Prevention of Social Housing Fraud Bill

Debate between James Clappison and Lord Harrington of Watford

Friday 13th July 2012 Commons Chamber

[Richard Harrington]

My hon. Friend, as usual, makes a considered point. I do not quite know the answer. I do not know why the problem has not been dealt with before. When researching the subject, I noticed that it had been talked about for a long time. Bodies such as the Serious Fraud Office and the National Audit Office have identified the problem, and for years Governments have had it on their mind, but it is one of those small things that slip through the net of legislation.

[Mr James Clappison (Hertsmere) (Con)]

An important question has been put to my hon. Friend on this point. Is he aware that in a consultation carried out with housing associations, which are obviously very worried about the problem, they identified as one of the main concerns in this area the lack of sufficient deterrent penalties available for people who engage in such activity and thereby enrich themselves?

[Richard Harrington]

I am aware of the consultation. Having researched the matter, I know that the problem has increased over the years, as my hon. Friend the Member for Bury North (Mr Nuttall) suggested. I hope that there is a general consensus that it is time to do something about it. My hon. Friend the Member for Hertsmere (Mr Clappison) has been in the House since 1992 and so might remember speeches and contributions right hon. and hon. Members have made on the subject. Like my hon. Friend the Member for Bury North, I was quite surprised that it has not been included in legislation by this Government, the previous one, or indeed the one before that. In my humble way, I can simply deal with the problem as it is today.

Clearly there is a problem. This type of sub-letting is something I am sure the public think is a criminal offence. It is an outrage that an estimated 150,000 social housing tenants—50,000 is the most conservative figure, but the National Audit Office’s estimate is 150,000—are illegally sub-letting their properties. Typically, it is done by someone who qualifies for a social tenancy because they have the necessary points in the scoring system. They sign a contract with a social housing provider but then illegally sub-let it to a tenant, who in many cases pays a market rent for the property, and then pockets the difference between that rent and either what they are paying themselves or what is being paid as part of their housing benefit.

That is not simply taking advantage of the situation financially; it also means—in many ways this is a worse aspect—that a family who are on a waiting list and would be entitled to the property cannot occupy it. I know from correspondence with hon. Members across the House that this is a problem in their constituencies; I know of no area where it is not a problem. The shadow Minister, in my discussions with him, explained that he thinks it is a greater problem in the London area, but that is only because properties in London are rented out in the private sector at a much higher rate. I have yet to meet a Member of the House who is not aware of this being a problem in their constituency.

University Admission

Debate between James Clappison and Lord Harrington of Watford

Tuesday 8th March 2011 Westminster Hall

[Mr Clappison]

One of the crosses that the Government may have to bear as a result of that guidance is a great deal of scrutiny of grades, and comparisons between the grades that people from certain schools received, and which universities they successfully applied to. I have a lot of confidence in university admissions tutors and their approach to the job, particularly in the most selective universities.

[Richard Harrington (Watford) (Con)]

I, too, congratulate my hon. Friend on securing this debate on an important subject. In August last year, the Minister told the Daily Mail:

“Admissions policies are for universities, not for Ministers”

Does my hon. Friend agree?

[Mr Clappison]

That happily brings me to my next point. I imagine that the Minister will say, in his fair way, exactly what he said to the Daily Mail a few months ago. I am sure he will be anxious to reassure us that the Government intend universities to be free to continue to make judgments and admissions based on individual merit. However, in light of the guidance given to universities by the Office for Fair Access, I am afraid I will not able to place as much confidence in the Minister’s reassurance as I would like, and it would be stretching my credulity to accept it at face value. In the long directive from the Office for Fair Access, the word “merit” appears only once after 25 paragraphs of detailed instructions to universities, backed by the threat of financial pressure. It uses the words

“so long as individuals are considered on their merits and institutions’ procedures are fair, transparent and evidence based.”

That is the only place I can find the word “merit”, and it appears in much the same place as one would expect to find the legal small print in an advertising brochure.

Finance (No. 2) Bill

Debate between James Clappison and Lord Harrington of Watford

Monday 11th October 2010 Commons Chamber

[Richard Harrington]

Well, the cut cost in excess of £300 million, and it is common sense that people do not change spending decisions based on a 2% difference.

I shall move on, because time is running short and I wish to talk about two parts of the Bill. The first relates to the British film industry. The Bill contains a technical adjustment to film funding to allow more leeway in calculating the amount that is surrenderable for tax credit. That sounds complicated, but it is sensible. The real issue is the need for appreciation by this House of the film industry’s economic contribution.

I must confess to having a constituency involvement, in that Leavesden film studios, where much of “Harry Potter” was filmed, are in my constituency. The American company Warner Bros has announced that it is acquiring the site, and that there will be a big increase in employment. Hopefully those studios, as well as Pinewood, Elstree and many others, will continue their prosperity.

[Mr James Clappison (Hertsmere) (Con)]

My hon. Friend’s mention of film studios tempts me to intervene. As he knows, Elstree studios are in my constituency in Hertfordshire, and Hertfordshire as a whole has a world-class tradition of film making. “Star Wars” was made partly in my constituency, as were many other famous films—he mentioned “Harry Potter”. Does he agree that through financial incentives it is possible to build on that tradition and create considerable employment opportunities for many young people in a growing industry?

[Richard Harrington]

I thank my hon. Friend, and of course I agree with him. Our part of Hertfordshire is rapidly becoming the Hollywood of southern England—or its Beverly Hills, in the case of his bit.

There is no doubt that taxation of the film industry is important. According to a recent Oxford Economics study, the industry employs 35,000 people and makes a direct contribution of £1.6 billion to the UK economy. It pays about £445 million in tax, even without any multiplier effect being applied. The £110 million in tax allowances for it in the Bill and in previous Acts of Parliament represent very good value for this country.

Why am I speaking about the film industry, given that as far as I am aware the main political parties agree about the need to provide that assistance? It is because the industry provides an example of not only some of the best uses of Government credits, but some of the worst. Following an earlier Act of Parliament, the accountancy tax avoidance industry used perfectly acceptable vehicles for investing in the film industry as tax avoidance methods. Film and television producers have told me that their films or programmes, which were effectively pre-sold so that there was no financial risk whatever, were used to provide large tax benefits through comparatively risk-free investments. That opportunity was correctly removed about two years ago, but that does not mean that the Government should ignore the perfectly reasonable demand for very high-risk investors to have a tax-efficient vehicle to invest in the film industry. That is good for this country and leads to vast amounts of money and a lot of high-quality employment being brought in. I accept that the Government have much greater priorities at the moment, but I ask them to consider introducing a proper, tax-efficient vehicle for venture capital investment in the film industry, in a way that does not allow it to be used as a method for tax avoidance, which is quite unacceptable.

Secondly, I feel that because of my experience in business and the continual discussion in the press and the House about whether the banks lend enough money to businesses, I should tell the House of my experiences in Watford. I have spoken to most of the major banks there and to nearly 100 small businesses to find out the exact position. Members will know that a Bank of England document shows that the monthly average of new loans has gone down from a peak of £991 million in 2008 to £564 million in 2010, which is a significant reduction.

However, the real question is not the volume of loans being granted but the percentage of loan applications that are rejected. That figure is never seen. The banks’ criteria for lending used to be entirely based on property. Many business loans were really property loans in disguise, because they involved guarantees based on the personal houses of people who were borrowing money. Now the banks do not like lending money on property, so for the first time they are looking at small businesses’ balance sheets, cash flow and business plans. They are treating them as stand-alone instruments.

I observed the figures in Barclays bank’s main business lending office only two weeks ago. I saw people borrowing money and businesses having money advanced, but the reality is that the property-based loans, for the moment, have gone. That is one reason—not a macro-economic reason, but a practical reason—why lending is low. There is money available for small businesses. I agree that management fees are high. That is because banks have to spend a lot of time on a £50,000 loan, instead of just saying, “He’s got a house worth half a million, so we are not worried about anything else.” As we know, the spreads are high because banks can lend money to Governments for 2% over the base rate, so to lend to a small business banks have to consider a spread greater than that. There is more to bank lending than meets the eye, and we should consider the number of applications compared to the number of rejections.

I see that it is 8 o’clock. I know that other Members want to speak, so I shall leave it at those two comments.