Budget Resolutions and Economic Situation

Meg Hillier Excerpts

Wednesday 19th March 2014 Commons Chamber

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

The Budget mentioned two of the biggest issues in my constituency, which are housing and child care. However, the Help to Buy provisions solve the problems for only some people, but not for those who rent. That is a real issue in my constituency, and I will touch on it in a minute.

On child care, another initiative has been announced, but the practicalities of it have not been addressed. We still have a Government who are looking to threaten the quality of child care, which, for parents in my constituency, is a real concern.

One of the key things that is missing from the Budget statement today is a Treasury commitment to freeing up public land for housing. Under Treasury rules, public land needs to be sold at the highest price. Years ago, when I was a councillor in Upper Holloway in Islington, I had to fight over the then Royal Northern hospital site to ensure that it was sold to improve housing in the area. Most of the housing there ended up being privately owned because of that very Treasury rule. Some 20 years later, we still have that same rule.

The Budget provided a great opportunity for the Chancellor to allow land to be sold at slightly lower than market rates so that more affordable homes could be built, thus improving public health and the general and economic well-being of people in my constituency. The St Leonard’s hospital site in my constituency is a worry as it is now owned by NHS Property Services and will have to be sold—if it is sold—for the highest rate.

Support for affordable housing in areas such as mine is very important. There are now more private renters than home owners. However, both private renting and ownership are out of the reach of people who live in social housing, and the waiting list for social housing is immense.

This Government treat the country as two halves. Over the past six months, a home owner in Hackney will have seen property prices increase by 3.58%. Someone could earn £15,060 in six months on an average property. The average price of a property in Hackney is now more than half a million pounds—£554,306. A flat would cost £347,000. Someone owning a property could earn £45,000 in a year—nearly double the national average wage. It is fine for those people who own properties, but for those who do not, ownership is a long-distant dream.

Let me quote from a letter from my constituent, Tommy. He said:

“I have been looking to purchase my first home. I am 35, and in full time work since I left university in 2001. I have worked hard my whole life but I still require assistance from my parents to purchase my first home.”

In some ways, Tommy is one of the lucky ones. Although he has not found a home, he has parents who may be able to provide him with some help. Many of my constituents are not in that situation.

[Tim Loughton (East Worthing and Shoreham) (Con)]

The hon. Lady is making some good points about the shortage of affordable housing. Does she support an increase in the threshold of £4,250 for the rent a room scheme, in which landlords can rent out a room or floor of their house tax-free, which has not changed for many years, and does not reflect current rental values? I do not see such a measure in the Budget, but would she support an increase?

[Meg Hillier]

I completely support that. Only last night, I was talking to tenants in Haggerston about rent a room and the ability to take in a lodger. They worried about getting into tax and so on, and they were worried about the threshold. That is exactly the concern. In my constituency, someone could legitimately rent out a room in their home for £200 or even £250 a week, so they would quickly reach the threshold. That is a real issue: it is one small way in which we could help some people to find a home, but it does not solve the major problem.

New home starts in the UK have gone down by 10% from February 2013 to just under 9,500, according to figures from the National House Building Council. Completed homes were just over 8,000, so we are a long way short of the target for the new homes that need to be built, and certainly for those that are genuinely affordable. I commend to the House the Co-Operative Housing Tenure Bill introduced by my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds). It is a great shame that the Chancellor did not take the opportunity to look at co-operative solutions that enable people to be much more in control of their own destiny.

I mentioned at the outset that child care is a huge issue in my constituency. I represent a very young borough, and parents want quality. It is a great shame that the Government took a “pile them high, teach them cheap” approach, although that was eventually dropped after their surprise at the backlash from parents. The tax break is welcome for those it helps, but there is confusion about how it will work. It is really important in child care policy that these things are simple, clear and do not change too often, as that makes it confusing for parents to navigate their way through.

[Sarah Newton (Truro and Falmouth) (Con)]

Child care is really important to enable women to participate fully in the work force. Will the hon. Lady join me in celebrating the fact that the figures show record numbers of women in employment and setting up businesses? Does it not sadden her that today the Leader of the Opposition denigrated the achievements of women by attacking Conservative women, calling us “girls”. How would she like it if he called her a girl?

[Meg Hillier]

I do not need to be told by the hon. Lady about the leader of my party. He is an enormous champion of women. There are a lot of women, as we can see, in the shadow Cabinet and in his ministerial team. I do not doubt his commitment to women who work, and to women who do not work, in this country. The record of the Labour Government stands for itself.

On the issue of women’s employment, many women in work are in part-time jobs or on zero-hours contracts. The women I meet from day to day in my constituency are often keen to work more hours, but they cannot find them. Child care is often part of the problem. The figures from the Family and Childcare Trust show that the average cost of a nursery place for a child under two is £5.60 an hour in London. That is 28% more than the national average. The cost of child care in London is a big concern, especially as my constituents increasingly live in expensive private rented accommodation, which squeezes their budget. The cost of living is a big issue.

In London, the average cost of a childminder looking after children under two is £5.46 an hour, but in Hackney, it is much more, ranging from £6.50 an hour to £10 or even more. The supply and cost of child care are a real challenge. Providing support for the cost is one thing, but it does not deal with the question of supply. Cross-party work needs to be done on the issue. My party supports the right initiatives on child care, because we support women who want to work and have their children looked after properly, but we need to make sure that there are policies that we can support in the first place. Sadly, although there is much noise and talk about this, there has not been action at the right level.

I have mentioned my view that the Government treat this country as two halves: the very wealthy, and then there are my constituents, who work on zero-hours contracts, are in part-time jobs, and are on the minimum wage, which has risen, but it is still tough to live in London on £6.50 an hour. A man came to see me. He was a kitchen porter and, although he was out of work, he was seeking a job. The distances he was being asked to travel to work, plus the extra hours of travel, meant that child care and travel costs made those jobs uneconomical, even though he was living in social housing. Those are real concerns for London, and we need to look at London weighting on some of the issues.

The increase in VAT has had a regressive impact on my poorer constituents. I was surprised to hear the hon. Member for Redcar (Ian Swales) defend the increase. I thought that as a Liberal Democrat he would not defend such a regressive measure.

For those people not in work, there is the whammy of the bedroom tax. Last night I met tenants in Haggerston who are very concerned about it. Those who are hit are having to pay £767 a year if they have one so-called spare bedroom, or £1,370 a year if they have two. Many of them will not leave their homes of many years, as one woman told me only last week. They will find the money somewhere or get into debt. The Government are contributing to indebtedness for people who do not have places to move to, even if they wanted to, and they do not have the money out of their benefits. The women I spoke with said, “I am temporarily not working. I want to work again, but I’m not going to leave my home, where I have lived for 32 years.” She was adamant about that and will go to great lengths, possibly getting into debt, to avoid moving.

Another opportunity has been missed. The housing benefit disregard in tax credit will be abolished when universal credit comes into place, which means that 100,000 people will see their child care support drop from 96% to 70% of costs. As my right hon. Friend the Leader of the Opposition said from the Front Bench, this Government give with one hand and take with the other. That will have a particular impact in my constituency because of the high private rents.

There are some things in the Budget that I welcome, such as the export loan changes, which will help many of the businesses in my constituency, particularly in Shoreditch. However, there was no move to make banks more locally accountable, as my hon. Friend the Member for Wrexham (Ian Lucas) highlighted. Although more data are now published on where banks lend, there could have been an opportunity for the Chancellor to look at a US-style community reinvestment Act. I hope that the Government will still consider that.

The tax avoidance measures, following up on the work of the Public Accounts Committee, are also very welcome. I hope that they will do something to stop big companies trying to dodge their bill to the British taxpayer. The stamp duty increase for companies purchasing properties worth over £500,000 might do something to stop overseas purchasers. The changes for air ambulance services will be of great benefit not only to my constituents—the Royal London hospital is just on the edge of my constituency—but to many people up and down the country.

Finally, I am delighted that my constituents of Caribbean origin will now see a fairer deal on air passenger duty. It is about time that the people who broke their backs for Britain when they arrived in the ’50s and ’60s got a fair deal. It is an injustice that has now been righted. I also welcome the bingo tax changes. I support my local Mecca bingo hall, where I have called out the numbers, to my embarrassment and that of regular bingo-goers. It really is an important provision for many people, so it is good that that wrong has now been righted.