.6%. That is a conveyor belt and amplification of Tory cuts; it is certainly not mitigating Tory cuts in Scotland. That is very much clear from the SNP’s attitude.

The SNP budget was passed on 21 February, with the support of the Scottish Green party. The budget deal struck by the SNP and Greens does not stop Tory austerity, tackle poverty or redistribute wealth and power. For the second year running, Green Members of the Scottish Parliament have backed a nationalist budget, which will leave councils’ lifeline services further squeezed. It is a backroom stitch-up deal that fails to fund a proper pay rise for council staff or to deal with the child poverty that our councils face. As I have mentioned before, the Convention of Scottish Local Authorities said that it needed £545 million just to stand still, but the latest budget deal delivers only £159 million. I do not see much mitigation of local government cuts in that settlement.

Faced with a different path from that of the Tories’ austerity, the SNP has ignored it and rejected the progressive, radical package brought forward by the Labour party in Scotland. Audit Scotland has confirmed that in November last year accounts revealed that there is increasing strain on local government finances throughout Scotland. In 2016-17, a total of 19 out of the 32 councils in Scotland used cash from their revenue reserves—up from just eight that did it in 2015-16. This dipping into reserves is really going through the fat and into the bone. It is totally unacceptable. Indeed, over the course of the year, the overall amount held in council rainy day funds, or reserves, fell by £32 million. The Accounts Commission said:

“Councils are showing signs of increasing financial stress. They are finding it increasingly difficult to identify and deliver savings and more have drawn on reserves than in previous years to fund change programmes and routine service delivery.”

That is extremely worrying.

Labour’s alternative plan for the Scottish budget would deliver a nearly £l billion stimulus for the Scottish economy, by saving lifeline local services; increasing child benefit by £5 a week to put money back into the pockets of working-class families; and delivering an extra £100 million for our NHS. We also have a more radical tax policy than the one the SNP has proposed, despite the Scottish Government’s having unprecedented tax powers. The top 1% in Scotland own more wealth than the bottom 50% put together, but the SNP’s proposals on income tax just tinker around the edges, putting a penny on the top rate. Labour’s radical alternative would match the SNP’s starter rate, but would drop the threshold for the 45p rate to those earning more than £60,000 and introduce a new 50p rate for those earning more than £100,000.

Prospects would improve massively under Labour’s proposals. The SNP says that it cannot mitigate, but we have seen no effort to remove the public sector pay cap for local government. Public sector workers have faced years of cuts to their wages thanks to the pay cap. The current SNP proposals do not fully fund a pay rise and do not include all public sector workers—including those in local government. Labour’s proposals would. It is a radical package of proposals from the Labour party in Scotland. In addition to our tax plans, the further investment could be used to deliver more radical decisions on income tax and new economic powers to local authorities, including the ability to levy a tourist tax and a land value tax on vacant and economically inactive land. The latter is critical to my constituents, where 10% of land is vacant and derelict. Those are radical proposals from a radical Scottish Labour Government-in-waiting.