Budget Resolutions and Economic Situation

Jack Dromey Excerpts

Thursday 21st March 2013 Commons Chamber

[Vince Cable]

I accept the hon. Gentleman’s congratulations. Life sciences are a key area. It is a difficult sector, because the business model of pharmaceutical companies is changing—they are taking much of their R and D to spin-off companies rather than having it at their headquarters. That has been painful, but my colleague the Chancellor of the Exchequer intervened to help to make the process in his constituency less painful than it otherwise would have been. However, the decision of that large company to have its headquarters and R and D centre in the UK in East Anglia is a vote of confidence in Britain.

I want to make one more point on the industrial strategy. Apart from supporting successful sectors, we must reinforce those elements of the economy that drive long-term growth—meaning, basically, innovation and skills. That is why I and the Under-Secretary of State for Skills who is responsible for apprenticeships are driving enormous growth in apprenticeships, particularly in key areas such as advanced manufacturing skills. It is also why we must invest significantly in innovation. We have therefore established the chain of catapults, and we have the excellent proposal that my colleague the Chancellor made yesterday for the small business research initiative for small business innovation.

[Jack Dromey (Birmingham, Erdington) (Lab)]

The Secretary of State is right that it was a mistake to cut investment in affordable house building. The £4 billion cut in 2010 brought about a collapse in affordable house building. Housing starts were down 11% last year, 70,000 more construction workers are on the dole, and there has been an 8% contraction in construction. If capital investment is key to getting house building and the economy moving, why did the Government not accept the proposal of my right hon. Friend the shadow Chancellor of the Exchequer for investment to build 100,000 affordable homes, which would have added 1% to GDP, put 100,000 construction workers back to work, and got the economy moving?

[Vince Cable]

Why did the Labour party not do that when it was in government? Why was its first proposal for stabilising the budget to cut capital spending, including on affordable housing? If the hon. Gentleman had read the Budget, he would have discovered that, in addition to the housing policies that will affect private mortgages, it included a significant increase in support for affordable housing in the social sector.

The second long-term change relates to money and banking. One of the big features of the post-crisis economies has been the way in which Governments have had to pursue fiscal consolidation—because of the inheritance they received, and ours was worse than most—alongside supportive monetary policy. I made my maiden speech in 1997 in support of the then Chancellor when he made the Bank of England operationally independent. That was an important and good reform. But we have realised over the years that the world has changed. Inflation took no account of the massive asset bubbles that grew up, and the regime was not prepared for the collapse of the financial system and the difficulties we have had rectifying it. That is why it is right that, following on from the very successful, improvised monetary policies that we have experienced, the Chancellor is now consulting on a changed regime, which will be more flexible and take account of the level of unemployment, the level of nominal GDP and other variables that are crucial to long-term growth.

Economic Policy

Jack Dromey Excerpts

Monday 25th February 2013 Commons Chamber

[Mr Osborne]

I am not sure that that was worth waiting for. Let me say to the hon. Gentleman that he either thinks it is important for us to confront our debt problem—in which case he should support me as we make the difficult decisions that will enable us to do that—or he thinks that that is not important, and that we can take a difficult situation and make it very much worse. No amount of handwritten notes will help him in those circumstances. The main handwritten note from the Labour party that I remember is the one that said there was no money left.

[Jack Dromey (Birmingham, Erdington) (Lab)]

In the name of protecting our triple A rating, the Chancellor cut £4 billion of affordable housing investment, causing house building to collapse, pushing housing benefit bills up, and creating the biggest housing crisis in a generation. Rather than continuing to borrow to pay the costs of failure, will he now endorse the shadow Chancellor’s call for investment in affordable house building to create jobs and apprenticeships and to get the economy moving, which he has so signally failed to do?

[Mr Osborne]

That is a call for yet more borrowing. At least the hon. Gentleman is happy to advocate that in the House of Commons, whereas the shadow Chancellor dare not talk about his economic policy.

The capital spending in the plans that we inherited from the last Labour Cabinet—which, presumably, were agreed to by all members of that Cabinet—was lower than the capital spending in the plans that we have now. Why? Because we have made difficult decisions on welfare bills and other areas of resource spending in order to invest in capital. As for housing, with schemes such as Firstbuy and NewBuy and the new housing guarantees, we are getting behind the housing industry. [Interruption.] The hon. Gentleman says “Going down”, but the rate of housing starts under the last Labour Government was the lowest since the 1920s. That is the situation with which they left us.

Infrastructure

Jack Dromey Excerpts

Tuesday 12th February 2013 Commons Chamber

[Rachel Reeves]

It is being kicked into the long grass because of weak leadership. It is desperately disappointing for businesses wanting to invest today that no decision will be made and no report published from the man charged with conducting the review until the next Parliament.

The Chancellor should take the IMF’s advice and use the March Budget to rethink the Government’s failed economic plan. We told the Government that to cut too far and too fast would hurt the economic recovery and that the country needed leadership, not warm words. That is why since the Government choked off the economic recovery we have been calling for a boost to jobs and growth by bringing forward infrastructure investment, as the last Labour Government did in the aftermath of the financial crisis.

[Jack Dromey (Birmingham, Erdington) (Lab)]

With the Government presiding over the biggest housing crisis in a generation, was it not a mistake to cut £4 billion in affordable housing investment, leading to a 68% collapse in affordable house building, and to reject out of hand the proposal for the 4G licence money to be used to build 100,000 affordable homes, which would have added 1% to GDP and created hundreds of thousands of jobs and which was hailed by the CBI as just what the economy needed?

[Rachel Reeves]

That is why we urged the Government, before the autumn statement, to use the money from the 4G auction to start building 100,000 new affordable homes and why we urged the Chancellor to use a tax on bank bonuses for a programme for jobs and growth, with further house building and a job guarantee for young people. But the Chancellor did not listen—[Interruption.] Clearly, the Liberal Democrats do not want to listen either. With every project delay, every investor put off and every job lost in the construction sector, we lose ground to our global competitors. With the economy flatlining and no growth over the past year, the case for action is irrefutable. We need to bring forward public investment, create hundreds of thousands of jobs, kick-start the flatlining economy and get the construction industry moving again.

Autumn Statement

Jack Dromey Excerpts

Wednesday 5th December 2012 Commons Chamber

[Mr Osborne]

There will be more money for the regional growth fund. That has been helpful in securing and creating up to half a million new jobs. I am glad to say that I am sure businesses across Yorkshire will benefit from that. We are also, of course, investing in enterprise zones and LEPs across Yorkshire, and Yorkshire businesses will benefit from the enhanced capital allowance and the increase in the annual investment allowance.

[Jack Dromey (Birmingham, Erdington) (Lab)]

Seven Government Get Britain Building launches have proved to be false dawns. Housing starts are down; homelessness is up; we have a mortgage market where people cannot get mortgages and rents are at a record high in the private rented sector. Does the Chancellor now accept that his decision to cut £4 billion-worth of investment was directly responsible for a 60% collapse in affordable house building? Will he now accept personal responsibility as the Chancellor of the Exchequer presiding over the biggest housing crisis in a generation?

[Mr Osborne]

House building was at an all-time low under the Labour Government—the lowest, I think, since the 1920s or 1930s. That is what had happened. Of course, things such as problems in the mortgage market were created by the banking crisis and the financial crisis. The banking crisis happened, by the way, when the right hon. Member for Morley and Outwood (Ed Balls) was the City Minister. The funding for lending scheme is bringing mortgage costs down. The Firstbuy scheme helps with shared equity, and the new buy scheme is helping people who cannot afford their first deposit, so we have those schemes out there, helping to repair problems in the financial markets. We are also committing money for additional affordable homes and we are providing guarantees to social landlords to build not just social homes, but homes for the private rented sector. We are dealing with the problems that occurred when the hon. Gentleman’s party was in office.

Homelessness

Jack Dromey Excerpts

Tuesday 12th June 2012 Westminster Hall

[Jack Dromey (Birmingham, Erdington) (Lab)]

It is a privilege to serve under your chairmanship, Mr Havard.

I pay tribute to my hon. Friend the Member for Westminster North (Ms Buck), who has been a remarkable and outstanding champion of homeless people for many years. In a most dramatic and vivid way, she has brought home the sheer scale of human misery felt by hundreds of thousands of those we represent. The voice of homeless people has been heard in Parliament today.

Like my hon. Friend, I see the ever-lengthening queues of the desperate in my constituency: families trying to get a decent home at a price that they can afford who are being evicted; and those whose lives have come apart, who have spiralled down and ended up homeless on the streets. They are good men and women who deserve better in 21st-century England.

Homelessness and rough sleeping in 21st-century Britain, the seventh-richest nation on earth, are a disgrace and a scar on our society. Those were the sentiments of the Prime Minister when he was in opposition in 2009. Indeed, in August 2011, the Housing Minister said:

“Tackling homelessness and rough sleeping is what first got me into politics”.

No one doubts the Minister’s desire to bring an end to homelessness and rough sleeping. In opposition, he set up the Conservative homelessness foundation. In government, he has set up a cross-Government working group on homelessness and introduced a “no second night out” policy. However, with sadness I have to say that as we have seen all too often with the Minister and the Government, the rhetoric and the reality are very different indeed.

On the Minister’s watch, the consequences of the Government’s economic, housing and benefits policies have been devastating. We now have the biggest housing crisis in a generation, and, at its heart, the depressing statistics of homelessness up by 14% and rough sleeping up by 23%. The truth is that homelessness is rising precisely because their economic and housing policies are failing.

I have some questions for the Housing Minister. Does he accept that the Government were warned that the 60% cut in investment in the 2010 comprehensive spending review would have catastrophic consequences and that they have led, as today’s figures from the Homes and Communities Agency have demonstrated, to a 68% collapse in the building of affordable houses? Does he accept that the Government were warned that the toxic combination of increasing rents in the private sector, collapsing affordable house building and ill-thought-through changes to the benefits system would mean thousands of families being uprooted, particularly in London? The private secretary to the Secretary of State for Communities and Local Government wrote last year that the cap and other housing benefit reforms could result in 40,000 people being made homeless and that the policy could cost more than it saved. Does the Minister accept that the Government were warned about the consequences of the biggest cuts to local government expenditure in history and the cuts to Supporting People?

As we have heard my hon. Friend the Member for Rochdale (Simon Danczuk) and the hon. Member for Upper Bann (David Simpson) say eloquently, the consequences have been serious. The city of Birmingham, which I am proud to represent, has had the biggest cuts in local government history in the past two years: £312 million, including £15 million in cuts to the big society through cuts to the charitable and voluntary sectors.

In Birmingham, and throughout Britain, there have been cutbacks in services to homeless people. Again, the statistics are depressing; 58% of projects have received reduced funding, leading to a reduction of one in 10 staff— 1,400 people—caring for the homeless. The number of clients using day centres for the homeless has risen by nearly a third and there are 22% fewer empty beds on an average night. The research report, “SNAP 2012”, produced by Homeless Link, shows that there are 1,544 fewer bed spaces in 2012, compared to the previous year.

As a result of the Government’s actions—their failed economic policies—there is higher unemployment and the greatest squeeze on living standards in a generation, with families and individuals struggling to stay in their homes, whether owned or rented. Increasing numbers of people are presenting as homeless or are out on the street, not to mention the cuts to services that provide the safety net. There has been a catastrophic fall in construction, which is at the heart of the double-dip recession made in Downing street.

The Government’s failed housing policies are contributing to the growing housing crisis and the collapse in affordable house building. The private rented sector is defined by ever-increasing rents and, all too often, poor standards, with one in two homes in the sector not meeting the decent homes standard. Social housing providers are increasingly unsupported and their tenants shamefully demonised by Government.

My hon. Friend the Member for Westminster North used powerful case studies to demonstrate eloquently that the combination of the Government’s failing housing and economic policies and their benefit changes is leading, as the Housing Minister was warned, to misery on a grand scale. Tenants are forced out of their private rented homes because of the housing benefit changes and councils cannot find anywhere to put them. Many landlords are increasingly leaving the housing benefit tenant market. Councils are told by the Government that tenants should not be sent elsewhere in the country, but councils cannot keep them locally, so tenants end up in hotels paid for by the taxpayer, costing the taxpayer more and leading to more misery for the tenants. That is the economics of the madhouse.

We Labour Members learnt in government that homelessness can only be tackled by addressing all the factors contributing to it. Above all, more homes are needed. In government, Labour delivered 2 million new homes—500,000 affordable homes—and introduced Supporting People, bringing together seven income streams from across central Government to give the necessary housing and related support, particularly for vulnerable people.

My hon. Friend the Member for Rochdale is right to say that as a consequence of Labour’s determination to tackle the scandal of homelessness and bad housing, there was, progressively, a 70% reduction in homelessness. That reduction has gone dramatically into reverse under this Government.

[Kate Green (Stretford and Urmston) (Lab)]

Does my hon. Friend agree that there is an incomprehensible lack of logic in the Government’s now telling local authorities that they cannot transfer people to other local authorities, when that is the inevitable conclusion of the Government’s policies? Indeed, Ministers highlighted that conclusion in respect of the welfare reform and housing benefit changes of the past two years.

[Jack Dromey]

My hon. Friend is right. I have seen at first hand some utterly tragic cases resulting from those policies. For example, a young woman, who understandably chose to remain anonymous, appeared on the “Today” programme. She lived in Waltham Forest, was married to a professional man and they had a nine-year-old. The couple broke up and stayed close, but sadly he died. She then lost her home and ended up in temporary accommodation and was told that because there was no available alternative accommodation that the council could provide for her, she would have to go from Waltham Forest to Walsall. She said, “I can’t do it. My nine-year-old is distraught because of her dad’s death. She hasn’t gone to school for the last three months, with the agreement of the school, as she recovers. I go every day to my mum, who looks after her granddaughter while I train to get back into the world of work.” I do not mind admitting that after she told me that story, with its consequences and the pain that she felt, I was in tears. It is about time that Ministers faced up to the consequences experienced by the victims of their policies.

It appears that there is consensus in this Government that housing does not matter and should not be centre stage. Labour believes strongly—we know—that it does matter. Does the Housing Minister accept how important housing is to the economy? Construction accounts for 3% of gross domestic product, £91 billion of economic output and 1.5 million jobs. Does the Minister accept that it matters to health? The annual costs to the national health service of poor housing and homelessness have been assessed at £2.5 billion. Another depressing statistic shows that, on average, the homeless on the streets die 30 years younger.

Does the Minister accept that homelessness matters with regard to educational attainment? Again, the depressing evidence shows the impact on a generation of young people brought up in poor housing or temporary accommodation.

[The Minister for Housing and Local Government (Grant Shapps)]

Will the hon. Gentleman remind hon. Members how many debates on housing the Opposition have called?

[Jack Dromey]

My predecessor and I have stood up for all that is decent in terms of putting housing centre stage, and fought hard on behalf of the homeless, the badly housed and the millions who need a decent home at a price that they can afford, whether to buy or to rent. The Housing Minister should not make flippant comments but, instead, take his responsibilities seriously, as Labour is doing.

[Grant Shapps]

That is none then—not a single debate.

[John Robertson (in the Chair)]

Order.

[Jack Dromey]

We have—as the Government have not—put housing at the heart of our economic recovery plan to kick-start the economy and get it moving.

[Ms Buck]

We might reflect on the fact that, in a full-day Opposition debate, we discussed the impact of the housing benefit cuts on housing, in the context of the collapse in housing supply. We warned of the interaction of the policies bringing about exactly the conditions that we have been debating today.

[Jack Dromey]

My hon. Friend is right, and I would compare our record with that of this Government at any time, including on what kind of action should be taken now. When there was global collapse in 2008, did we stand back? No, we did not. We acted on the one hand to keep people in their homes, avoiding the tide of repossessions to which my hon. Friend referred earlier, and on the other hand by way of the kick-start programme, which saw 110,000 homes built and 70,000 jobs and 3,000 apprenticeships created. To this day, the benefits of that programme are feeding through.

What do we see now? We see the reverse. We see a Government who have done scarcely anything, as a consequence of which we see today the depressing statistic that there has been a 68% fall in affordable house building. That is why we want the Minister to listen to our case for a repeat of the bank bonus tax, enabling us to start with 25,000 badly needed affordable homes, the creation of jobs for 100,000 young people and a cut in VAT on home improvements, which will both upgrade housing stock and create jobs in the economy. If we were in government, our argument is that we would do what this Government are refusing to do, which is to act: to raise standards in the rapidly growing private rented sector, protecting tenants and good landlords alike, to create a more stable, secure and affordable sector and to encourage investment in major new build in that sector. The Housing Minister has gone in exactly the opposite direction; for example, repealing crucial protections that Labour put in place when in government, dismissing them as red tape. Much needed protection for tenants, many of whom are suffering in the private rented sector, is not red tape.

In conclusion, what strikes me as the most shocking thing about homelessness is not that it exists in a rich nation such as ours but that we know how to solve it. Therefore, I hope that the Minister has not completely forgotten what brought him into politics and that, instead, he listens to the voice of those concerned, such as the verdict on homelessness in the second edition of the powerful “Housing Report” produced by the National Housing Federation, Shelter and the Chartered Institute of Housing, whose annual conference he and I will be addressing later this week. I hope that the Minister hears the report’s assessment:

“The large increase in homeless acceptances and rough sleepers is deeply troubling. Ministers need to respond urgently to this growing problem, which could be exacerbated by further cuts to Housing Benefit in 2013.”

It is true that there was once a noble tradition in the Conservative party that took housing obligations seriously. It was the tradition of Harold Macmillan. Sadly, that tradition now appears to be all but extinct in the modern Conservative party.

[The Minister for Housing and Local Government (Grant Shapps)]

It is a pleasure to serve under your chairmanship, Mr Robertson. I offer my congratulations to the hon. Member for Westminster North (Ms Buck) on securing the debate, as well as my thanks to her for understanding my predicament this morning, trapped as I was when trying to reach the House, our inclement summer weather not letting me make the journey.

The housing debate is incredibly important, and homelessness even more so. I pay huge tribute to the hon. Lady for her long-term commitment to this subject, going back many years. Housing does not always get the attention that it rightly deserves, whether from Government or Opposition—I will say more about that in a moment—but not so with the hon. Lady, who is a passionate advocate on housing and in particular on homelessness, on which I have heard her speak often over many years.

We need to set the context. Far from being a recession “made in Downing street”, as the rather glib soundbite from the hon. Member for Birmingham, Erdington (Jack Dromey) suggests, sensible people looking at today’s circumstances appreciate that we need only to look across the water to see what is happening in Europe—the bail-out in Spain and events in France, Greece and so many other places—to understand that the problem is global and not one experienced only in the UK. In fact, the problem has a source, a reason, a cause, which was spending money that we did not have today and expecting our children to pay it back in the future. That was unsustainable; it could not be maintained forever. Only a fool imagines that we can spend money that we do not have forever. We had to do something about it, which means reducing the deficit in every area of the economy. Yes, that includes reducing the capital available to build homes—there is no point pretending that that has not been affected. Our great challenge has been to reduce the deficit while finding ways to increase the amount of house building, which, as we would not know from the contributions of the Opposition Members, fell to its lowest level since the 1920s under the previous Administration’s plans, resulting in a huge housing crisis.

We must look at the overall housing picture to understand the situation in a bit more detail. We have such enormous pressure on housing in this country because house prices were able to double in only 10 years, which is precisely what happened between 1997 and 2007. Lo and behold, what a great surprise, we end up with a large proportion of our fellow citizens finding it almost impossible to buy a house. As a result, rents and the number of people trapped in their housing position grow and grow exponentially. That did not happen overnight but over a decade and more. A lack of house building is at the very heart and is the very root of the problems of homelessness.

[Jack Dromey]

I am aware that the Minister struggles with his statistics, but perhaps he can take the opportunity today to confirm his Department’s own statistics. Under a Labour Government, there were 2 million new homes, 1 million more mortgage holders, 0.5 million affordable homes and, as a consequence of the kick-start programme in precisely the same kind of difficult economic circumstances as we now face, 110,000 new homes, 70,000 jobs and 3,000 apprenticeships. That is a record to be proud of. Can the Minister confirm those statistics?

[Grant Shapps]

The problem with statistics, as the hon. Gentleman should know, is that they can be played any which way we choose. For example, six months ago, when the Home and Communities Agency produced the house building figures for the previous six months, the hon. Gentleman made great play of a 97% reduction in the amount of affordable housing starts, although it was a natural consequence of the switch from the old programme to the new affordable rent programme. In the light of analysis of the figures six months on, he has failed to come to the House to explain that there has been 3,500% increase in starts based on his measure. I agree that we are not building sufficient homes in this country, but I am not happy with him ducking and weaving and using one set of figures six months ago and a different set of figures today in order to make a point.

[Jack Dromey]

Will the Minister give way?

[Grant Shapps]

I would like to make progress on the essence of this debate, because I have a feeling that we will never agree on the housing stats, although it is undeniable that house building had slumped to its lowest level since the 1920s, and starts were up by 29% in 2011 compared with 2009, so some progress has been made.

I want to focus on the excellent speech by the hon. Member for Westminster North—I have caught up on the notes—and to address some of the issues. I heard clearly her description of some of the people who are trapped in homelessness, and there is no doubt that the anxiety and pressure is immense. We have all seen that in our constituencies. I have been the Housing Minister or the shadow Minister for five years, and I challenge the hon. Member for Rochdale (Simon Danczuk) on who has visited the most homelessness projects. However, he is spot on to say that when one hears such stories and understands what is going on in people’s lives, it is often surprising and even shocking to realise how little of the problem is simply down to the roof over one’s head. I have yet to meet someone who is homeless and who does not have a catastrophic tale of complex circumstances such as family break-up, financial problems, health problems, sometimes mental health problems, having been in prison and not having got their life back together, and sometimes following active service. There is almost always a combination of some of those contributory factors.

I decided early on, following our work with the Homelessness Foundation, which was set up in 2008, that we need to make Government Departments work better together. That is why I set up the ministerial working group on homelessness. It is the first time that Ministers from different Departments—eight of them—have come together to work on these issues. They include the Department for Work and Pensions, which works closely with us.

I think we must accept that the Government and the Opposition start from slightly different positions. I passionately believe in a safety net to ensure that people are not made homeless, and Members on both sides of the House can be proud that this country probably has the best safety net in the entire world.

[Grant Shapps]

I will give way in a moment. It is a tribute to the Opposition as well as the Government that in this country we do not see families and children homeless on the streets. We do see single people homeless on the streets, and I will talk about the measures that I am taking to try to address that problem.

When people talk about homelessness, there is a confusing set of definitions; that has come out in our debate today. For example, when we talk about homelessness, we are usually talking about homelessness acceptances: people who have been accepted as having a right to be helped and who, in other words, will not be homeless because they will be provided with a home. Until now, that has been an offer in the social sector of a home for life, which more often than not can be passed on to a future generation.

It is still true, although one would not know it from the Opposition’s comments—I even wonder whether they are aware of it—that homelessness today is lower than it has been in 28 of the past 30 years, and half the average level during the 13 years of the previous Administration. I do not want to paint an overly rosy picture, because I am alive to the many real pressures and difficulties for families and family budgets posed by the extended downturn and the world economic problems. Opposition Members, including the hon. Member for Rochdale, rightly talked about not playing politics with these issues, but he then proceeded to play politics. It is not simple to resolve the problems, and the Government must find the right responses.

[Jack Dromey]

Does the Minister accept that his statement is misleading, because where we are now is a consequence of the 70% reduction under a Labour Government, and that is now in reverse with a 14% increase in statutory homelessness and a 23% increase in rough sleeping?

[Grant Shapps]

One of the problems is that it depends where the figures are taken from. The high point in the number of people in bed and breakfast accommodation was in 2004, which was a long time—seven years—into the previous Administration. We may say that there was a big reduction in, for example, the number of homeless people in temporary accommodation, and that may have been from halfway through the previous Labour Administration, but we must be very careful when trading figures. I am much more concerned about the outcome for people on the ground, and when I talk about people on the ground, I sometimes mean people at the bottom of the pile who are sleeping on the streets.

I am sure that the hon. Member for Birmingham, Erdington and other Labour Members feel some shame that the true size of the cohort of people living on the nation’s streets was buried under the previous system of counting. For example, if someone was sitting upright in a sleeping bag, they were not counted, and they had to be there at a certain time and so on to be counted. One of the first things I did was rip up the system that tried to claim that only 424 people in the country were sleeping rough. Any observer with any knowledge of the system, let alone hon. Members who had spent a lot of time studying homelessness, knew that that was nonsense. I have tried to reveal the true size and scale of the problem and not to bury it or hide it away, but I want to go further.

Reference has been made to the importance of the Supporting People budget. Despite the enormous pressure on reducing budgets to deal with the record deficit, we have kept almost the entire cash amount for the Supporting People programme. In fact, there was a 1% reduction in Supporting People over four years—£6.5 billion. I know that there have been problems on the ground—the hon. Member for Westminster North described them clearly—about the way in which Supporting People money has been spent. I understand that there are challenges when such funding is not ring-fenced—it was not ring-fenced in 2009—and that with other pressures the Supporting People budget has been pressurised on the ground, but it is not that the money has not been going in. Nor is it the case that we have reduced by even a penny support for homelessness. The homelessness budget was £400 million—£100 million a year—for the spending review period, and that has not been reduced.

I do not know whether it has escaped the attention of the hon. Member for Birmingham, Erdington, but during the past year, I took another £70 million, which was not in the spending review and aimed at homelessness, and put it into homelessness programmes, because I passionately believe in maintaining that fantastic homelessness support in this country. When we talk about people being homeless, we generally mean that they have been accepted as being homeless so that they can get a home, but there is a category of single people who do not receive help and support through our system. If a single person—the sort of people we are familiar with from our constituency surgeries—turns up at their local authority, under the rules that have applied until now they would simply be told, “I’m sorry, you are not covered as a preference category. We can do nothing for you.” That is not good enough, and I am sure that other hon. Members agree, so I have made £18.5 million available in the last few months to ensure that tailored advice is available for individuals, in addition to £10 million to Crisis to do the same.

I would dearly like to make the category of single people without dependants a preference category, and that should be the objective of any Government when money allows. I have not only protected all the preference categories that Opposition Members talked about—the work of Louise Casey was praised, and I echo that—I have added to those preference categories and I am trying to go further.

It is crazy that anyone who sees someone sleeping rough in this country must call the local authority; they may or may not get a response, and will not know what has happened afterwards. That is not good enough, so I am setting up a national helpline and a website to ensure that assistance can be brought directly to that individual. It will be run with the assistance of Homeless Link and will be in place by Christmas, and I hope that the whole House will join me in supporting it. When we see somebody sleeping rough, we have a terrible moment of dilemma about whether we should try to assist them directly—even if we do not know whether the money will be used in that person’s best interest—or do something else for them. Now we will be able to use the helpline, and information will be available so that people can see whether that person was helped and in what way. I think that is important.

We have also announced the “no second night out” initiative nationwide. “No second night out” came from the first cross-ministerial working group report, and I hope that Opposition Members will welcome it. The £70 million that I mentioned includes £20 million to back that programme, and it means that nobody in this country who is found sleeping on the street should ever experience a second night in that situation. I slept rough for a night to see what it was like: it is frightening and one feels vulnerable. We do not want any of our citizens to be in that position, and there is no reason for them to be because we have also allocated £42.5 million of funding to the hostel system, to ensure that new and refurbished hostel places are available.

The problem in this country, and particularly in London where we have the excellent combined homelessness and information network—CHAIN—database, is generally not about whether a hostel place is available on any given night, but about finding the individual, connecting them with the hostel, and sometimes persuading them to go into it. “No second night out” and the national reporting line is designed to help deal with that, and I am pleased to say that it has been taken up in Merseyside, Manchester, Leeds and Newcastle. It is an excellent, practical example of the way that we are trying to work.

[Grant Shapps]

No contribution from the hon. Gentleman would be complete without a reference to his own time as leader of housing in Hammersmith and Fulham. I think, however, that that council has a good record of looking for constructive measures that help to take people off the housing waiting list. For example, it was one of the forerunners in a programme that I launched recently with the Prime Minister to sell 100,000 homes under the right-to-buy programme. Critically, and unlike the previous programme, every penny of that money will be used to build more homes for affordable rent, and that seems to be a great solution. Not only can a family achieve their aspiration of purchasing their own property, but they can do so in the knowledge that somebody else is being taken off the housing waiting list. I have yet to hear whether the Opposition support the return to the right to buy, with the money going towards affordable houses.

[Jack Dromey]

rose—

[Grant Shapps]

I will happily give way so that I can understand the hon. Gentleman’s policy.

[Jack Dromey]

A straight answer to a straight question. Labour has supported the right to buy, but—crucially—we are not convinced about the bogus figures put forward that somehow suggest there will be one-for-one replacement. Councils are not able to retain the bulk of the receipts, and there is no guarantee that if a home is sold in a local authority area, a matching home will be built in the same area. We therefore fear that we will see a significant reduction in available social council stock, without any new build to compensate. Time will tell, but the sad reality will soon dawn.

Business and the Economy

Jack Dromey Excerpts

Monday 14th May 2012 Commons Chamber

[Jack Dromey (Birmingham, Erdington) (Lab)]

Not one brick will be laid, not one home will be built, and not one unemployed building worker will be put back to work, because there was not one reference in the Queen’s Speech to housing, despite the grim reality that we all see in our constituencies. In our surgeries, there are ever-lengthening queues of people desperate for a decent home at a price that they can afford. They are people such as the mother from the Lyndhurst estate who came to see me to get out of an overcrowded flat where, because of the damp, her baby was for ever ill. They are people such as the unemployed building worker from Marsh lane with two young kids—a good family—who was desperate to get back to work, having been made redundant from the building industry twice in six months. They are businesses such as the small building firm in central Erdington that is on the brink of bankruptcy because it can no longer get contracts to build homes. One in four young people in my constituency is out of work. Some of the young people I met on the Castle Vale estate are keen on getting an apprenticeship in the building industry, but all of them believe that they have no hope.

Birmingham and Britain are suffering from a combination of problems. We have the biggest housing crisis in a generation. There is rising unemployment, with more than a million young people on the dole. We have a double-dip recession, made in Downing street—the first in 37 years—not least because of the 4.8% collapse in construction over the past three months. Benefit bills and borrowing are booming—the costs of failure. This is an out-of-touch Government with a miserable track record of causing misery on a grand scale. They are making the housing crisis worse by the day, but fail to recognise that the best way to build Britain out of recession is to invest in badly needed house building.

Let us look at the Government’s track record. House building is down. The Minister for Housing and Local Government said:

“Building more homes is the gold standard upon which we shall be judged”,

yet house building has fallen by 11%. Under Labour, there were 2 million new homes built; under this Government, in the past three months alone, public house building has gone down by nearly 11%. Homelessness is up. The same Minister said:

“Homelessness was what brought me into politics”,

yet there has been an increase of 14% in the number of families reporting themselves homeless, and an increase of 23% in rough sleeping. Under Labour, homelessness fell by 70%.

We have a mortgage market from which people cannot get mortgages. The Secretary of State says:

“I well remember buying my first home. The sense of ownership, pride and independence. I want more young families to be able to experience that”,

yet home ownership, under that Secretary of State, is down by 75,000. The prediction is that an unassisted first-time buyer will now be 44 before they can get a mortgage.

The private rented sector is rapidly growing in size and is about to overtake the social sector. There are many reputable landlords but too many rogues, characterised by ever-increasing rents, yet the Prime Minister stood at the Dispatch Box and said that we have seen rent levels go down, despite the fact that the Government’s own figures show that rents have risen by 3% in the private sector in all nine English regions and in 89% of local authorities.

What we are seeing is a combination of monumental mistakes of economic management on the one hand, and grotesque unfairness on the other—monumental mistakes such as that made by the Chancellor back in October 2010, when he cut £4 billion overnight from housing investment. That led to a 99% collapse in affordable home building. As for grotesque unfairness, the 2011 figures for the new homes bonus showed that an area of high need and high unemployment such as Knowsley would get 37p per head, but the City of London would get £28 per head.

The country desperately needs homes, jobs and growth. That is exactly what a Labour Government did at a time of economic crisis—the bankers crisis back in 2008. Because we knew that we had to grow the economy and meet housing need, our kick-start programme saw 110,000 homes built and the creation of 70,000 jobs and 3,000 apprenticeships. The industry has said to me time and again that it was that kick-start programme which sustained it against what would otherwise have been collapse. That is why we propose, rightly, a repeat of the bankers’ bonus tax which could see 25,000 homes quickly built and jobs created for 100,000 young people. We also propose a temporary cut in VAT on home improvements, which would result in better homes, people employed in improving those homes, and jobs and wealth being created along the building industry supply chain.

In conclusion, there is a dramatic contrast between the politics of hope and the politics of despair. Labour represents the politics of hope. That is why the newly elected Labour council in Birmingham has committed itself to building 70,000 homes—an ambitious objective, but it is determined to meet housing need and to help build Birmingham out of recession. Stories of despair, on the other hand, are numerous, but let me tell one. A young woman who appeared recently on the Today programme wishes to remain anonymous, but I know who she is and I have spoken to her in some detail.

As a consequence of the collapse in affordable house building in London, soaring rents in the private rented sector and the Government’s benefit changes, this young woman was suffering the unimaginable. She had been married to a banker. Their marriage had broken up but they had remained close. Tragically, he died. She then lost her home. Her daughter was distraught. The mother needed her own mother to look after the granddaughter through a desperately difficult period for that family, but having been made homeless and ending up in temporary accommodation, she got a phone call on a Tuesday—she lives in Waltham Forest—saying, “We need you to go to Walsall tomorrow, Wednesday.” She was in despair over what was happening to her. She could not believe it. She said, “Me and my husband, all along we thought that the Government would stand by us at our time of need,” and they abjectly failed to do that.

The Government were warned against the consequences of their action from within Government. They chose to go down this path. Any Government who inflict pain on a citizen of this country in that way ought to be ashamed of themselves.

Finance (No. 4) Bill

Jack Dromey Excerpts

Thursday 19th April 2012 Commons Chamber

[Nigel Mills]

No, I will happily discuss the granny tax. I feel no shame about my Government’s policies. Unlike Opposition Members, I am not trying to airbrush out most of the last 12 years of history and pretend that all those disasters never happened. I am happy to address what the Government are doing.

We need to put the position in context. In the financial year that has just ended we were still spending £126 billion more than the tax revenue that was raised, and we expect to spend more than £90 billion more than tax revenue in the current tax year. That is not a healthy financial situation, and it is not a desirable position. We do not have enough money to go around doing many things that we would like to do, no matter how useful or socially valuable. The global financial situation is very difficult, and we must make difficult decisions. During the election campaign, Government Members told potential constituents “This will be a difficult Parliament. We will have to make cuts, not because we do not think the things we are cutting are good and not because we would not prefer to leave them as they are, but because we must try to sort out the horrible mess that exists.”

[Jack Dromey (Birmingham, Erdington) (Lab)]

Did the hon. Gentleman say to his constituents “Elect me, and we will introduce a granny tax to fund a tax cut of £40,000 for 14,000 millionaires”?

[Nigel Mills]

Obviously I did not say that, because I would have been wrong if I had, but I did say that no section of the population would be spared the pain caused by our sorting out the mess that we would have to deal with. I would also have said that I considered the 50p or, more accurately, 52p tax rate an invidious measure which had been devised as a political trap, that it was a terrible tax policy, and that it would probably raise very little money.

The two independent studies that support the Budget have shown that the cost of lowering the rate to 45p is about £100 million a year. The saving from the so-called granny tax is approximately 10 times the size of that. If anything in the Budget is being funded by the granny tax, it is the reduction in personal allowances for the low earners in society.

Finance (No. 4) Bill

Jack Dromey Excerpts

Wednesday 18th April 2012 Commons Chamber

[Sheila Gilmore (Edinburgh East) (Lab)]

This debate has clearly demonstrated that Members have very different views on how to tackle the current economic situation. I was very struck by one commentator’s observation that the Government were leaving economic recovery to business—that they were expecting business to spring up and solve our problems. That is what we heard almost two years ago, in the so-called emergency Budget—which did not, in fact, do anything terribly urgent. We were told then that very shortly the shoots of private enterprise would spring to life, particularly if we cut the public sector. Almost two years later, we are still waiting for that, however; it simply has not happened. It is not good enough for us simply to sit back and say, “Somehow, this is going to sort itself out.” It is right to want to stimulate the economy, and to create jobs and work.

Construction and affordable housing are essential. I live in a city with an acute shortage of affordable housing. There are many planning permissions and consents in place for new house building, which would have had at least an element of affordable housing, so the problem is not the planning system. Nothing is happening, however. The ground lies idle, and the building firms have paid off their workers and are waiting for the upturn, hoping that the land values will carry them through.

What is so wrong with wanting to raise some extra revenue and stimulate the economy in that way? If building workers are back in employment and private building firms are flourishing, then those workers will have income with which to stimulate the economy.

There has been a huge downturn in retail over the past few months. I read today that there has recently been a slight upturn because of the good weather in March, but, certainly where I come from, that has now been followed by three weeks of pretty rubbish weather, so presumably that upturn will now have been reversed. There has been a downturn in retail because people feel they do not have money to go out and spend. The whole local economy is affected by that. The knock-on effects on the local economy of investment in affordable housing are huge.

[Jack Dromey (Birmingham, Erdington) (Lab)]

The Government’s own figures show that house building is down and homelessness is up. In 2008, a Labour Government acted, at the time of the bankers’ crisis, with a kick-start programme, which resulted in 110,000 homes built, 70,000 jobs created and 3,000 apprenticeships. That sustained the building industry. Do we not now need a fresh kick-start programme—hence the importance of our bankers’ bonus tax—so that we can build 25,000 homes straight away, create jobs for unemployed building workers and create hope and apprenticeships for the young people of our country?

Amendment of the Law

Jack Dromey Excerpts

Thursday 22nd March 2012 Commons Chamber

[Jack Dromey (Birmingham, Erdington) (Lab)]

Just about the only announcement that was not flagged up in advance of the Budget yesterday was the £3 billion granny tax grab, which means that those men and women in my constituency who built Birmingham and Britain, who are coming up to retirement next year, will face a cut in what they had hoped and planned for of £314.

There are many laughable examples from the historical lexicon of the politically disingenuous—for example, the spokesman in the dying days of the Nixon Administration who said at the height of Watergate that “all statements heretofore issued are now considered to be inoperative”—but to describe this granny tax grab as “simplification” takes some beating. There is one thing that the Business Secretary and I have in common: we are both follicly challenged. Neither of us detains hairdressers for too long. Following yesterday’s Budget announcement, the next time I go to Imad’s, the barbers on Slade road, I will ask for my hair not to be cut, but to be “simplified”.

Why has this happened? Quite simply, it is a granny tax grab to fund a £40,000 tax cut for 14,000 millionaires.

[Sir Peter Bottomley]

The Labour Government were in power for about 150 months. For fewer than two of those 150 months they had the 50p tax rate. Why?

[Jack Dromey]

I will contrast the record of our Government with the record of the hon. Gentleman’s Government, any time. After 13 years of a Labour Government, Britain was a stronger, fairer, better country. We have now been given a Bullingdon Budget whose first priority is millionaires, by a Cabinet who are oblivious to the consequences.

[Jacob Rees-Mogg (North East Somerset) (Con)]

rose—

[Jack Dromey]

I give way to the hon. Member for Downton Abbey.

[Jacob Rees-Mogg]

I am extremely grateful for that substantial promotion in my class standing. Will the hon. Gentleman explain why, when tax rates were cut in 1979 and again by Nigel Lawson, that led to more revenue coming in? This point has been ignored by the Labour party.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Just before the hon. Member for Birmingham, Erdington (Jack Dromey) resumes his speech, I want to make sure that he meant North East Somerset.

[Jack Dromey]

I stand corrected, Mr Deputy Speaker.

This Government are oblivious to the consequences of their actions. I am proud to represent Birmingham, Erdington. It is a constituency that is rich in talent but it is one of the 12 poorest in Britain. I see what too many Conservative Members shut their eyes to, which is the pain being felt in such constituencies as a consequence of the Government’s actions. Let us take as an example the hard-working Castle Vale family who have two wonderful children and earn just over £20,000. They face a £253 cut to their tax credits in April. Let us consider the one in four young people in Kingstanding who are unemployed. They are desperate for a job, but the Budget offers them no hope. Alongside the victims of the shameful changes to housing benefit and the changes in the Welfare Reform Act 2012, there are 1,333 households in my constituency who are now facing the iniquitous consequences of the bedroom tax.

Grotesque unfairness runs through everything that this Government do. For example, let us contrast how Birmingham and Wokingham have been treated. High-need, high-unemployment Birmingham has had £313 million of cuts to its local budget over the past two years, resulting in every citizen in Birmingham losing £164. In leafy Wokingham, the figure is £19. Whether we are talking about police budgets, fire budgets or the voluntary sector, why have the Government got it in for cities such as Birmingham? They should be standing by such cities; at a time of rising unemployment, they need more help, not less.

Now we are to have regional pay. I declare an interest, in that I have led many national bargaining arrangements in the national health service, in local government and in the Ministry of Defence. I worked with some Conservative Members when they performed various ministerial duties in that regard. For example, I was chair of the MOD unions at a time when a Conservative Minister was chair for the Government side. Anyone who has experience of national bargaining knows that it is efficient, that it is increasingly flexible in its approach and, crucially, that it is fair. The Government’s proposal will say to nurses, teachers, doctors, firefighters and home carers in Birmingham that they are worth less than their counterparts in Surrey.

[Angie Bray]

Does the hon. Gentleman’s dislike of regional variations mean that he does not support his own party’s take on the possibility of regional benefits?

--- Later in debate ---

[Jack Dromey]

We would never introduce the kind of unfair flexibility—if I can call it that—that the Government are now promoting. The simple reality is that hard-hit areas will be hit even harder in the next stages, be they in Wales, the north-east, the north-west, Birmingham or Northern Ireland.

In the time remaining to me, let me deal with something that commanded but a passing reference in yesterday’s Budget—housing. We have the biggest housing crisis in a generation. Millions of people in Britain are in need of a decent home at a price that they can afford. About 2.8 million people are on council waiting lists, 30,000 of them in the city of Birmingham. Owing to the combination of this Government’s economic mismanagement and the failure of their housing policies, this crisis gets worse by the day.

House building was down by 11% over the first 18 months of this Government in comparison with the last 18 months of the Labour Government. It was the vainglorious boast of the Housing Minister who gives hubris a bad name that he would beat Labour “hands down” year on year, but that is not what is now happening. Homelessness is up, with families presenting themselves as homeless up by 14%. Rough sleeping is up 23%, yet it fell by 70% under the Labour Government. We have a mortgage market where millions struggle to get a mortgage. Scottish Widows estimates the average age of unassisted first-time buyers to be going up from 37 to 40 to 44. We have a private rented sector growing rapidly which is characterised by soaring rents and, all too often, abuse of tenants.

What, then, of the “housing revolution” announced by the Government in November last year? All I would say is that if we had a house for every press statement issued before and after that time, we would not have a housing crisis. The Prime Minister and the Deputy Prime Minister donned wellies and went to a building site to say that all would be well. What came out the following day, however, was that as a consequence of the £4 billion cut instituted by the Chancellor in October 2010, affordable house building had collapsed by 99% throughout England.

What of the new homes bonus? It is both inefficient and unfair, while our planning system is being thrown into chaos by the Government.

[Richard Fuller]

The hon. Gentleman is talking about the building of affordable homes. Does he not regard it as appalling that, under the last Labour Government, the building of social houses went down by 25%?

[Jack Dromey]

Under our Government, there were 2 million new homes, 1 million more mortgage holders and half a million more affordable homes, and 1.6 million homes were renovated under our decent homes programme. Has housing been at centre stage as much as it should have been under successive Governments for 25 years? No, but I will compare our record any time with the failure of this Government.

In conclusion, housing matters. Housing matters to the economy. Housing matters to health, as evidence of the damage done by poor or overcrowded housing confirms. Housing matters to educational attainment. Kids are held back at school because they live in damp or overcrowded housing. That is why urgent action on housing matters. That is what we did in 2008, after the bankers’ collapse, with our kick-start programme, which had 110,000 homes built, creating 70,000 jobs and 3,000 apprenticeships. That is why we are absolutely right to say that we need a repeat of the bank bonus tax to build tens of thousands of homes, to create jobs for unemployed building workers and to create apprenticeships and hope for the young people of my constituency. I see the consequences of the Government’s actions every day, and I know what my constituency wants. It wants to put people back to work to build that which the community so badly needs—homes.

Banking (Responsibility and Reform)

Jack Dromey Excerpts

Tuesday 7th February 2012 Commons Chamber

[Jack Dromey (Birmingham, Erdington) (Lab)]

With house building down, homelessness up and nearly 2 million people on waiting lists for council housing, does my hon. Friend agree with the unemployed building worker in Erdington who said to me that the time has come to tax the bankers, build homes, put people such as him back to work, and create apprenticeships and hope for our young people?

[Mr Umunna]

I agree with my hon. Friend, and that is why we are arguing for the reintroduction of the bank bonus tax, as part of Labour’s five-point plan for growth and jobs.