Cost of Living: Energy and Housing

Jeremy Corbyn Excerpts

Thursday 5th June 2014 Commons Chamber

[Mr Davey]

I am afraid that the hon. Lady is completely wrong. Higher rate taxpayers did not get the allowance increase. This is one of the fairest tax cuts, because it is focused on the low-paid and people on moderate incomes. I must say that she does not understand how the tax system works.

[Jeremy Corbyn (Islington North) (Lab)]

rose—

[Mr Davey]

I will give way to the hon. Gentleman, but then I will have to make some progress.

[Jeremy Corbyn]

As the Secretary of State is talking about living standards, is he proud of the fact that many people living in the private rented sector in central London and other big cities are being socially cleansed out of their homes by a combination of high rents and benefit caps? Does he not think that that is a disgrace, that those communities are being damaged and that those children’s life chances are also being damaged? Should he not do something about it?

[Mr Davey]

The hon. Gentleman has been a champion in the debate on housing in London for many years. I do not think that he can point to any halcyon days over the past 30 years. The cost of housing was the biggest issue when I became an MP in 1997, and for many of my constituents it remains the biggest issue. There have been changes, but many of the housing benefit changes that we have made have actually hit the landlords, not the tenants. I think that he ought to welcome that.

I am very proud of our record of helping people on low incomes, and not only the personal tax allowance increases, but the rest of our help with the cost of living—fuel duty freezes, council tax freezes, free school meals and help with child care. The coalition has listened and is helping. Of course, all those measures take time to feed through. Everyone knows that in some parts of the country people are yet to feel the turnaround, and that was always inevitable. Many people are only now beginning to experience the end of the post-recession squeeze.

I think that what is worrying the Labour party is that in 10 months’ time many more people will be feeling the benefits of the recovery and Labour’s latest economic argument on the cost of living will look ever hollower. Of course, last summer the Opposition already began to switch their economic argument again. It was not the general cost of living or general inflation that they were talking about, or the full basket of goods that people buy; it was a few specific ones. That is why we have today’s debate on energy and housing costs. They are very important issues, and my right hon. Friend the Secretary of State for Communities and Local Government will, I am sure, take on the housing costs debate. I am sure that he will cover not only our record of low mortgage rates, but our record and our plans to build more houses to reduce housing costs.

However, I want to deal with energy costs, because, unlike the previous Government, we have acted on energy bills. We have taken on the energy companies, unlike the Leader of the Opposition when he was doing my job, when he could have acted but did not. It is interesting to look at the record on energy bills. In almost every year under Labour, energy bills rose: in 2005 they went up by 12%; in 2006 they went up by 20%; and in 2008 they went up by 16%. In the previous Parliament, under Labour, energy bills rose by a whopping 63%, and Labour did nothing. Yet they lecture us. Of course, bills have also risen in this Parliament, but by 8% a year, compared with 11% a year in the previous Parliament.

Labour did act to reform the energy markets; they managed the great feat of reducing the number of energy market firms and creating the big six. In other words, they made it worse and created another mess for us to clear up. This coalition is really reforming the energy market and taking on the energy companies. From day one, we began reforming the market to create real competition, with new competitors. Twelve new independent suppliers have entered the market since 2010, and independents are topping the best-buy tables, increasing their market share from less than 1% to 5% and rising, giving people a real chance not only to freeze their bills, but to cut them.

Just look at what has been done to help people with their energy bills: Ofgem’s reforms are making bills simpler and forcing firms to put consumers on the cheapest tariffs; switching rates are increasing, with switching speeds getting faster; and Government action is taking £50 off the average energy bill. Where the Opposition wanted to legislate for a freeze, with all the impact such regulatory intervention would have on investor confidence, the coalition has worked to ensure that the Government and competition are delivering something better than a freeze. Scottish and Southern Energy, British Gas, npower, Scottish Power and EDF have all announced that they will not increase energy prices this year unless network costs go up or wholesale energy costs rise, and of course they are not.

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[Mrs Caroline Spelman (Meriden) (Con)]

It will certainly be in my interest to keep my speech relatively short. I rise to speak in support of the Gracious Speech and, in particular, of the historic significance of the Modern Slavery Bill. I realise that it has only a tenuous connection to the themes we are debating today, but I want to talk about the housing of trafficked victims and I hope that the Ministers present will take that into account.

It is no coincidence that my hon. and learned Friend the Member for Harborough (Sir Edward Garnier) also chose to focus on this subject today. The Modern Slavery Bill is the proposal in the Queen’s Speech with the greatest historic significance. Who would have thought that we would need to pass further legislation to tackle slavery more than a century after all the efforts of William Wilberforce and his supporters? The brutal truth, however, is that the estimated number of slaves worldwide now stands at 21 million and that the slave trade generates £150 billion of illegal profits annually. That is three times more than was previously estimated. Those figures come from the International Labour Organisation. In this country, the trouble is that the slavery is largely hidden. It was no surprise that the Centre for Social Justice entitled its report on the subject “It Happens Here”, because it does. I hope that the publication of the Bill will raise awareness.

I could not speak on this subject without paying tribute to someone who has really raised awareness of modern-day slavery: the former Member of this House, Anthony Steen. In 2006, he began his work of shining a searchlight on this iniquitous trade in human beings. He has worked for the Human Trafficking Foundation and now plays a pivotal role in raising public awareness. The foundation includes among its trustees the right hon. Member for Birkenhead (Mr Field), who was asked by the Home Secretary to chair the pre-legislative scrutiny Committee. He did so with remarkable skill, garnering support from both sides of the House.

The Home Secretary is to be commended for tackling this wicked issue head-on. It is also significant that the whole House came together during the pre-legislative scrutiny stage in recognising that we need to tackle the matter on a cross-party basis. My right hon. Friend has clearly been motivated by the shortcomings in the existing law. A good Queen’s Speech should contain legislation that brings together, rationalises and simplifies existing laws that are dotted around in other Acts. This Bill will do that.

I was surrounded by erudite lawyers during the pre-legislative scrutiny stage, and I was struck by the fact that the prosecution rate was so poor because of misunderstandings surrounding the definition of slavery. Indeed, those misunderstandings extend as far as the European directive that covers the problem, which highlights trafficking. Those prosecutions often fail because victims of trafficking stand up in court and swear on oath that they came here of their own free will. Indeed, they are sometimes paid to come here, only to find themselves subject to servitude. When we try to prosecute on the ground of trafficking, the case therefore often fails because the witness says that they moved here of their own accord. In a funny sort of way, if the European directive had been drafted in English first, we would have spotted that problem: trafficking is not actually the overarching term that needs to be used. We need to refer to “exploitation”, of which trafficking is an aggravation. This Bill is an opportunity to get that balance right, and we are indebted to such people as Lady Butler-Sloss, who applied her razor-sharp mind to that pre-legislative scrutiny Committee and helped all of us to understand where these kinds of problems lie.

The Bill will break new ground because it will pay attention to the need for victim care and support. If it had neglected that aspect of this problem of modern-day slavery, I would be a good deal less enthusiastic about the Bill than I am. But I was delighted to hear that need to improve victim care and support spelled out in the Queen’s Speech. I do not underestimate the political challenges of protecting those who admit to breaking the law under coercion, but we will never stamp out this iniquitous trade in human beings until we get enough victims to testify. That is why I was encouraged to hear that a serious crime Bill will strengthen powers to seize the proceeds of crime as part of this Queen’s Speech. I firmly believe that some of those proceeds need to come back to the victims, which would help them to come forward to give evidence against the real criminals, who are the ones we need to catch. The care of victims of slavery in our country is nothing short of a scandal. I am sure there will not be a Member in this House who has not sat in a surgery hearing from someone—often someone young—who has been brought to this country under false pretences and still remains stateless within our society.

We also face real problems in trying to distinguish between those victims and the genuine criminals. I have heard evidence from victims who, just hours before being deported, were saved only by the swift intervention of lawyers, often working on a pro bono basis and some funded by the POPPY project, at detention centres. That happens all too often because of the inherent conflict of interest whereby UK Visas and Immigration, formerly the UK Border Agency, which is primarily responsible for getting immigration down, is the agency overseeing the decision about who stays and who goes. In some cases those almost deported faced a dangerous future, returning to families complicit in their trafficking in the first place. Anyone alleging slavery is invited to use the national referral mechanism, which contains questions designed to elucidate their real status. If they get through that, they are given just 45 days’ protection. That is my point about housing: what are these victims of trafficking expected to do about accommodation, after just 45 days of protection, while their whole situation remains uncertain? That is a cross-departmental consideration, so I hope the Ministers here today could give it some thought.

America is ahead of us, with statutory victim care and support. It has a designated independent anti-slavery ambassador, with a full-time complement of 80 staff, reporting directly to the President. The plan in this country is for a commissioner to be appointed by the Home Secretary, but an anti-slavery commissioner must be able to crack the whip round Whitehall, precisely because of the example I have just given about the lack of suitable housing for trafficked victims. We will not be the first country in Europe to have a commissioner; countries that have developed the role include Finland and the Netherlands. Of course I understand that the commissioner needs to have the sponsorship of one Department in order to secure adequate resources from the Treasury, but the commissioner must remain sufficiently independent to put a rocket up the prosecution service, as a Home Office Minister put it.

Children who are victims of slavery are a particularly important concern to us. The Government have recognised that with pilots for children’s advocates. A young person does need someone to fight their corner with authorities and stay on their case. A particularly worrying aspect of child slavery in this country is the fact that sadly children are often send to the UK to serve family members as slaves, even for sex. One victim told us that even when she was allowed to go to church on Sundays, she was forbidden to speak to other people. That shows how we need to open our minds and our eyes to the hidden slaves around us. We should try asking the chamber maid, the cleaner and those we fear might be under duress and offer a friendly hand of help where we can.

[Jeremy Corbyn]

The right hon. Lady is making an excellent speech. She must be aware of the problem of children living in informal foster care with distant relatives in this country, which means that nothing is done to regularise their immigration status and they are threatened with removal at age 18, having been completely unaware that they had no status whatsoever. The Home Office needs a different approach to the matter.

[Mrs Spelman]

The hon. Gentleman raises an important anomaly, and it certainly ought to be debated in relation to the Bill.

I have two more points to make. The first is about the Gangmasters Licensing Authority’s transition from the Department for Environment, Food and Rural Affairs—it was under my wing when I was Secretary of State— to the Home Office. The Gangmasters Licensing Authority does an excellent job in the sectors of the economy that it currently covers—agriculture, fisheries and horticulture—but sadly, slavery is rife in many other sectors, such as catering, cleaning and hospitality. I urge all Government Departments to make use of the Gangmasters Licensing Authority model to tackle slavery in the economic sectors for which they have responsibility.

Finally, I believe that the Bill must contain a clause on supply chains. That would make the legislation world-class. Businesses in general need to reappraise the risk of slavery in their own supply chains. That has already been achieved in America, where the Transparency in Supply Chains Act has been passed in California. Any European company that wants to do business in California must be compliant. The hon. Member for Linlithgow and East Falkirk (Michael Connarty) introduced a private Member’s Bill on the subject, which I am sure he would wish me to remind the House of. We need a clause in the Bill that tackles the problem. Until businesses are made to report on due diligence, ruling out slavery the length of their supply chains, they will continue to be at significant reputational risk and, sadly, the victims will continue to suffer.

The UK has the potential to provide global leadership on this important issue. Frankly, with our heritage and the Wilberforce spirit behind us, we ought to be able to do that, and this Queen’s Speech opens the way.

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[Jeremy Corbyn (Islington North) (Lab)]

I am pleased to be able to speak in this debate, which takes place in the atmosphere generated by the negative attitudes of the UK Independence party and others in the recent local and European elections. I urge people to be very cautious about starting to dance to the tune of xenophobes and closet racists or, indeed, open racists in their attitude towards society as a whole.

I compliment in particular the speeches of the right hon. Members for Meriden (Mrs Spelman) and for Uxbridge and South Ruislip (Sir John Randall) for highlighting the human consequences of what happens to people who migrate from one place to another. We should be aware of the fact that in every story there is a human story and in every tragedy there is a human tragedy. We should not suddenly shut the doors against anyone who is fleeing from violence, oppression or destitution, which is, indeed, what many people are doing.

Of course, the situation has consequences for our society, but people from this country have also sought to migrate to many other parts of the world in order to make a better life for themselves. This is the way of the modern world. If we start saying that nobody can come here, other countries might start saying that none of us can go there. These things go full circle, and we should be more cautious in our attitude to issues of migration and society.

I want to make two germane points and I will try to adhere to the 10 minutes suggested by Mr Speaker. First, the Queen’s Speech stated:

“The Bill will enhance the United Kingdom’s energy independence and security by opening up access to shale and geothermal sites and maximising North Sea resources.”

I urge a degree of caution before we rush down the road of fracking all over the country, particularly the north-west, which will have environmental consequences. Many different organisations hold briefing sessions in this House—it is a form of lobbying and there is nothing wrong with that—and I was astonished at the large attendance at yesterday evening’s Friends of the Earth briefing on fracking and its consequences. A very interesting speaker from Australia, where there has been much fracking with apparently limited controls, explained what has happened there. She pointed out that a vast amount of water is used for fracking and that it causes pollution when it is pumped up to ground level. Storage ponds are needed to allow the water to settle and the process has longer-term environmental consequences.

Indeed, the first line of fracking has caused earth tremors in Lancashire, and there has also been a significant number of earth tremors in the United States as a result of fracking. Although it is presented as a cheap form of energy—any cheap form of energy sounds attractive when we first hear of it, and there is all kind of talk about Klondike and the new gold rush—there are two problems. One is the congestion caused by extra traffic and the noise and other pollution caused by the process itself, and the other is the clean-up phase afterwards. Are we not building in potentially huge costs to the public sector in having to clean up all the environmental pollution that will result from the process?

Surely we should be thinking even more strongly than we have up to now about energy sustainability and security, by which I mean not necessarily producing vast amounts more, but using a lot less through better conservation, better insulation and more efficient forms of transport, as well as, increasingly, the use of renewable energy. It is populist to attack wind farms, but they make a significant contribution to our electricity supply and will continue to do so. They do not, of course, create the pollution problems of fracking or any other fossil energy. There will be a huge debate about fracking and I would be very cautious about going down that road, because of the pollution problems it causes.

The other issue I want to address is housing. I represent an inner-city constituency and am very proud to do so. We face massive housing problems. We have an image problem, in that everyone thinks that Islington is an extremely well-off, wealthy and great place to live. It is, indeed, a great place to live, but the housing market is totally out of control. A first-time buyer seeking to buy in my borough would need to be on a very substantial income indeed, so no MP need think about buying as a first-time buyer in Islington.

We also have a large social rented sector—it is mainly council-run, but there are some housing associations—which makes up about 40% of the market. Thirty per cent. of the population in my borough live in the private rented sector. They pay very high rents and have very good security as a result. Those in the private rented sector who are in receipt of housing benefit or any other kind of benefit now find that the Government’s benefit cap affects them in a very damaging way. They are unable to pay the rent from their housing benefit, and they cannot make up the gap between their housing benefit and the rent level from any other benefits or, indeed, their wages—their low wages; many people receiving housing benefit are already in work. The council does not have enough houses to put them in, so they are forced to move away from the borough to a private rented flat somewhere else in London or, in the case of other London boroughs, outside London. That means that families have to up sticks and move, caring and child care support arrangements disappear, and children travel very long distances to remain in local schools to try to maintain a link with the community in the desperate hope that there will one day be a council flat available for them to come back to. Not just in my borough but all over London significant numbers of very young children make very long journeys every morning to keep a place in a primary school.

Is all this avoidable? Yes, I believe it is. I welcome the moves that the Labour party and its Front Benchers have made on changing our attitudes to the private rented sector, the regulation of letting agents, environmental conditions, longevity of tenancies and the ending of the ludicrous charging and deposit scheme that many agencies promote. I suggest that at some point, however, we will have to face the fact that we cannot go on controlling benefit levels but not rent levels, and therefore forcing people who rely on benefits for all or part of their income to move away from the areas where they have traditionally lived and been a very important part of the community.

In introducing a ten-minute rule Bill last Session, I pointed out that London was significantly different from the rest of the country in this respect. Rents are significantly higher and there is a significantly greater churn of people in London than in most other parts of the country. I do not see why we should not involve local government in the solution. After all, local government is the primary housing authority. Why can we not have some form of rent registration and regulation—London-wide—that takes account of the needs and costs of producing and providing housing in London so that we do not lose out on the private rented sector altogether, but can keep our mix of communities?

I would not normally go along with much of what the London chamber of commerce and industry says, but it points out in a briefing note sent to Members for today’s debate that of their members in London

“59% of firms are experiencing a greater pressure to increase wages as a result of higher housing costs…42% of firms believe that higher housing costs are having a detrimental impact on their ability to recruit and retain staff”

and

“33% of firms believe that their employees’ punctuality and/or productivity is being affected by longer commutes as a result of not being able to afford to live in the capital.”

All that is absolutely true. Unless we ensure that there is a sufficient supply of housing for a whole range of people in London or any other big city, we will end up destroying our communities and increasing the pressure on longer and longer commuter rail lines, bus routes and roads, while not actually solving the problem. I hope that we will be able to make some progress on that.

My last point on housing is that my local authority, like others, assertively uses its planning powers to try to ensure planning gain from any private sector development that takes place, as is absolutely right and proper. Hitherto, it has been able to ensure that any new housing development of more than 10 units must include a proportion of affordable housing, including a proportion of social housing. Many developers try to get around that, so the council has levied a surcharge to try to ensure that there is sufficient money for local housing development. Islington has done very well. It has one of the largest council house building programmes in the country, which, ultimately, is the only solution to the housing crisis.

However, the Government came along and changed the regulation on office conversions so that these no longer require planning permission. A developer who buys an office block can therefore convert it into private sector housing without any social housing requirement whatsoever, and no local authority or planning authority has any say in whether the conversion should take place. I can understand the point that some local authorities might oppose the conversion of office blocks into housing to retain jobs, and I think that local authorities should have the right to do that and that local people should have the right to have a say. However, when a large number of office blocks are converted into housing, with the developer making no contribution whatsoever to resolving the local housing crisis, it is time for regulation and for the local authority to have a say in the matter.

For example, Archway tower, near Archway underground station, which was originally built by London Transport in 1967, has been used for a succession of offices, mostly in the public sector, but is now empty. It has been bought by a company called Essential Living, which is converting it into 120 flats for tenants earning somewhere above £80,000 a year, which is far more than anyone earns who works in the area. No contribution whatsoever is being made to the social housing needs of my borough. That is happening all across London; indeed, it will soon happen in cities across the country.

We therefore need regulation, local government input and more council housing, but above all we urgently need tough regulation of the private rented sector so that very many people do not go through the insecurity and indignity of being forced to move out of their community simply because landlords can put up rents to whatever level they like and that they think the market can bear. Surely we must understand that housing is a necessary right for everyone, and that all children deserve to be brought up in a decent, clean and dry household and to attend a local school without the insecurity of moving every six months.

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[Mr Pickles]

We have been very clear that we want an increase in the minimum wage and want to do things to prosecute employers who do not pay it. We want to see people on the ladder. We do not take the Labour view: “You know your place and you’ll never get any better.” We believe that once people get on the employment ladder they will get a better job, move on and get promoted, and then reach a point when they want to put something back into society. There is nothing wrong with the dignity of labour.

[Jeremy Corbyn]

I thank the Secretary of State for giving way. Going back to planning regulation, will he reconsider the question of the lack of planning requirement for the transfer of office accommodation into housing? When a transfer takes place there is no social housing obligation. Does he not realise that it is quite an important issue in areas such as mine?

[Mr Pickles]

It is exactly the same as it is for housing in the rest of the country. We found that placing those numbers created an unnecessary burden nationally. We are happy for local people to come to an agreement on the mix and some minor adjustments have certainly helped, but building 50% of nothing is still nothing.

I can announce today that we will introduce new measures to allow London home owners to rent out their homes on a short-term basis to visitors. Londoners currently have to apply for planning permission from their council, with extra red tape, confusion and cost. Ending that outdated rule from the 1970s will allow Londoners the same freedom that home owners across the rest of the country enjoy. It will not mean that homes will be turned into hotels or hostels, but it will allow hard-working families to earn extra cash when they themselves go away. In our fifth parliamentary year, this Queen’s Speech builds on the foundations we have laid.

The hon. Member for Ynys Môn (Albert Owen), who is not in his place, expressed concern about new homes in Wales. I understand why, because the number of new homes in Labour-run Wales has fallen. House builders have shifted their business across the border to England, because the Welsh Government are so anti-business. The devolved Administration in Wales have hit the housing market with a mountain of red tape and have failed to support home ownership. Some builders have estimated that it costs up to £13,000 more to build a house in Wales than in England. It is a matter of public policy and the regulations hurt business and jobs.

Members do not need to take my word for that, because the Federation of Master Builders has stated that the Welsh Government’s waste plan is “counter-productive” and is

“going to drive the industry further into the doldrums”.

The Home Builders Federation has warned that the cost and regulation of building seem to be increasing:

“For example, proposed change to Part L of building regulations on energy and carbon efficiency could potentially add nearly £20,000 to the build cost of each new home in Wales.”

That is not satisfactory.

Labour Front Benchers will forgive me for saying that two Labour Back Benchers made immensely interesting speeches. The hon. Member for Birmingham, Edgbaston (Ms Stuart) spoke powerfully about Birmingham and Joseph Chamberlain. I cannot help believing that he would have laughed his socks off at her contribution and the idea that he would stand around and wait for the Government to grant some powers. He took the powers and I think that frightened this Chamber enormously and led to a lot of the regulations that pushed down on local government. I think that the general power of competence and the city deals are the future, and local government should grab that opportunity.

In the remaining minutes, I just want to say that the speech of the hon. Member for Sheffield South East (Mr Betts) really reflected the massive importance of housing in any social change. The changes we are attempting to make to get more private money into the private rented sector are about trying to build more resilience. Whether the hon. Gentleman sits on the Opposition or Government Benches, the truth is that there will be no public money for a massive house-building programme. We can only do that by making it attractive for private money to come into the private rented sector. That was our concern about the proposals made by the hon. Gentleman a few weeks ago. My point is that they gave uncertainty in suggesting that they might be a harbinger of Venezuelan rent controls.

I commend the Queen’s Speech to the House.