Concessionary Bus Passes

Lord Spellar Excerpts

Tuesday 8th May 2018 Westminster Hall

[Daniel Zeichner]

I thank my hon. Friend for that intervention. She is very prescient, because the TUC campaign was in the next paragraph of my speech; she has pre-empted it. She is right. Those of us who have done market square campaigning will know that we are not always a magnet for people to come and join us and enthuse, but I find that whenever we speak to older people, they are enthusiastic. I echo my hon. Friend’s congratulations to not only the east midlands TUC but Richard Worrall, who, when the scheme was initiated, set off on a tour of the country and was able to demonstrate that, using his bus pass, he could get round the whole country, which was very exciting. I am told that he is going to do that again, and certainly if he comes through Cambridgeshire I shall be very pleased to join him, although I shall be paying the extortionate fares that we suffer in rural Cambridgeshire—should we be lucky enough to find a bus. I say that because the enthusiasm to which I have referred is tempered by the fact that, in far too many areas, the Government seem to be managing decline rather than celebrating new routes. I will say a little about how that might be addressed, but first I would like to go back to the history of this scheme.

As I look around the Chamber, I see that some of us are old enough to remember that in the ’80s and ’90s pensioner campaigning was central to everything we did. I remember that, as a parliamentary candidate, I was summoned to many vibrant meetings—the pensioners’ organisations had a long list of demands at the time. That was because they compared, strangely enough, our situation in the UK with that in many other European countries and found that our European neighbours often enjoyed a whole series of things that pensioners in our country did not. One success of the post-1997 Labour Government was that they addressed pensioner poverty. I am thinking of measures such as free eye tests, the winter fuel payment and so on, and the bus pass was of course a key part of that.

However, there was not a particularly smooth path to that. We started with quite a panoply of schemes. Some places, such as London, had long had better schemes. Some of the urban areas—I have to say that they were almost always Labour-run areas—had been much more generous in the past. However, in the shires, it was much more of a battle. A kind of halfway house was introduced back in the Transport Act 2000, which gave pensioners half-price fares. That led to quite a lot of even more vexed campaigning.

I remember going to a Labour policy forum in 2004 with colleagues from adjoining counties in the rural east of England—I particularly remember the then leader of Norfolk County Council, Celia Cameron, and Bryony Rudkin from Suffolk. We sat with the then Secretary of State for Transport, Alistair Darling—this was long before he realised he was to become Chancellor of the Exchequer—and explained to him why we thought that a concessionary fares scheme of this type would be not only equitable and fair but hugely popular. I remember the look on Alistair’s face: he said, “Do you know how much that would cost?” That was actually quite a good question because, as I shall explain in a minute, the question of costs has never been properly tied down. His point, of course, was that it would be quite a costly commitment. We went away, having established the idea in principle, but with no great hope that it would necessarily be adopted, so it was with huge joy that we greeted the development a year later. I am not suggesting that it was just we who achieved this; it was a wide range of campaigners, but in the 2005 Labour manifesto a full scheme was suggested, and it was finally implemented in 2006.

The issue of funding is important because, right from the beginning, it has proved to be complicated and difficult. When I was a parliamentary candidate, I spent many a happy hour trying to work out, with my local county councillors and district councillors, who was paying for what and how much it was really costing, and, frankly, coming to the conclusion that probably no one was entirely sure.

We are told that, overall, this scheme now costs £1.17 billion per annum. Not surprisingly, the cost has increased since the scheme was introduced. We are told that, in 2013-14, 9.73 million concessionary travel passes were issued across the country; that puts the average cost at £120 per person. When the scheme was first introduced, the Government provided an extra £350 million for 2006-07 through the formula grant system to fund the cost to local authorities as they then saw it. Between 2008 and 2011, the Department for Transport provided a special grant, totalling just over £650 million, to local authorities to pay for the statutory concession.

Since 2011, however, it is the formula grant that funds the bus pass; money is no longer ring-fenced. Of course, it is a familiar sleight of hand by central Government to apparently put money into the local government grant and tell local government that it has to do this. As the years go by, it becomes less and less clear what the money is for. There is a strong suspicion that it is a sleight of hand, and particularly when councils are being so heavily squeezed, it is asking a lot of them.

Therefore, my first question to the Minister is whether she would like to have a word with the Treasury about looking again at providing proper, ring-fenced funding for the scheme to local authorities. It is not entirely clear to me that the current system of local government finance, particularly with the move away from central Government funding and, supposedly, to business rates retention, actually provides a good, sustainable model for supporting a scheme such as this.

[John Spellar (Warley) (Lab)]

Surely a proper cost-benefit analysis ought to be part of that assessment. In many rural areas, the benefit is that people in smaller, local towns can access services. Most significantly, the benefit is to the health budget, by keeping so many of our pensioners active and engaged. There are lots of studies now on the impact of loneliness on older people. This scheme helps to get people out and about, and maintains their health for much longer.

[Daniel Zeichner]

My right hon. Friend is absolutely right. I will come on to the social and environmental benefits in a minute. This partly shows us how complicated it is to assess the long-term benefits.

Returning to the relationship between central Government and local government, local authorities were charged with coming up with a reimbursement system that left the operator no better or worse off, but they are in a difficult place, and I will come on to the reimbursement system in a minute. The Local Government Association estimates the cost to local authorities at around £760 million a year, with a funding shortfall of £200 million. I suspect that that pressure will only get worse.

The operators are not keen on the system at all. I frequently hear complaints. It is difficult to prove what it costs to carry passengers for free, in a way that observes that reimbursement rule. Putting some extra people on half-empty buses does not necessarily cost more. If there are too many extra people, however, extra services are required.

I understand that the prime task of the bus operators—the big five and many smaller operators—is to return a profit to their shareholders. That is right and proper; that is what they do. They will inevitably claim that this costs rather a lot. In the early days—this was my experience in Cambridgeshire—the bus operators did quite well, because the reimbursement cost they extracted from the county council was rather high. Over time that seems to have settled. As has been said in questions to Ministers, the number of appeals has settled down, which suggests that there is a kind of settlement in all this. I think there is a wider question, however, of how and whether the reimbursement system works.

There is a comparison to be made between London, which has a regulated system, and the rest of the country. Thanks to the Bus Services Act 2017, we hope that some of the new mayoral authorities will adopt franchising. I hope my own in Cambridgeshire does. In London, where you have gross cost franchising, it is much simpler for Transport for London to make decisions about the public good. It decides the fares and the frequency, and then it pays the operator to deliver the service. In a way, the operator has much less to worry about, provided it does not drive up usage and extra costs too far. For London, which groups pay and which do not, and how much is made up by the fare box and how much is raised in others ways, are political choices.

In the rest of the country, it is much less clear. It could be suggested that operators have a perverse incentive to put up fares, because if they know that many of their passengers will be concessionary fare holders, they will be reimbursed for that. We will see whether that gets any response from the operators. The choice over discounts and whether young people should qualify for similar fare schemes is essentially market driven; it is not a choice around social need or the social good. There is a huge opportunity, if we shift to franchising, to move to a much clearer and more efficient model. It may reduce operators’ profits, but if it provides lower fares and space for social choices for the social good, it is worth them paying that price.

I pay tribute to the work being done by the Transport for Quality of Life team, including Lynn Sloman and Ian Taylor, who have begun to look at European systems where, effectively, transport is provided for free across an urban area—it is predominately urban areas at the moment. That is not a novel or unprecedented idea, because many people take the view that public transport—like health, education, policing, parks and museums—is an essential public service that contributes to the fabric of local life. The organisation’s work—often commissioned by my trade union, Unite—shows that this is already happening in 100 towns and cities worldwide, including more than 30 in the United States and 20 in France. Dunkirk, with a population of 200,000, will apparently become fare-free in September. The largest city in the world to have made its public transport free is Tallinn, the capital of Estonia, with a population of 440,000. Free transport was introduced to residents in 2013. It has cost the city €12 million, but it believes that that has been offset by a €14 million increase in municipal revenues, as many more people have moved there, increasing the tax base.

That links to some of the work being done by my colleagues on the Transport Committee about mobility as a service. We are looking at a whole new range of ways of getting around cities. My vision is what I see when I visit an airport. Some airports are like small cities. There are travellators, lifts, shuttle metros and shuttle buses. The noticeable thing is that we do not pay to get on each of them, because it is in the interests of that community to get people where they want to go quickly and efficiently. I argue that is in the interest of all of us, in all our cities and smaller towns, to ensure that people can get around quickly and efficiently.

That is my vision for the future, but to return to the present, extending franchising beyond the mayoralty areas would allow local authorities much more control over services in their areas. It would put them in a much stronger position to maintain stability in funding the national concessionary travel bus scheme. The additional flexibility could also be extended to the community transport sector. That is sometimes a controversial issue, but it is being raised by people in the sector. If we are looking for a flexible mix of transport solutions, particularly in rural areas, I think it should be considered.

My right hon. Friend the Member for Warley (John Spellar) has already raised the social issues involved. Very good work has been done on that by Claire Haigh at Greener Journeys. She demonstrated, in research done a few years ago, that each pound spent on a bus pass generates at least £2.87 in benefits to bus pass users and the wider economy.

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[Daniel Zeichner]

Once again, my hon. Friend is absolutely right. The environmental benefits are really important. I was pleased to see the Minister announce at the UK bus summit the retrofitting proposals, which I was happy to see in the Labour party manifesto last year. It is always good to see the Government adopt such things, and I will have some more suggestions for the Minister in a minute. Alongside that proposal are the very good hydrogen buses that are being developed. I suspect that other Members, like me, have been happy to go and see them. All those things add to my point that the bus is one of the important ways forward in improving the quality of life in our cities, towns and villages.

One extremely good way of promoting buses is by looking at the younger generation, who we are reading about this morning.

[John Spellar]

Just before my hon. Friend moves on, I want to make a point that may lead on to the next part of his speech. Does he share my concern about the Resolution Foundation’s report today that calls for increased taxes and charges on pensioners? It once again raises the concern that many pensioners have that their use of or access to bus passes will be rationed or restricted. I hope he would say that that certainly should not happen, and perhaps give the Minister an opportunity to make it clear on behalf of the Government that they will definitely not be taking any action to change the availability of bus passes for pensioners.

[Daniel Zeichner]

My right hon. Friend is an experienced and skilled operator, and I am sure the Minister will have heard his challenge, which echoed the challenge I laid down at Transport questions the other day. Older generations may have done better—as I indicated, only 20 years ago pensioner poverty was a very real and terrible thing, and because of policy changes it is only recently that people have been less likely to be poor when they are older—but we have to get the balance between generations right. We do not do that by punishing another generation; we do that by finding the resources from other places.

Turning to younger people, who now need to benefit, I want to reiterate something about the scheme in general. Claire Walters, the chief executive of Bus Users UK, recently said:

“Far more people rely on bus services than trains in this country. They are as vital to many people’s lives as gas, electricity and water”.

For many young people, particularly those in rural counties such as mine, getting to college or work is a real challenge. We are not talking about home-school transport today, but the Government would do well to consider that at some point, because there are rumblings in the shires, as they may have noticed last Thursday. Part of the challenge for young people is the cost of travel, including home-school transport.

As my right hon. Friend has just mentioned, the Resolution Foundation report showed the immense squeeze on the younger generation. They have experienced the tightest squeeze on household spending we have known since 2000, and they now consume 15% less than older working-age people on items other than housing. As we know all too well, home ownership is now out of sight for many people who are working, particularly in cities like mine. At the other end of the spectrum, those under 25 face significant restrictions on the amount of benefits they can claim.

I was absolutely delighted by the announcement by Front-Bench hon. Friends a few weeks ago that in future Labour would provide free bus travel in some parts of the country to those under 25. That would reduce the barriers to accessing work and education that so many young people face. The proposal could benefit up to 13 million young people, helping them save up to £1,000 a year. My hon. Friends have suggested that money ring-fenced from vehicle excise duty could be used. In addition to my earlier argument about franchising, with much greater control from local authorities there could well be extra headroom within local funds to help fund such an extension of the scheme.

I can anticipate the reaction from the bus operators. My local Stagecoach bus manager, with whom I have had many detailed conversations about bus franchising over the years, is not shy in coming forward to warn me of the perils of such an approach. I say gently to the operators that while their books remain closed and their finances opaque, it is not unreasonable for those of us interested in the wider public good to wonder whether more savings could not be made. We are told it is an unregulated market, but it is a funny kind of free market when public money accounts for more than 40% of bus operator revenues through local authority contracts, the bus service operators grant, reimbursement for trips made under the concessionary passholders scheme and grants. We therefore have a responsibility to ask whether we are making best use of that public money.

There is a lot of public money going into the bus system. Can we make it work better? I welcome the announcement that the concessionary fare scheme is no longer under review, but as I intimated earlier, I would like a slightly warmer endorsement of the underlying principles and a true enthusiasm for universally available mass public transport systems. Let’s hear it for the bus! Where older people have led the way, let us open the door for young people too. As we do not know when the next general election is coming—it could be a little while yet—will the Minister consider meeting me and the shadow Minister responsible for buses to discuss adopting yet another of Labour’s excellent bus policies? Young people would be as happy with their new bus pass as millions of older citizens have been with theirs over the last decade.

Finance (No. 2) Bill

Lord Spellar Excerpts

Committee: 1st sitting: House of Commons
Monday 18th December 2017 Commons Chamber

[Mel Stride]

There is not an area or region of the country that will not see benefits for first-time buyers. [Hon. Members: “Yes, there is.”] No, I am afraid that that is simply not the case. This measure will benefit first-time buyers in every single region of the country. It is the case that property is a lot more expensive in some parts of the country than in others. Arguably, that is where the particular need is. As I have said, the average house price in London is 12 times average earnings, and it is 10 times average earnings in the south-east.

[John Spellar (Warley) (Lab)]

Can the Minister give us any indication of his Department’s estimate of the cost of this measure and of the incidence—how it falls— in different regions of the country? In other words, how much is it going to cost globally and what other housing could the Government have built with that money? Equally importantly, how much of this will be in the south-east and how much in other regions?

[Mel Stride]

In addition to what I just said about every region seeing benefits, I can tell the right hon. Gentleman that the average benefit for the average first-time buyer will be around £1,700, which is a significant amount. For people purchasing a property at the £300,000 to £500,000 level, the benefit is no less than £5,000, which is a considerable sum.

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[Mel Stride]

As I say, the average across the piece will be £1,700 per average first-time buyer. I also stated quite clearly that, in every region of the country, there will be those who benefit from this measure.

[John Spellar]

I thank the Minister for giving way, but surely his Department must have done an analysis, first, to convince the Treasury of how much this would cost and, secondly, to work out how much this would affect each region—in other words, how much benefit was going to the south-east, how much to London, how much to Yorkshire and how much to the west midlands. Why is he so reluctant to open up about those figures?

[Mel Stride]

What I am able to tell the right hon. Gentleman is that, as I have said, the average benefit will be £1,700 for the average first-time buyer. Every region in the United Kingdom will see benefit from this measure, and those regions—particularly in the south and south-east—where the ratio of salaries required to mortgage levels is particularly high will especially benefit.

However, the other thing we need to do as a Government, as I have already stated, is to make sure we get the supply of housing right. That is why we will be moving from the current level of 200,000 new builds a year up to 300,000 in the middle of the 2020s.

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[Jonathan Reynolds]

We will get on to whether those measures will be effective, based on the assessments that have been made. I am old enough to remember when a tax on land banking was described as Venezuelan-style socialism, so it is good to see some permutation of that idea among Government Members.

The analysis by the OBR on the likely outcome of the policy shows that it will push up prices by 0.3% in 2018.

[John Spellar]

My hon. Friend is talking about land banking by the big house builders. Is not the evidence of that the utterly obscene bonus being paid to the chief executive of Persimmon, which is so outrageous that the chairman of the company has seen fit to resign in disgust?

[Jonathan Reynolds]

My right hon. Friend identifies another feature of a dysfunctional market. That will be corrected only by a change in Government policy, but we have not seen one in the Bill.

Conservative Ministers’ review of a previous stamp duty cut concluded that the tax relief, in itself, had

“not had a significant impact on improving affordability for first time buyers”.

That is why Labour has tabled an amendment calling for the publication of a review prior to the 2018 Budget on the impact of the relief on first-time buyers, including its effect on house prices and the supply of houses.

The Minister, as usual, talked an extremely good game on funding for new housing, which he said would help to ameliorate the supply issue. On further scrutiny, however, we find that no measures in the 2017 Budget will directly increase house building. Only one third of the £44 billion announced in the Budget is genuinely new, and there is no extra Government investment in new affordable homes. That builds on a legacy of failure. Let us remind ourselves that not one of the 200,000 starter homes promised by the Tories three years ago has yet been built. That lack of action is having a serious impact across every part of our society. During the Government’s seven years in power, homelessness has doubled. Shockingly, recent statistics from the Department for Communities and Local Government show that nearly 80,000 households were homeless in September; that includes 120,000 children. The situation is extraordinarily urgent.

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[Mr Kevan Jones]

I agree with the hon. Member for Witney (Robert Courts) and the right hon. Member for Hemel Hempstead (Sir Mike Penning) about the armed forces allowance. In my experience, as in theirs, the modern member of the armed forces, whether male or female, wants choice. I have nothing against that, but I think that this is the wrong way of providing it. As we heard from my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds), the problem now is that much of our military housing stock was locked into what was a terrible deal for the taxpayer during the last year of the Major Government, who sold most of the housing stock in England.

[John Spellar]

May I correct my hon. Friend? In the last few months of the Major Government, Michael Portillo, in a hugely criticised deal at the time, basically gave Nomura the deal of the century.

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[Mr Jones]

I do agree with the hon. Gentleman. Anyone with a close involvement with the armed forces, as he has, will know that we rely on those men and women to go on operations and that a key issue for morale is to ensure that their families are supported during those times.

I am a bit wary about this proposal for another reason. When the Australians introduced this type of rent allowance, they did it gradually, over a 10-year period. There was therefore a transition period with new starts and other people coming in. The proposals in the Bill seem a bit piecemeal, and if they are not done in a thought-out way, we could end up in a situation in which Annington Homes retracts the existing accommodation and people’s options become limited. Again, I think this is the right move forward but it is not being done in the right way. Anything that the Treasury can do to extract the Ministry of Defence from the Annington Homes contract would be universally welcomed—[Interruption.] The right hon. Member for Hemel Hempstead is shaking his head. He has obviously looked the same thing as me. Let us wait and see what the new housing model delivers, but let us hope that it adopts a joined-up approach that will be of benefit to members of our armed forces.

I want to turn now to stamp duty. My right hon. Friend the Member for Warley (John Spellar) asked the Minister which regions would benefit the most from this proposal. The Minister, as usual, sidestepped the answer, but it is in fact quite clear. The average house price in County Durham is £138,000. In London, it is £488,000, so it is quite clear where the money will go. As my hon. Friend the Member for Wirral South (Alison McGovern) said, the Government are completely ignoring the idea of trying to eradicate inequalities throughout the regions. Indeed, they will actually increase them through these moves.

There is a broader point, however. I passionately believe that people who aspire to own their own home should be able to do that, and we should be able to help them to do it. The problem with this Government, however, is that they have one trick in their armoury, which is the idea that the private sector should deliver all this. They believe that the only way to achieve the mythical 300,000 new homes is to allow the private sector to deliver them. Well, I am sorry, but if they are going to rely on the private sector to do that by supplying 300,000 new homes for purchase, that will not deliver the homes that we need in most areas—not just in London but throughout the regions.

[John Spellar]

Does my hon. Friend agree that the underlying problem is that the private sector supply side is becoming increasingly dysfunctional? Indeed, it is becoming an oligopoly, and many of the companies involved are no longer construction companies but just land banks.

[Mr Jones]

They are indeed. My hon. Friend the Member for Ipswich (Sandy Martin) mentioned the example of Persimmon earlier. Many of those companies are no longer housebuilders in the traditional sense. They are employment agents who employ contractors to do things. In my constituency, some of the complaints about new builds are pretty horrendous, and I think that that experience is shared across the House.

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I am not suggesting for one minute that we take houses off people in a draconian way but, where houses are sitting empty on somebody’s books after having been bought in a basket of property—where the houses are not a top priority—we need to give local councils the ability to try to bring them back into use. If it were done in a targeted and effective way, it could increase the housing supply in most areas without building a single extra new house.

[John Spellar]

I start by welcoming the service accommodation proposals. I echo the comments of my hon. Friend the Member for North Durham (Mr Jones) on the short-term gain taken by the Ministry of Defence and the Treasury in a bid to shore up the finances of the Major Government, which did them absolutely no good in the 1997 election. Service personnel and their families have been suffering from the impact of that ever since.

On the basic question of the stamp duty measure, I suppose that it could be welcomed, superficially, as a reversal of the intergenerational transfer of wealth, but in fact, as my hon. Friend the Member for Wirral South (Alison McGovern) said, the reverse is the case, as the main beneficiaries will be the existing owners of housing. In a tight housing market with a large amount of stock and limited flow, the net effect of adding extra liquidity into the system is most likely to be an increase in the price of housing.

The other beneficiaries will be not just individual householders who seek to trade down, or even up, but private sector landlords who have been buying up property and forcing up prices. Many youngsters are not able to get together the sort of deposit that is now required unless they can go to the bank of mum and dad. With the average house price in London at nearly £500,000, they are having to find a deposit of some £50,000. We are targeting a considerable public subsidy towards one small group without actually dealing with the problem.

It was very instructive that the Minister was unable—or probably unwilling—to give the figures I asked for about how much the measure will cost in aggregate and how the costs will break down by region. It is inconceivable that such analysis was not carried out as the policy was drawn up and ground through the mills of the Treasury. To save me from tabling a parliamentary question, I urge the Minister to come up with those figures in his winding-up speech. I think that the figures will show a considerable disparity between regions, which is not uncommon under this Government, much as they seek to hide it. Just recently, a letter from the Secretary of State for Transport told us that we had it all wrong and the average spend on transport was roughly equal between the north and the midlands, and London and the south. The only issue was, as my hon. Friend the Member for North Durham found out, that the Government had omitted to include the £32 billion—I believe that is the figure—for Crossrail from the London figures, because that had somehow been designated as a national scheme.

[Mr Kevan Jones]

I can inform my right hon. Friend that it was actually worse than that, because the Government had also deemed the north as being the north-west, the north-east and Yorkshire.

[John Spellar]

I do not get involved in those arguments.

In essence, we are seeing major transfers of wealth to areas that the Government see as their political homeland. However, let us also look at the big house builders, as they are euphemistically called—really they are land bankers and, as my hon. Friend said, employment agencies. They also indulge in a number of other unsavoury practices. Several of them have now been exposed for their involvement in the racket of escalating leaseholds, which they have now been forced to back down from. They have had to pay considerable sums to buy back those leases from individuals—speculators—who bought them and were then exploiting residents on that basis. Is that not a symptom and a symbol of the dysfunctional nature of our housing market? The Government are not tackling that in any particular way.

Nor are the Government tackling the increasingly oligopolistic nature of the house building industry. There has been a significant decline in medium and small builders, who used to be the backbone of the building industry and of many towns. Building, by its nature, is subject to cycles, and banks have been incredibly reluctant to lend money to small builders, who have steadily either gone out of business, or been absorbed into the big builders. That has flowed into the lack of training that has taken place, because so many of the big house builders are mainly just the name outside a project and are not particularly interested in the small sites—brownfield sites—around our towns. With the breakdown in training, we then have the cry from those same builders that need to bring in more and more builders from abroad because of insufficient supply in this country. That is because over several years, if not decades, they have not been training people.

Nor do the Government have any programme, as far as I can see, that is equivalent to the better homes programme which, as a number of colleagues have said, contributed enormously, not only to bringing many properties back into effective use, but to improving the lives of many of our constituents. Finally, what we see here is figures being plucked out of the air. This is reminiscent not of an efficient market, but very much of Soviet planning, with declarations of 300,000 houses but no visible means by which that will actually be achieved.

[Lloyd Russell-Moyle]

I will try to be brief, because we all want to get to the vote and then move on, but I will say that the measures we are considering are far too little and far too late. Homelessness has doubled in Britain, and in Brighton it has tripled, with 10% of adults now on the housing register. How do these proposals help them? The measures will increase house prices for first-time buyers. I know the Minister says that he has better data than the OBR, but I tend to believe the OBR, which was set up by the Conservative Government to provide independent analysis, over the books that are cooked in the Treasury—[Interruption.] Yes, the books that are cooked in the Treasury. What we need are clear supply-side measures—[Interruption.] The evidence for cooked books is that the OBR does not believe the Government’s figures. The evidence comes from the independent regulator. Let me get back to what I want to say, otherwise I will be distracted and we will be here for longer.

We clearly have a problem with young people and first-time buyers getting into the property market. In my constituency today, only five studio flats are on the market for less than £200,000. With average earnings in Brighton lower than the average for the rest of Britain, the introduction of a stamp duty waiver will make not one jot of difference, because people cannot afford to raise money for a deposit and to go to banks to ask them to lend. What we really need is decent social and council housing so that people can move into secure tenancies. I asked the Prime Minister whether she would lift the housing revenue account cap. We see in the Bill that there will be a lift to the value of £1 billion, if councils apply, but of course £22 billion would be made available, at no direct cost to the Government, if they just lifted the cap completely. Why will they not? Because they are scared—they are chicken—to allow working people to have decent homes. Clearly they want to keep people subjugated and in poor-quality rented private property. That is the only conclusion I can draw from their miserable set of proposals.

Another thing we need is planning regulation that is stronger, not weaker. Until very recently, I sat on my local council’s planning committee. Time and again we were toothless in enforcing the social and affordable housing requirements. We do not need to give councils less power to enforce those requirements; we need to give them more powers to enforce them. The measures in the Bill to try to deregulate the planning sector go in completely the opposite direction.

I could make other points, but I am not going to talk anymore—let us go home. It is quite clear that I will be voting against the Government’s measures, because they are absolutely useless for dealing with homelessness and house building. In fact, they will make matters worse.

Public Sector Pay

Lord Spellar Excerpts

Monday 4th December 2017 Westminster Hall

[Helen Jones]

My hon. Friend is absolutely right. Gratitude for public sector workers is not enough; they also deserve our respect. Respect involves paying them a decent wage for the job they do but, sadly, under this Government their wages have been continually held down.

[John Spellar (Warley) (Lab)]

Many of the arguments my hon. Friend has made up to now would have been recognised and endorsed by traditional Conservatives. Is it not unfortunate that, having imported the anti-state ideology from the US Republicans, they now see the state and public service as the enemy rather than a key part of the mixed economy?

[Helen Jones]

I could not have put it better myself. The result was that one of the Conservative Government’s first actions was to announce a two-year freeze on public sector pay from 2011-12. They followed that up with an announcement that public sector pay would be capped at 1% for the following four years and, in his 2015 summer Budget, the Chancellor announced a further four years of the cap, saying that he would fund public sector workforces for a pay award of 1%. That did not mean, of course, that everyone would get even 1%: a letter from the right hon. Member for Chelsea and Fulham (Greg Hands), then a Treasury Minister, made it clear that the money was first to be used—as if—to address recruitment and retention pressures in the system: “there should not be an expectation that every worker will receive a 1% award”. What that meant, of course, was that those people in areas where there were retention pressures received less, and those in areas where there were many people on the minimum wage—46,000 in local government alone—who had rightly to receive a pay rise, received less. Even if a public sector worker got the 1% pay rise, their wages were still declining in real terms. A public sector worker on the median income who had their pay determined by the pay cap would, by 2016, have lost £3,875 in real terms. Real-terms losses of between £2,000 and £3,000 are common throughout the public sector.

A midwife on band 6 will have seen a real-terms decline in her wages of 12.1%. Midwives are leaving the profession at a previously unseen rate. They are leaving the register in serious numbers. A teacher outside London will have lost 10.4% and a band 5 nurse will have lost 11.9%. If the pay cap continues until 2020, there will be a further real-terms decline in wages. A social worker will lose £3,533. A border guard—I thought the Government wanted to secure our borders—will lose £2,520. A firefighter will lose £2,766. The reason for those falls is not hard to find: while wages have been stagnant or hardly rising at all, prices have been rising at a much faster rate.

Beer Duty

Lord Spellar Excerpts

Tuesday 7th March 2017 Westminster Hall

[Steve Double]

My hon. Friend is absolutely right. Whereas many other industries are centralised in very specific areas or regions of our country, the pub industry is spread right across it and provides much needed jobs in many of the more rural areas. He is also right that we need to reduce the gap between the duty we pay in this country and the duty paid in many other countries, and I will come on to that later.

[Mr John Spellar (Warley) (Lab)]

The hon. Gentleman rightly identifies the role of rural pubs, many of which serve those who come out to the countryside from our conurbations. What impact does he think the ill-thought-out proposals from the Local Government Association to cut the number from 2 pints or 1.5 pints to 1 pint will have on those pubs?

[Steve Double]

I assume the right hon. Gentleman is talking about the guidelines for alcohol consumption. I suspect that is a subject for another day, but I understand his point.

[Mr Spellar]

No, I am not talking about the guidelines; I am talking about the drink-drive limit. Most of the offences are recorded at the much higher level of about 150 mg. A reduction in the limit could have a dramatic effect on many rural pubs, let alone rugby clubs, Royal British Legion clubs and so on.

[Steve Double]

I now understand the point the right hon. Gentleman is making. I would never drink and drive at all. That attitude has become much more the norm in today’s society, where most people consider that drinking anything and driving should be avoided. I am not entirely sure that I agree with his point.

The brewing and pub industry not only employs 900,000 people but attracts many younger people to its workforce—in fact, 46% of those employed in the sector are under 25 years old. That level of employment among the young is a critical factor, especially in rural constituencies such as the one I represent in Cornwall. While many start out in basic roles, they go on to become professionals in the trade or elsewhere—for example, working as chefs, licensees or successful businesspeople in their own right, and employing others.

That said, the news has not always been good in recent times. Some 17,000 pubs have closed in the past three decades, and while the closure trend has slowed markedly of late, many communities will grieve the loss of their local, which all too often is the only pub in the area.

--- Later in debate ---

[Steve Double]

My hon. Friend may have been reading my notes, because that is a point I will come on to highlight.

There are many reasons why pubs have closed. Some of them were badly managed, and some lacked investment to keep the facilities up to date. Although I believe that the smoking ban was the right thing to do, and it is popular among many pub goers, we have to acknowledge that it stopped smokers visiting the pub quite so often. There are also changing social habits, with more people drinking at home as a result of cheap alcohol available in supermarkets and other outlets.

Those factors have all contributed, but it is also undeniable that the dreadful and despised beer duty escalator introduced in 2008 had a devastating effect on the industry. Annual duty rises under the escalator led to beer duties rising to among some of the highest anywhere. Even now, following successive years of duty reduction by this Conservative Government, our pints remain heavily taxed at around 52p on a 5% alcohol by volume pint, compared with 4p in other key beer-brewing nations such as Germany and Spain—an enormous and disproportionate difference that needs to be addressed.

There is much more happening now, with a revolution in the old craft of brewing and selling beer to the UK’s 32 million beer drinkers. Numerous microbreweries have opened up and craft beer and real ale are rising in popularity. I have the great privilege of having a great example of a local family-run brewery in my constituency. St Austell Brewery has been a roaring success in recent years, particularly since the launch of its excellent Tribute ale. It now makes many excellent beers, and I spent an enjoyable day during the recent recess assisting master brewer Roger Ryman in making a batch of Proper Job. I count the fact that I managed to make more than I drank that day as a notable success.

While it is right to recognise concerns about alcohol abuse, we must note that the majority of people enjoy healthy levels of drinking. Given the social benefits that come with a visit to the local pub, it makes no more sense to celebrate pub closures than it does to close roads because some motorists speed.

[Mr Spellar]

On the subject of craft breweries, will the hon. Gentleman, who rightly attacks the beer duty escalator, acknowledge the very considerable role played by the duty exemption for small breweries that are getting off the ground? That was a major factor in the explosion of the craft brewery business and was introduced by my right hon. Friend the Member for Wentworth and Dearne (John Healey) when he was at the Treasury.

[Steve Double]

I will happily agree. The support given to microbreweries to develop right across the country—they are now producing very high-quality, excellent craft beer—is a success that should be noted.

Outsourcing and Tax Credits

Lord Spellar Excerpts

Friday 4th November 2016 Commons Chamber

[Simon Kirby]

I am not aware whether there were or not, given that I am a Minister who is relatively new to the Treasury and given that I am dealing with a subject that is not in my portfolio, but I am sure that I can write to the hon. Gentleman clarifying the position.

I pay tribute to the hard-working staff in HMRC, who have helped to resolve what was a very difficult situation. HMRC took back 181,000 cases, and the staff have done a brilliant job, extending the helpline hours and specifically helping MPs. We should all be grateful for that.

[Mr John Spellar (Warley) (Lab)]

It is no wonder that the Chancellor is not here today to respond to the urgent question. We have heard an announcement of no change in policy: in other words, “Do not adjust your mind, reality is at fault.” Apart from the structural weaknesses of this and so many other contracts, time and again we are seeing Ministers and Departments failing to monitor contracts, and failing to react and respond when those failures are pointed out. Once again, we are hearing the same lame old excuse: “Lessons will be learnt.” I ask the Minister, “When will they ever learn?” For a start, will Concentrix be barred from tendering for any future contracts with the Government?

[Simon Kirby]

The right hon. Gentleman speaks of a failure to respond; the Government responded very quickly, which is why we are in this position, having cleared up the mess that we found. He asks when we will learn our lessons; we have learnt lessons, which is why the Concentrix contract is coming to an end. We shall all have to wait for the independent report from the National Audit Office, and there will be further lessons to be learned, but the Government have taken this matter very seriously and have acted quickly, and I think that we have done reasonably well in the circumstances.

--- Later in debate ---

[Simon Kirby]

I understand that the independent National Audit Office will be looking at all those and will report in due course—let us hope that it does so sooner rather than later—and we will learn lessons from that independent report.

[Mr John Spellar (Warley) (Lab)]

On a point of order, Mr Deputy Speaker. In the age of emojis, is there any way in which Hansard will be able to report the look on the Minister’s face when he responded to the question asked by the hon. Member for Manchester, Withington (Jeff Smith)? It said it all.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Absolutely not.

Finance (No. 2) Bill

Lord Spellar Excerpts

Wednesday 25th March 2015 Commons Chamber

[Mr Deputy Speaker]

It was a business motion that was agreed yesterday, but not the terminology, I presume. Mr Speaker is not in the Chair so I do not know when he was told. I was told about five minutes ago when I came into the Chair. [Interruption.] No, that is correct. There is a business motion. [Interruption.] Mr Doughty, we are trying to deal with this. We have many other points of order on that matter.

[Mr John Spellar (Warley) (Lab)]

Further to that point of order, Mr Deputy Speaker. We have had some slightly strange events on the Budget, with Ministers speaking from the Government Dispatch Box—from the Treasury Bench—but speaking for their parties. My understanding is that the Government speak from there—the Government Benches. May we be clear? Is the motion a Government motion, which has therefore been signed off by the coalition partners, or is it a motion from the Conservative party?

Oral Answers to Questions

Lord Spellar Excerpts

Tuesday 4th November 2014 Commons Chamber

[Danny Alexander]

I agree with my hon. Friend that strong tax receipts require a strong economy, and the focus of this Government’s economic policy since the coalition was formed has been to rebuild the UK economy and clear up the mess left to us by the Labour party. We now have the strongest growth in the major world economies, and Government Members should be very proud of that.

[Mr John Spellar (Warley) (Lab)]

Revenue officials have always been slow to catch up with the latest tax-avoidance scams in the construction industry, the latest of which is the umbrella company. Such companies are costing the Revenue huge sums and are exploiting workers. This is spreading rapidly to other sectors, including supply teaching. What is the Minister going to do about the scandal of umbrella companies?

[Danny Alexander]

We introduced measures precisely to deal with intermediary companies, which are often vehicles for tax avoidance or for minimising tax. We take that very seriously. If the right hon. Gentleman has evidence that he wishes to bring to my attention of specific issues that have come to his attention, I would gladly look at it.

Finance (No. 3) Bill

Lord Spellar Excerpts

Tuesday 3rd May 2011 Commons Chamber

[Kerry McCarthy]

The backdrop to today’s debate is an economy that is flat-lining, as the Chief Secretary to the Treasury admitted last week. Since the Chancellor’s spending review, we have had no economic growth, and it is ordinary people who are hardest hit by that stagnation, with 2.5 million people out of work, including nearly 1 million young people—one in five 16 to 24-year-olds. An increasing number of people have been jobless for more than a year—nearly 850,000 and rising. This year, as the Government’s cuts start to bite, hundreds of thousands more people could lose their jobs. I believe that that is what the Minister of State at the Cabinet Office called an

“immediate national crisis in the form of less growth and jobs than we need.”

Apparently, it is what the Chancellor describes as “good news” and a sign that the economy is on the right track. Families are feeling the effects of the crisis in their pockets. Prices are still rising by more than 5% on the retail prices index, while earnings are growing at just 2% a year.

Rising fuel prices are a big part of this squeeze. According to the Office for National Statistics, fuel prices are currently one of the most significant contributors to consumer price inflation. According to this week’s figures from the Department of Energy and Climate Change, the average UK pump price is now £1.36 for a litre of petrol and £1.42 for a litre of diesel. I am sure that many Members will be aware that at their local petrol pumps prices are even higher. That means that petrol is more than 3p a litre more expensive than it was last month, or 15p more than this time last year, and that diesel is 3p more expensive than last month, or nearly 20p more than last year. Unfortunately, the 1p saving we got from the Chancellor’s cut in fuel duty lasted barely a week before price rises at the pumps wiped it out.

[Mr John Spellar (Warley) (Lab)]

My hon. Friend rightly draws attention to fuel prices. Does she not find it extraordinary that the coalition Government are proposing to subsidise fuel prices in some of their friends’ constituencies, thereby increasing by default the duty on those in many of the urban constituencies that we represent?

[Kerry McCarthy]

My right hon. Friend is quite right that the Government are looking for a derogation in some rural areas, but only a very limited number. When the House last discussed the proposal, considerable representations were made by Government Members who argued that if there was to be a derogation, other areas should also benefit from it and that it was unfair that just a few remote islands should see the benefit.