Housing and Planning Bill

Debate between Mark Field and Clive Betts

Tuesday 12th January 2016 Commons Chamber

[Mark Field]

It is not absolutely worthless, although I echo the comments made earlier on that issue, and hope that the Minister—as well as accepting amendment 112, to which I was a co-signatory—will indicate that as far as possible the Government will wisely consider the legal terms and the wording of the amendment. The wording does not guarantee that the proceeds of any sales will be retained in London; it simply governs the terms of agreements that the Government might choose to make to that effect. It would be helpful to have something on the record about the strength of the commitment to ensure that there is replacement building in the capital, but I will leave that to the Minister.

It is fair to say that plans to allow housing association tenants the right to buy their homes came as a bit of a rabbit out of a hat before May’s general election. I appreciate and agree with the general aspiration to roll out home ownership to as many people as possible, but I worry that forced sales will deplete stock, and that once a windfall has been pocketed the property concerned will simply be rented out to a high earner. That is what has happened in many housing estates in my constituency, where the second or third buyer after a sale under the right to buy has been—dare I say it?—a well-paid yuppie.

[Mr Betts]

rose—

[Mark Field]

I will not take any more interventions because I know that other Members want to speak.

On a philosophical level, I confess that I am uneasy about the principle of the forced sale of properties that have been built or bought with private, philanthropic donations, and without Government grant. In the case of Peabody—a major social housing provider in my constituency—that approach risks disregarding the intention with which the founder, George Peabody, made his original charitable endowment in the late 1800s, when 10,772 Peabody homes were built without Government grant in my constituency and slightly beyond. I accept that we crossed the Rubicon on that with leasehold reform legislation over the past 30 years, but I worry about the precedents we are setting. It has already been mooted by Opposition Members that buy-to-let landlords should be forced to sell their homes to tenants. I think that would be entirely wrong, but it would probably be the extension of what is proposed.

That touches upon the inherent “fairness” of this policy. Had the Secretary of State been here, I would have taken him on a walk down memory lane. He was a former councillor in my constituency and the Warwick ward of Pimlico, and I walked through that area two or three weeks before the general election, canvassing the stucco-fronted homes of Cumberland Street. On one side, tenants of London and Quadrant pay perhaps £100 per week rent for their flats, whereas on the other side, in almost identical properties, private renters—I accept that this is a hotspot of central London—are paying £350 per week. Already those tenants are in a financially disadvantageous position, yet the former group will get a discount on the purchase price of their properties, and will potentially be able to rent them out further down the line. I question the fairness of giving such huge advantages to those already in secure housing, yet giving no advantage to those in the private rented sector whose voice is perhaps not heard as loudly in this debate, particularly from Labour Members. Central London is an extremely expensive place to live.

I have spoken to a number of housing association residents, such as Lee Millan of the Golden Lane Estate Residents Association in the City of London, and Nicole Furre of the Seven Dials housing co-operative. They pointed out that charging families to “pay to stay” in their council home if they earn more than a certain level of income—£30,000 a year outside London, or the relatively modest amount of £40,000 in central London—also introduces unfairness. For a family in my constituency, £40,000 is not a large amount, and I believe that the cap should be set higher and staircased so that people pay rent that is linked to what they are earning at a particular time. There is also a natural worry that the starting level of that cap might be reduced as time goes by.

There is much that is good in the Bill, and I wish to end on a positive note, but all London MPs share some major worries. Meeting the housing needs of the capital requires the commitment and action of all local authorities, and to help to address those shortages I am proud that the City of London Corporation has committed to building 3,700 new homes by 2025, many of which will be outside the square mile—as many Members will know, some of the most successful London housing estates outside the square mile are run by the corporation. The programme will be funded through planning gain receipts, grant funding, borrowing through the housing revenue account and a cross-subsidy from the market sales of new homes.

I am sorry that I have concentrated on London, but Members will appreciate why I have done so. All London MPs know only too well that our city will function successfully only if we start thinking creatively in a way that a number of Members from—dare I say it?—both sides of the House have been doing. Together, we must try to address the housing crisis. Once the Bill is on the statute book, as I hope it will be soon, all London MPs stand ready to help the Government—and any future Government—to ensure that we are able more successfully to tailor London’s housing policy so that the social capital to which I referred earlier is kept intact. Some issues of constrained housing supply can be addressed only at a national level, and I look forward to hearing the Minister’s response to this timely debate.

Rebalancing the UK Economy

Debate between Mark Field and Clive Betts

Wednesday 3rd November 2010 Westminster Hall

[David Mowat (Warrington South) (Con)]

The right answer to the question of how to rebalance the economy is not to shrink the financial services sector. However, the fact remains that we have the largest financial services sector in relation to the rest of the economy of any advanced economy; the financial services sector accounts for something like 27% of our economy. The interesting policy question is whether we want that percentage to increase as a percentage of the whole or whether we want everything in the economy to increase together.

I think that you also raised a point about the public relations problems that banks are suffering at the moment. Of course, banks have made a huge contribution to our economy, but during the last two years they have sucked in something like £150 billion-worth of Government money and they are not really answering the question about how they should restructure themselves. That question has been left to the Bank of England and others—whether through the Glass-Steagall Act, or whatever—to answer. Until the banks do that themselves, they will continue to be criticised over bonuses.

[Mr Clive Betts (in the Chair)]

Order. I want to say something to the three hon. Members who have made interventions. It is fine that you made interventions, but on each occasion you have used the word “you” as part of your comments. This is just a small reminder—I did not want to stop you in mid-flow.

[Mr Field]

It is a credit to you, Mr Betts; it must be the informality of these arrangements that have allowed my colleagues to drop their guard somewhat.

I think that there is a lot in what my hon. Friend just said. As he rightly pointed out, in many ways a huge amount of money has been pumped into the financial services sector, yet there seems to be very little idea of what the global landscape of banking and finance will look like in the future.

The Government have a part to play in the process. We are, after all, majority stakeholders in two of the big four banks—the Lloyds Banking Group and the Royal Bank of Scotland—and we need to utilise that muscle to try to make a case for how the banking world should look in the future.

To some extent, there has been a somewhat confused strategy that has been of no benefit to the Government, the banks or the public. In essence, the risk is that we are now penalising our single most competitive economic sector, while somehow fooling ourselves that a miraculous rebalancing of the economy can occur by default. In truth, the rebalancing will only be threatened by diminution of the financial services sector. Let us not forget why, on the whole, a thriving City makes for a successful Britain.

Since time immemorial, the City of London has enjoyed an international reputation as a bastion of commercial certainty and reliability. It has promoted financial innovation, it has provided an international market for global merchants and in commercial affairs it has rightly been seen as a watchword for justice, neutrality and fairness. Of course, it also has a number of innate advantages that ensure that companies’ loyalty to London runs deeper than just appreciation of its tax regime. Those advantages include, of course, a time zone that lies between those of north America and Asia, which makes the City an excellent base for international company headquarters, and the lifestyle assets of a culture, an excellent educational offering and a population so diverse that all can feel at home.

As a result, London has emerged as the global financial centre. Indeed, so successful has the British financial services sector been that it now contributes more than 10% of Britain’s economic output. We should also remember that although the sector is focused in central London, a significant amount of its activity takes place in a range of regional centres in the UK.

Of course, it is not only banks that benefit from our financial sector but complementary industries such as law, insurance, retail and entertainment, as my hon. Friend the Member for Newton Abbot (Anne Marie Morris) pointed out. Our top-flight universities, the arts and the charitable sector also gain, the latter two from cultural funds or corporate responsibility grants that are, of course, often provided by the City’s top banks and bankers. The presence of our large financial sector gives London the critical mass to attract the best professionals from across the globe.

Banking bail-outs notwithstanding, the financial services sector contributes massively to the Treasury’s coffers in tax revenues, with an estimated contribution of £61 billion in 2008-09. Of course, it also contributes massively in terms of employment, with more than 1 million people employed directly in financial services across the UK.

The financial services sector also plays a critical role in supporting business, not only in attracting huge inward flows of foreign capital to help to fund our infrastructure but in propping up our companies and providing British companies with access to a diversified source of capital, to enable them to invest and expand.

Even if opposition to City dominance is practical rather than simply ideological, I suspect that it is unlikely any time soon that any other economic sector will be a world-beater in the way that the financial services sector is. I am afraid that the industries in which we are hoping to diversify are ones where competition will be very stiff. For example, the Chinese are as keen to develop their manufacturing capacity when it comes to green technology as we are.

Moreover, we should not assume that people in developing countries will start to spend their savings as the western world weans itself off debt and consumption. Britain is just one of the nations that have been pinning some of their hopes on export-led growth. However, despite a 20% depreciation in the value of the pound, the UK’s trade deficit has continued to widen. Meanwhile, with uncertainty infecting the financial system, British corporations have shown little appetite for expansion any time soon, as they accumulate cash cushions instead of investing.