Housing
Debate between Marcus Jones and Hilary Benn(10 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text
Hilary Benn
The hon. Gentleman makes a perfectly fair point. As he knows, the housing market varies enormously between different parts of the country. In the city that he and I have the privilege of representing, the council’s assessment—which is supported by all the parties—is that we will need roughly 70,000 new homes in the next 15 years. That is a question of supply.
Hilary Benn
I have given way a great deal. I want to make some progress, because lots of people want to speak.
Let us look at the situation in London. Here, we see new blocks being built and marketed to foreign investors, making it much more difficult for Londoners and others to get a chance to buy those homes. The shadow Housing Minister, my hon. Friend the Member for Wolverhampton North East (Emma Reynolds), has said that that is wrong and called for action to require such homes to be marketed to Londoners and others who live in this country first, rather than being sold off-plan to investors abroad.
Hilary Benn
I want to make some progress.
In the capital, about 50,000 homes are now sitting empty. That is why Labour would allow councils to double the council tax on empty properties. We would also deal with the loophole that allows overseas owners to claim that a property is their second home, simply because they have put a table and chair in it.
I asked the Secretary of State a specific question last March about whether foreign buyers would be able to benefit from the Help to Buy scheme, and his reply could not have been clearer:
“This scheme will not be available for foreign buyers; this is a scheme to help people from this country.”—[Official Report, 25 March 2013; Vol. 560, c. 1311.]
Will he confirm for the record that EU nationals who have come to the UK will not be eligible for assistance from the Help to Buy scheme? I will give way to him to allow him to answer. I notice that he does not wish to intervene. Perhaps a nod would do. This is the third time I have asked him about foreign buyers in relation to the Help to Buy scheme, and it is the third time he has been unable or unwilling to give me an answer.
Hilary Benn
I am going to make some progress.
When Kate Barker carried out her review of the housing market a decade ago she found two factors that we need to consider. First, she said that
“limited land supply means the competition tends to be focused on land acquisition rather than on consumers”.
Secondly, she found that
“many housebuilders ‘trickle out’ houses…to protect themselves against price volatility”.
[Interruption.] Hon. Members say that that was a decade ago, but it is still going on. Roughly translated, it means that not all house builders have an incentive to build all the homes for which they have planning permission as quickly as possible or as quickly as the nation needs them to. That is a problem, and we have proposed a way of dealing with it. Even when times were good, when mortgage credit was readily available and house prices were booming, the house building industry was unable to build the number of homes required.
Mr Marcus Jones
The right hon. Gentleman mentioned the previous housing boom in 2006-07. Will he explain why the number of first-time buyers fell to its lowest level on record at that time, and why, following the moves made by the present Government, we are seeing the strongest growth in first-time buyer numbers for more than a decade?
Hilary Benn
As the hon. Gentleman is well aware, there was a very difficult period—[Interruption.] No, there was a collapse in the global economy. It is no good the hon. Member for Rossendale and Darwen shaking his head. The problems that we experienced in the United Kingdom were caused in particular by problems in the housing market in the United States of America. That is why we should be concerned by the threat of a housing bubble returning to the United Kingdom.
One of the answers must be to get more people building houses. [Interruption.] I am glad to see the hon. Member for Rossendale and Darwen nodding in agreement. Forty or 50 years ago, two thirds of the houses in this country were built by small and medium-sized builders. [Interruption.] The hon. Gentleman can carry on nodding; that is fine. I am grateful for his support. Nowadays, the figure is only one third, and when we talk to small and medium-sized builders about the problems they face, they mention two things: the difficulty of getting access to land and the difficulty in obtaining finance. Something needs to be done about both.
Local Government Finance Bill
Debate between Marcus Jones and Hilary Benn(12 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text
Hilary Benn
First of all, if we are talking about centralisation, the hon. Gentleman needs to think about who nationalised business rates. It was his party. Who was it who abolished London-wide government and who made a mess of the poll tax? In all honesty, I say that making a change in haste in the wrong way is done at one’s peril. The warning of that is provided in the poll tax. If we look back at the debates when the poll tax was being argued for, we find Ministers arguing that this was the most wonderful thing. The people who have really made a mess of local government financing in this country are the Conservatives. Local government would much prefer to have the resources they had under the 13 years of the Labour Government than what they are experiencing under the current Government.
The point is this. It is not about whether we trust local councils or local communities. The question people looking at this Bill will be asking themselves—and, to judge by the consultation, they are—is whether they trust this Government and whether they trust this Secretary of State to use all these powers in a fair way. To judge by what has been done so far, there is not much room for confidence. We know that this Bill is being introduced at a time when local authorities are facing unprecedented cuts. Cuts do have to be made—[Interruption.] Well, I have said that on a number of occasions, but there is no excuse, no rationale and, so far, no justification for why these cuts are being applied in such an unfair way to communities.
As the House knows, one shocking statistic from SIGOMA—special interest group of municipal authorities —tells us everything we need to know about this Government’s idea of fairness. It is the fact that the 10% most deprived upper-tier authorities are facing a reduction in their spending power that is nearly four times greater than that faced by the 10% least deprived authorities.
Let us take just one example from figures produced by Newcastle city council. For every local authority, it looked at the cuts for 2010-11, 2011-12, 2012-13, transition and council tax freeze grant and the provisional new homes bonus allocations. The figures show that Basingstoke and Deane authority will see a cumulative gain of £6.30 per person, whereas Knowsley will see a cumulative loss of £227.35 per person. If that is not balancing the books on the backs of the poor, I do not know what is. What possible justification can there be for such unfairness? When I asked the right hon. Gentleman about it at Communities and Local Government questions recently, all he could do was bluster, so how can councils have any confidence that they are going to be treated fairly under the Bill, particularly for communities where there is a great deal of deprivation, communities with fewer opportunities for business rate growth and communities where a lot of people cannot find a job?
Mr Marcus Jones (Nuneaton) (Con)
The right hon. Gentleman extols the virtues and fairness that there seem to be have been in the local government finance regime during the period of the Labour Government. Can he explain, then, why the gap between rich and poor widened during those 13 years?
Hilary Benn
That is not true in relation to local authorities such as my authority. For example, the number of children in poverty across the country was reduced by 600,000, while this Government is in the process of increasing child poverty, as the hon. Gentleman knows, so I am not taking any lectures from him about how to tackle inequality and unfairness.
The truth is that councils are worried that under this Bill, as SIGOMA warns,
“the gap between more prosperous and less well-off authorities will widen as a result of the policy”.
Local Government Yorkshire and Humber fears that
“the Government’s proposals are...likely to favour urban over rural areas and retail development over manufacturing growth…we could easily lose out.”
Those are the concerns that the Secretary of State must address.
Let me deal with the second argument we have heard—that the changes will incentivise economic development. Here, I have a request for the Secretary of State. It would be really helpful if he could clear up the confusion he has created about the Government’s view on whether local authorities want to see economic growth in their areas.
I ask that because in paragraph 1.16 of his Department’s response to the consultation on business rate retention, it says:
“We know that local authorities are keen to grow their local economies.”
I agree with that, which is exactly what councils up and down the country want and seek. So can the right hon. Gentleman explain why the impact assessment published by his Department at the very same time on the very same day says the very opposite—that
“local authorities are generally reluctant to....promote economic growth”?
These are two completely contradictory statements—
“keen to grow their local economies”
in one document, and
“reluctant to promote economic growth”
in the other. They cannot both be true, so which one represents the Government’s view? I am happy to give way to the Secretary of State for him to explain. Well, there is no answer. It would be helpful if documents were read a bit more carefully before they were published.
On the question of incentives, I note that business rate localisation—the term that used to be used—has now become business rate retention. No doubt that is because it has become clear that the Government will take a proportion of business rate income in the form of the central share payment. In effect, it will allow the Government to top-slice such income and, as the Secretary of State has said, to control local government spending.
Before anyone on the Government Benches says that all that money will be returned to local government, the House needs to be aware that although that sounds good, the money is of course fungible across Government. Using that income from retained business rates to pay for other grants to local government will, in effect, create a saving for the Government because it will relieve the Treasury of having to find the money from elsewhere. So, in effect, we have set-aside by another name and in another form.
We do not yet know what size of share the Government intend to take either in the first year or in subsequent years. Nor has any promise been made—I did not hear it tonight—that the share will not change from year to year. It is, in the words of the Local Government Association, one of the many detailed points that “remain unresolved”. As this is, in the main, an enabling Bill, we will not see that detail until later.
Thirdly, I turn to the question of fairness. The Secretary of State is on record as saying:
“we will ensure that no one will be worse off when the new system is introduced than they would have been under the old system.”—[Official Report, 18 July 2011; Vol. 531, c. 663.]
That sounds reassuring, but it is only valid for twelve months. What about years 2, 3 and 5? Can the Secretary of State guarantee that no council will be worse off then as a result of the change he wants the House to bring in? These are really important assurances, for which councils are still looking. As the Secretary of State’s colleague Sir Merrick Cockell, chairman of the LGA, put it:
“Reform must…ensure that those areas that do not have the capacity to raise huge amounts of funding through business rates do not lose out.”
SIGOMA has asked why Ministers have decided not to restore resource equalisation to its 2010-11 cash level, which could have been used as a baseline for future grant allocation.
What guarantee has been given to councils that the tariff and top-up mechanism will produce a fair result, especially given the coalition’s track record? Why do the Government think—or, to be strictly accurate, have the “aspiration”—that resets should happen only every 10 years? We think that they should be more frequent, as do most of those who responded to the consultation.
What about the circumstances, which were mentioned earlier, in which councils lose a major employer, and hence business rate income? That is a very serious matter. How quickly will such councils be given help, how much help will they be given, and how long will it last?
What about the perverse incentives in the business rate system that encourage retail units and gyms more than manufacturing, and encourage warehouses employing few staff more than factories employing a large number of workers?
Then there is the levy mechanism. Last July the Secretary of State told the House:
“There will be no cap on the amount of business growth from which such councils can benefit. A council will be better off as a result of growth”. —[Official Report, 18 July 2011; Vol. 531, c. 663.]
Yet the Bill gives the Secretary of State power to decide how much of any growth in business rate income a council can keep. He alone will decide what constitutes a disproportionate benefit. That is the reverse of the localisation that he promised. The retention of business rates is clearly not all that it seems.
If the purpose of the levy is only to fund safety nets—and that is not clear—why does paragraph 28(1) of schedule 1 make it possible for only part of any surplus balance in the levy account to be given back to one or more local authorities? Does that mean that, in effect, a second top-slicing mechanism is being created by the back door?
All that makes it clear that no one can say at this stage what the incentive from keeping some business rate income growth will be. That is why London Councils said, in its briefing on the Bill,
“'the business rate incentive is uncertain and unpredictable”.
What is more, in some cases there could actually be a disincentive. Under the current system, if a council decides to engage in a big redevelopment and regeneration scheme in the centre of its town or city, such as rebuilding that centre, the loss of business rates for an extended period is not a problem, because it does not affect the resources that the council receives. Under the Bill, however, it could well be a problem. It may cause the council to conclude that it is not sure whether it wishes to proceed with the scheme, although the Bill is supposed to be all about encouraging growth.
Let me now deal with the other main part of the Bill, which concerns council tax benefit localisation. It constitutes a step backwards towards a time when different areas gave different help to people in need. The big question is this: why are the Government making this change, and why, if they are determined to do so, have they not linked it to universal credit, as was suggested by many people in the consultation? The fact that they have not done that will lead to a great deal of confusion.
Rent is one cost that people face in order to live somewhere, and council tax is another. In the first case there will continue to be a national scheme to provide help; in the other the national scheme is to be abolished, and councils will be left to decide what benefit should be provided. However, the Government intend to legislate to protect certain council tax payers, while at the same time imposing a 10% cut in the amount that goes to local government to meet the cost of paying the benefit. In areas where there is a lot of need—for different authorities have different needs and different circumstances —that will constitute an additional cut on top of the existing reduction in local authority resourcing of over 19% in the last two years.
Because the Bill will rightly give continuing protection to pensioners, it is inevitable that, unless councils try to reduce benefit for those who are out of work, people who work but are on low incomes will be hit the hardest. Indeed, that is what the Government’s own impact assessment says. The House of Commons Scrutiny Unit has made an estimate of the impact of the 10% cut with protection for pensioners which suggests that non-pensioners—people of working age, whether working or not—will face an average cut of 16% in their council tax benefit support. Of course, in areas where the number of pensioners is higher than average, the cuts facing everyone else will be even bigger.
The New Policy Institute, which has also looked into the effects of the cut, has found that five of the 10 hardest-hit local authorities are among the top 10 most deprived areas, according to the 2007 indices of multiple deprivation: Hackney, Newham, Liverpool, Islington and Knowsley. Meanwhile, according to the same indices, the two least affected areas, Hart and Wokingham, are also the two least deprived. Does that sound familiar? Of course it does. Once again, cuts are being imposed unfairly by the coalition Government. Moreover, the Government’s policy is completely incoherent. The Department for Work and Pensions says, “Hey! We want to make work pay!” but here is a policy that will end up doing the very opposite.
The Secretary of State has a completely inconsistent attitude when it comes to protecting people from council tax increases. When he announced the council tax freeze in March last year, he declared resoundingly:
“we are determined to protect hard-working families...This is about giving real and immediate help to families struggling with the daily cost of living.”
Yet here he is now, proposing a policy that will result in a significant increase in council tax bills for some people, particularly those who work and try to do the right thing, but are on low incomes. Those are the people who he said, less than a year ago, that he was determined to protect, but now he wants us to vote for a measure that could, in some instances, wipe out all the benefit of the council tax freeze. Furthermore, the cuts are being introduced at the very moment when more people are going to need help with their council tax bills. Why? Because unemployment is rising. Why do we know that? Because the Chancellor has told us so.
Costs could also rise because of increased take-up. What account have the Government taken of that—and what about higher unemployment? How are councils expected to cope with that? Given that they will possibly end up designing different schemes, there is a risk that people will decide to move from one council area to another because of the different levels of council tax benefit. And what about the collection costs? As the Conservatives learnt when they introduced the poll tax, when councils start trying to collect money from people who do not have a lot of money, they have a problem. People who are poor must make decisions about what bills to pay, and in what order. What assessment have the Government made of the practicality of collecting the money? What about all the other benefit changes that will affect the same group of people at exactly the same time? I hope that the Secretary of State realises that that when a lot of people discover that they are being hit with increases in their council tax—for that is what his Bill does—there will be a great many appeals. How much will that cost?
Finally, there is the timetable for the implementation of the change. The decision to implement it from April next year was widely criticised by respondents to the consultation, and the Select Committee on Communities and Local Government has called for a delay to allow councils time to put their schemes, software and administration in place.
We do not support this change, just as we do not support the Bill. It does not pass the tests of fairness, incentive, certainty, and helping councils to meet local need. It does nothing to deal with the unfair way in which the Government have imposed the largest cuts on the least well-off communities. The Secretary of State claims to be the great champion of localism, but he has presented the House with a Bill that gives him all the power to determine what happens, including the power to take and keep a top slice of business rates. No wonder the LGA said in its briefing for today’s debate:
“That is not a localising policy and goes against the Government’s stated commitment to localism.”
Say one thing and do another: that is the story of this coalition, and that is why the right thing to do is to reject this Bill.
National Planning Policy Framework
Debate between Marcus Jones and Hilary Benn(12 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Hilary Benn
The planning policy that we all inherited had great strengths and evolved over time. My concern is that, as was argued by others during the consultations, in reducing the amount of guidance, we might end up not with greater clarity, but with greater uncertainty. In the end, all words will be argued over by developers, considered by local authorities and ultimately determined by the courts.
Mr Marcus Jones (Nuneaton) (Con)
The right hon. Gentleman seems to be indicating that he favours the previous Labour Government’s approach of the regional spatial strategy. Is that Labour party policy?
Hilary Benn
I am interested that the hon. Gentleman reads that into my remarks. I shall say something about that in a moment. The RSS had its strengths but also its weaknesses, and we have to be perfectly honest about that.
Hilary Benn
The NPPF says that in the absence of such a plan there should be a presumption in favour of sustainable development, but regardless of whether there is a local plan, someone must still decide about what constitutes sustainable development.
The second issue I want to address is the choice of land for development. There are many competing pressures, and we want to protect as much green space as possible. That point was made eloquently in this week’s Westminster Hall debate initiated by the hon. Member for Broxtowe (Anna Soubry).
Because of our heritage, we have a lot of previously developed brownfield land and, building on the foundations laid by a previous Conservative Government, Lord Prescott created the “brownfield first” policy. It was very successful. Last year, 76% of new dwellings were built on brownfield sites, up from 55% in 1989. We need only look at the centre of cities like Leeds and Manchester to see that it is working, or consider that in the last decade the proportion of new homes built on the green belt fell from 4% to 2%. It is estimated that there are almost 62,000 hectares of brownfield land in England that are ready for building on, which would be enough to build about 1.2 million homes.
The Minister appears to argue that a
“land with the least environmental or amenity value”
approach is the same as this “brownfield first” policy. If that is the case, why change it? If it is not the case, then we can understand why people are worried. Indeed, the Government’s own impact assessment refers to
“removing the target and the priority for brownfield development”.
Hilary Benn
I have given way to the hon. Gentleman before, and I want to make some progress.
I cannot understand why the Government wish to get rid of the “brownfield first” policy. It is simply wrong to let undeveloped land, including greenfield sites, be used while old buildings and previously developed land in our towns and cities are available. I hope the Government will reinstate that policy.
Another reason why the removal of this policy has caused so much concern is the worry that green belt and other green land will be put under greater pressure as a result. The Minister has denied that, but that confidence is not shared by others. Existing planning policy—planning policy statement 4—states that:
“Local planning authorities should ensure that the countryside is protected for the sake of its intrinsic character and beauty”.
There is also a presumption against inappropriate development in the green belt. I hope that both those points will be fully reflected in the revised draft. That would, after all, be consistent with what the Minister said today about the Government’s natural environment White Paper and the value of nature.
I ask the Minister to address the following questions. Has he seen the CPRE’s legal opinion, which argues that the new formulation of words may weaken green belt protection? I accept that the legal argument is quite technical, but it makes the point about uncertainty and it deserves an answer.