Oral Answers to Questions

Meg Hillier Excerpts

Tuesday 16th June 2015 Commons Chamber

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

The Minister talks about housing topping the charts in Milton Keynes, but in my constituency we are in danger of topping the charts in house prices, with the average price now £606,000. That is being fuelled in part by overseas buyers who purchase a property and either rent it out or do not live there. Have the Government any plans to tackle this and help my constituents get on the housing ladder?

[Harriett Baldwin]

My hon. Friend the Member for Milton Keynes South (Iain Stewart) topped the chart in Milton Keynes personally as well, but the hon. Lady raises an important question: London house prices are a key issue for her constituents. That is why the Government have brought in so much support to increase the number of affordable homes. The number of social homes and affordable homes increased by over 200,000 in the last Parliament. We are committed to continuing that great work and to bringing in the concept of starter homes, which we hope will add further to housing supply.

Amendment of the Law

Meg Hillier Excerpts

Thursday 19th March 2015 Commons Chamber

[Vince Cable]

The hon. Gentleman is absolutely right to say that that is a very retrograde step. The Economic Secretary and I have had discussions with the banks about how to deal with that problem, and about how to mobilise the post office network—under this Government, it has been saved and stabilised—to provide an alternative. I am not absolutely certain, but I hope that an announcement will be made within the next few days to protect the position of the last bank in the village.

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

There was a £30 billion unanswered question in yesterday’s Budget. We know that there will be £12 billion of cuts in welfare, but will the Secretary of State outline to the House where the axe will fall for the remainder?

[Vince Cable]

If the hon. Lady read the document that the Chief Secretary introduced this morning, she would get a very clear picture. I have explained the 55% to 45% split, which is quite explicit, and I am very happy to defend it.

--- Later in debate ---

[Susan Elan Jones (Clwyd South) (Lab)]

It is a great privilege to speak in this Budget debate and to follow all the previous speakers, who have passionately expressed their views. I want to pay particular tribute to my right hon. Friends the shadow Chancellor and the Leader of the Opposition, who spoke thoughtfully and in great depth, sharing their vision of how our country can and should be better, and describing how this Government have failed working families. That is the real debate of this Budget—the one the Conservatives do not want to have.

I suspect it is even the reason why the Prime Minister is refusing my right hon. Friend the courtesy of a one-to-one television debate. The Americans have been doing this since Nixon and Kennedy, and at the last election the Prime Minister said that his predecessor would show that he was “out of touch” if he did not agree to such a debate. This is not like the Bullingdon club photograph that the Prime Minister has done everything in his power to stop media outlets showing: he cannot airbrush out a television debate. He can hide and refuse to debate, but he cannot stop the real debate taking place in households, workplaces, communities and families the length and breadth of the country.

We well remember the debate about “broken Britain”, thoughtfully expressed in the research of the Centre for Social Justice, which the Conservative party often trumpeted. However, that now demonstrates itself in the nightmare of the anti-family, debt-inducing curse of zero-hours contracts. It is a debate we hear in community groups, charities, churches and other faith organisations.

As we debate this Budget, it is worth noting that the 2014 National Church and Social Action survey reports that food distribution tops the list of church community activities. It is above parent and toddler groups; above community festivals and fun days; it is even above school assemblies and religious education. As someone who worked for charities for 15 years before becoming a Member of this House, I do not just welcome voluntary endeavours, I consider them vital. However, the Government have shown where their priorities lie—and it is certainly not with people facing zero-hours contracts. A lady in my constituency whose church collects food regularly for the Oswestry food bank just over the border, put it memorably:

“We’re used to collecting, but it used to be for Romanian orphans, not for people in our country without enough to eat.”

That is not to say that everything the Government do is bad. There were some positives in the Budget and I want to mention two I particularly liked. I welcome the increase in personal allowances, and in the gift aid-like payment in the Small Charitable Donations Bill, not least because a number of Labour Members worked on that Bill Committee to increase the threshold. The details need to be worked out, but there are some real positives. However, the Government need to increase support for the self-employed. I am very much of the view that if we as a nation handle this right, the potential for private sector-led regeneration in rural and semi-rural communities is great.

Let me tell the House about the kind of enterprise in my area that I am talking about. Recently, Alice Murray, who lives in Overton in my constituency, visited me here in the Houses of Parliament. Alice is responsible for setting up the company Giggles and Games, and last year she won the prestigious “Entrepreneur of the Year” award at the Free2Network business awards. Alice had not worked outside the home during the 17 years she brought up her four children. By her own admission, she was too nervous to attend an open day at Glyndwr university in Wrexham five years ago. But she grew in confidence while studying. Having organised a major event as part of a college module in entrepreneurship, Alice, after graduating in 2012, established Giggles and Games - The Giant Game People, a company that has achieved great acclaim for its games for parties, weddings and corporates. Based in north Wales, it covers Shropshire and Cheshire, but its staff are more than willing to travel further afield. The Giant Games include Giant 5ft Buzzers, Giant Connect Four, Giant Chess, Giant Snakes and Ladders—3 metres by 3 metres—and, best of the lot, Giant Stocks. The company is innovative, different and appealing, and it employs people and brings money into our local economy. I appreciate that Giant Space Hoppers are not everyone’s thing, but the business is thriving because it is innovative.

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

My hon. Friend is making some very good points—and I am tempted to suggest some people who could be put in the stocks to which she refers. However, if such businesses are to be successful, they need universal superfast broadband that is accessible to all. Does she agree, and share my hope that the Government will take that issue up with even more vigour?

[Susan Elan Jones]

I agree with my hon. Friend that that is a hugely important issue. In my area there are many businesses waiting to be born that will never even reach gestation, simply because we do not give enough practical help to would-be entrepreneurs. The more than 5 million working people in our country who are self-employed face huge problems. Two thirds have no pension, and one in five cannot get a mortgage. My right hon. Friend the Leader of the Opposition spoke powerfully last autumn when he declared that the next Labour Government will ensure equal rights for the self-employed. That is a very important issue.

Finally, I want to use this Budget debate to seek clarity about a particular concern I have. There has been a great deal of interesting debate about the effectiveness of the new allowances for those who are married or in civil partnerships. That issue has been debated before in the House, and I am sure it will be in future. Both halves of the pantomime horse that seem to make up the coalition appear to have differing views on that issue. However, according to a written reply I received from the House of Commons Library, those who wish to claim the new transferable tax allowance for married couples and civil partners may only register for it over the internet. Given that 18% of adults in the UK cannot use the internet, the lack of options is quite surprising. Whatever our views on the efficacy and effectiveness of this allowance, it has no validity whatsoever if it is not available to those who cannot access the internet, many of whom are likely to be elderly and/or on lower incomes. Wherever we stand on this subject, there is a very real question for the Government to answer and I look forward to a response.

[Mr Richard Bacon (South Norfolk) (Con)]

I greatly welcome the Budget and particularly the announcements on housing. I make no apology for talking about housing in a debate opened by the Business Secretary. As the representative of the CBI said at the Homes for Britain rally in Methodist Central Hall earlier this week, housing is a business issue. If employees cannot find somewhere to live that is relatively near work, it affects the way they work, because they spend too long commuting. Housing is central to all our lives, so I welcome the measures the Government have taken on housing in the Budget.

The hon. Member for Halton (Derek Twigg), who, sadly, is not in his place, referred to the Chartered Institute of Housing’s comment on Help to Buy ISAs—that they would make no difference because they do not address the fundamental problem. I, too, have read that quote, but I thought it was slightly unfair, which is why I intervened on him. The Budget also addresses the supply side through the doubling of the number of housing zones, and I shall concentrate on that subject in my speech. It proposes to create 20 new housing zones which, according to the deputy mayor of London, Richard Blakeway, will provide a “framework for focused engagement” in particular geographical areas, create “planning certainty” and, most importantly, provide funding that is committed to essential infrastructure. I want to concentrate on that last aspect.

A number of endeavours have made an enormous difference over the past few years, in which the Government have engaged with the public and private sectors to provide a focused environment in which huge amounts of activity can occur. The most obvious example is the London Docklands development corporation, which transformed the docklands a generation ago. We can now see the extraordinary development that simply was not there 25 years ago. I have seen something similar in Northern Ireland, in the Laganside development, where the investment of £130 million of public money led to about £1 billion of investment from the private sector. This has transformed the nature of Belfast city centre completely.

The approach that has been adopted in the commercial sector can also be applied in the residential sector, and that is what housing zones are all about. I am pleased about the provision for them in the Budget. If we are to unlock finance for schemes in the residential space, the most important thing is to get rid of the blockages that are making that so difficult to achieve. We have to ask ourselves why housing supply does not rise to meet demand in the way that happens in most other markets. The truth is that people who would like to get involved in the housing market have very limited choices.

The volume house builders do a reasonably good job for the people who want to buy their product, but 75% of the people polled in a YouGov survey said that they did not want to buy the volume house builders’ product. In a well-functioning market, other providers would come in and the range of supply to meet that latent demand, which is not being satisfied, would naturally enter the market. That does not happen in the housing space, however, simply because it is so difficult to get into the market because of problems with access to land and access to finance. The Government’s proposals for housing zones start to address that, and I hope that their announcement in yesterday’s Budget will be the harbinger of a new direction that will solve the housing problem.

The hon. Member for Halton said earlier that Labour would build 200,000 houses if it got into government. I remember, half a generation ago, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), when he was Chancellor, appointing Kate Barker to undertake a review and subsequently announcing the building of 240,000 houses. Announcements do not actually make a difference, however, because it is not Governments or Oppositions who build houses. It is house builders who build houses, and if we took more notice of customers and their preferences, we would get more houses built.

[Meg Hillier]

The hon. Gentleman might have had a different experience in Norfolk, but in my constituency of Hackney South and Shoreditch, many of those “customers” are non-domiciled overseas landlords who never interact with the people who end up living in their homes. There is often a desire among those developers to get a quick, easy sale over a weekend in places such as Hong Kong and Dubai, rather than putting out to market properties that would benefit local people. Does the hon. Gentleman not agree that this really needs to be tackled?

[Mr Bacon]

The hon. Lady makes a valid point. I have listened to economists saying that this has not been a problem in London and that the wall of money that has come in to support investment was simply replacing investment that did not happen after the crash, but I am not sure that I agree with them. We see flats in London being exchanged time and again without anyone ever living in them, and there comes a point at which this becomes a moral issue. There is developed property with nobody living in it, and I think that we should be thinking first about our own people. That fundamentally describes the planning problem, and we need to decide how to do these things.

My Self-build and Custom Housebuilding Bill, which I am pleased to say is now going to become an Act, will give people in every area an opportunity to go to their local council and say, “Where is your register? I want to put my name down as someone who wants to acquire a serviced plot.” The council will have a statutory obligation to keep a register of such people and to have regard to it when drawing up its housing plans, whether for planning and housing, for regeneration or for the disposal of land. In visits overseas, I have seen that such space can also encompass housing for affordable rent through housing co-operatives as well as housing for private purchase. The point about serviced plots is key. This goes back to what I was saying about infrastructure and about removing the blockages to further development. This is about funding the essential infrastructure that is needed before further development can take place.

In the Government’s Budget last year, they announced the provision of £150 million towards serviced plots, and I interpret the creation of 20 housing zones that was announced yesterday as a further step in the right direction towards making the providing of the necessary infrastructure much easier. If a customer wants to come into the marketplace and take advantage of the opportunity to build a house that meets their own needs, the blockages that they meet can prove terminal. They might be trying to find a site, to acquire a piece of land or to obtain the necessary finance, for example. They might be told by the local authority to do an archaeological survey that they did not realise they would need, or a service supplier might tell them that the cost of supplying electricity or water, say, to the site would be prohibitive.

Going back to what Mr Blakeway, the deputy mayor of London, has said about planning certainty, removing all those blockages would create a focused environment in which we know that houses would be built. Housing zones are part of the way to make that happen. The underlying infrastructure being funded by the Government would create the possibility for much more housing being developed more quickly. There is also the possibility of recouping some of that cost through the tax revenues, including council tax revenues, that would flow once the housing was in place.

We need a housing market that works. We need to make the supply work in a way that it is currently not doing. We need to unlock the power of potential customers who do not yet have an opportunity to turn their latent demand into something real. The National Custom and Self-build Association commissioned Ipsos MORI to carry out a survey, which found that 1 million people would like to build their own dwelling or get someone to build it for them in the next 12 months, and that 7 million people would like to do that at some point in their lives. I hope that this Budget will be the harbinger of an important turn of direction towards emphasising the importance of getting underlying infrastructure in place so that the energy and vision of our own people can be deployed in providing the housing that we need.

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

I should like to draw Members’ attention to my entry in the Register of Members’ Financial Interests. I have an interest in housing.

I represent a constituency that is now often described as “achingly cool”, but it is also one of the poorest parts of the country. Those achingly cool young hipsters with their beards and pink hair who populate the coffee bars and watering holes of Hackney and who make the creative industries there the great success that they are—even they face challenges.

In yesterday’s Budget debate, and since then, we have heard so much huff and puff that anyone would think that the Budget had been written by the big bad wolf. In my constituency, that will be its effect on many people. This Government have left a £30 billion bombshell that will hit us after the general election. We know that there will be £12 billion of welfare cuts, and the rest will come from public services, but the Government have so far remained silent on where the axe will fall.

I know for a fact that Hackney council is looking to make £28 million-worth of cuts, and we have already seen 24% cuts to further education colleges, including my own excellent Hackney community college. These public services matter massively in areas such as Hackney, where about 36% of children live in poverty. That is the third highest rate in London. Many of those children live in households that are poor but ambitious. Their parents are working on zero-hours contracts in low-wage jobs while having to meet the costs of child care and high private rents. Many poor families cannot now get housing in the social sector. That means that many of them are trapped on benefits or tax credits. Talking about tax and welfare cuts sounds appealing, but it actually traps people who have the ambition to break out of benefits and into work and to be self-supporting. It stops them in their tracks. The routes to self-advancement are shrinking. Another cut like the 24% cut to FE would have a devastating effect, particularly on women stuck at home who do not speak English and who need English for speakers of other languages courses just to get into the initial job market.

At my surgery, a man came to see me in tears. He was a kitchen porter on minimum wage and had been asked by the jobcentre to seek jobs in zones 5 and 6, which is not an unreasonable request, but his wife had a part-time minimum wage job and they looked after two children between them, and the cost of child care and the extra travel combined meant that even in a council property he could not make ends meet. The Government are once again threatening to squeeze people in Hackney until the pips really squeak. In fact, I am not sure that there are any pips left to squeak for many people in my constituency.

A key issue that was not fully addressed yesterday is housing and I am glad that the hon. Member for South Norfolk (Mr Bacon) has mentioned it. I am fed up with the mantra from the Government about building brownfield land as though that is a great solution, because every experience I have in Hackney and across London shows how empty those words are. Huge publicly owned sites are being sold in my constituency to the highest bidder and not for local affordable homes.

I have some shocking examples. St Leonard’s hospital was taken from the local NHS and is now held by NHS Property Services Ltd, or PropCo. We do not know what will happen to that site but, in a horrible twist of irony, it was formerly Hackney's workhouse. In my view and that of the council and of others locally it should be used for affordable housing for local families when it is eventually redeveloped. That would do more for public health locally than the private housing that is likely to appear there.

[Mr Binley]

Does the hon. Lady recognise that Northampton especially will take on much of the burden of the problem of housing in London and the south-east and that the answer to the burden will be to build on brownfield sites? Outside London, brownfield sites are a massive opportunity.

[Meg Hillier]

I do not doubt that some are, but my particular issue is brownfield sites that are owned by the public—the taxpayer. They are part of Government departments and are being sold off to the highest bidder rather than adding value to the local community. With all due respect, I am sure that Northampton is a lovely place to be, but my constituents want to live in Hackney South and Shoreditch and Hoxton and Homerton. They do not want to be living out of London, facing long commutes to work. When people are on the minimum wage, that is just not an option. In fact, even if they are on much more than the minimum wage it is not an option, as commuting costs make it unsustainable.

Kingsland fire station was not only rashly closed by our Tory Mayor of London but has now been sold off for a rumoured £28 million. That clearly cannot be for affordable housing, but the situation is still shrouded in secrecy and we are waiting for final information. Another example, neighbouring my constituency, is the Mount Pleasant sorting office in Islington, which my hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) has rightly championed. That huge publicly owned former sorting office site is being sold mostly for luxury homes. It is time that the Treasury rules changed and, instead of the highest cash bid winning, the welfare and benefits of local people were taken into account.

What do the Government offer on housing? They offer Help to Buy and now the ISA for homebuyers, with up to £3,000 for young savers. They are great for those people, but it fuels the house price increases we have seen in my constituency. Let me give Members the flavour of that. In 2005, the average house price was £269,000. Today, the average house price—it might have gone up since I looked at it this morning—is £606,000. That is a staggering 124.9% increase in 10 years.

Rents are also rising sky high and there is nothing in the Budget for renters. The median private rent in Hackney is £330 a week and median full-time earnings in Hackney are £608 a week. More than half of people’s earnings are going on rent and many are trapped sharing bedrooms with strangers, using living rooms as bedrooms and not having the option of moving. It is impossible to be sure that one can raise a family in most private sector accommodation, as there is no security. I am glad that my Front Benchers are considering this, but we need to go further. Hackney is an example of what will face other parts of the country in future.

I was staggered to hear the Business Secretary defend the bedroom tax. In the Hackney Homes homes alone—the former council properties—2,160 tenants have been hit by the bedroom tax. It sums up the Government’s approach, because it does not work. There are no homes for people to move to and it is costing the taxpayer. Let me give an example. One woman was living in a three-bedroom property. Her teenager moved out and she was temporarily not working, so she was encouraged to move to a smaller two-bedroom property. She did so, but even though it was a social housing property, the rent was higher than that for her three-bedroom property. She faces a terrible struggle to find work that will pay the higher rent and she has lost the home that had been the family home. It is mean-spirited, it undermines the stability of secure tenancies and it is wrong. It must go. No ifs, no buts—if there is a Labour Government, the bedroom tax will be abolished.

The Chancellor talked about tax avoidance, and aggressive tax avoidance must be tackled. As a member of the Public Accounts Committee I have been playing a role, along with the hon. Member for South Norfolk, in ensuring that that happens. We know that uncollected tax has risen by £3 billion under this Government and all parties want to see more investment in HMRC’s ability to tackle companies that are running rings around Revenue officials to pay as little tax as they possibly can. Let us consider businesses up and down the country. Businesses in my constituency tell me that not only is it difficult to borrow money, despite the Government’s raft of lending schemes, but overdrafts are a big issue. I see that the Economic Secretary, who is the Minister responsible for banking, is in her place. Why do we let the high street banks off the hook every time we discuss these issues? They should be lending to local businesses. They are best placed to make a decision about what works for those businesses, but they do not do it.

I am delighted that the Minister is in her place, because I know she has a genuine passion for change in the banking sector. In the Budget and the document “Banking for the 21st Century”, there is no mention of real-time data on credit records. We currently have to wait 30 to 60 days for our data on lending to be available on a credit record. That encourages irresponsible lending. We have had a lot of debate about payday lending, but real-time data on credit records would have ensured that such lending applied only to those who could afford to pay back the loans. If the Minister can give me any indication of the Government's latest thinking on that and how fast they could move towards what seems to me to be a sensible measure, I would very much welcome that.

The Budget does nothing for my constituents. It screws the poorest down into a very difficult situation. They are feeling trapped, unable to escape from a situation that is not of their making. Their incomes have gone down and they are caught in a benefits trap, despite the fact that many of them want to get out of it. The Government are rewarding people they believe will vote for their party but not delivering for my constituents.

--- Later in debate ---

[Alex Cunningham (Stockton North) (Lab)]

I worry about the poorest people in society, including the working poor, in places such as Stockton-on-Tees, because this outgoing Government have failed, even at the last opportunity, to do anything to help them. The Government have done nothing to boost their incomes or provide them with the jobs they would love to have. The Budget will bring no benefit to tens of thousands of people across Teesside, and more across the country, who hold low-paid jobs, with wages of no more than £5,000 or £6,000 a year. While the Chancellor maintains huge tax cuts for millionaires and increases tax-free allowances for people paying higher-rate tax, very few low-paid workers gain anything from changes to the tax system. These people can only dream about saving some money.

This is another Budget for the better off to be better off still and the poor to be poorer. The Chancellor even failed to deliver the promised minimum wage of £7 an hour—Labour will do much better. In his very first Budget speech, the Chancellor pledged that under his economic management the coalition Government would build

“an economy where prosperity is shared among all sections of society and all parts of the country.”—[Official Report, 22 June 2010; Vol. 512, c. 167.]

Many of the people I represent have not benefited from even the low inflation rate. Instead they have been stung by above-inflation increases in the cost of things such as energy and other utility bills. The Chancellor might be in it with his rich pals from the hedge funds who bankroll the Tory party, but I do not see much evidence on Teesside of everyone sharing in that prosperity.

Perhaps more worryingly, we have seen the repeated pattern of the poorest being hit the hardest, and nowhere are the effects of this more starkly illustrated than in the jobs market. For too long, unemployment has been higher in the north-east than anywhere else in the UK and that has been the case in every quarter since April to June 2011. Hon. Members will not be surprised to learn, then, that the claimant count in the north-east is also the highest in the country, and in my constituency the numbers are higher still. The 4.1% we have claiming support related to unemployment is more than three times higher than the rate in the south-east, and almost seven times higher than the rate in the Chancellor’s seat in Tatton.

Are Government figures an honest reflection of the numbers of people who ceased claiming this allowance? They are not. According to research by the House of Commons Library, of those who have ceased claiming jobseeker’s allowance in my constituency, only just over one third did so because they had found work. Conversely, more than half were recorded as doing it “for other reasons”. Not a single person has done so as a result of upping their hours to more than 16 a week. So, where have they gone? We know that they do not have jobs. Although a few may have gone abroad, into education, or even died, that has not happened to the hundreds of people who have disappeared from the Government’s statistics.

It is also a sad fact that too many people feel insecure and powerless at work. Record numbers of people are working fewer hours than they would like, and there is an increasing reliance on zero-hours contracts. The result is that more people worry about having enough money to pay their way. More than 5 million people are in low-paid jobs, while a quarter of a million people earn below the national minimum wage.

[Meg Hillier]

My hon. Friend sums up the challenges well. People may be in jobs, but what is the quality of those jobs and what prospects do they have? Does he agree that that is an issue not just in his constituency but in many other constituencies, including mine?

[Alex Cunningham]

Certainly, it is an issue across the entire country. I hear from people who are told at 6 o’clock in the morning that they are required for work, or, worse still, that they are not required for work. That is nonsense. What surety of income does that give them as they go into the week ahead?

The value of the national minimum wage has dropped by 5% since 2010, which is why the amount spent on in-work benefits and tax credits has risen 18%. Why cannot this outgoing Government recognise that people want to earn their money and look after their families rather than exist in a dead end, low-paid role that leaves them dependent on the state? What of those who, through no fault of their own, are dependent on the state? I fear what the Chancellor is planning to do to them next. Why is the Chancellor so coy about spelling out where the £12 billion cut in welfare spending will fall? Is it because he knows that decent people will baulk at his plans to devalue further the incomes of our most vulnerable?

Has the Minister seen the report that came overnight from Herriot-Watt university for Centrepoint, which shows that more young people will be homeless as a result of Government policies, and that many in work could lose their jobs if their housing benefit is removed and they are forced to return to live with their parents? We should not forget that this Government’s policies have seen these young people shoulder a disproportionate share of austerity and its worst effects.

--- Later in debate ---

[Andrea Leadsom]

I am glad that the hon. Lady has clarified what she meant.

I would like to tackle head-on the lazy idea held by many Labour Members that when a country grows, it is the Government who do the running. It is not the Government; it is businesses and hard-working individuals.

In this Budget, as in all previous fiscal statements, this Government have demonstrated our pro-business, pro-growth credentials. That means more tax credits for key sectors, whether they be energy-intensive heavy industries or creative industries maintaining Britain’s status as a cultural centre of the world. It means further action to stimulate investment in the North sea through investments and tax cuts, and a long-term strategy for superfast broadband, enabling the next step in the technological revolution.

Yesterday, my right hon. Friend the Chancellor announced that next April we will abolish national insurance altogether for employing a young apprentice. We will be holding a major review of business rates, reflecting the fact that the old system needs to be reviewed so that it works better to support aspiring business owners in our country. He announced the abolition of class 2 national insurance contributions for the self- employed, and the abolition of the annual tax return altogether. I can tell you, Madam Deputy Speaker, that I had phone calls to my office from two constituents, one of whom said that the Government’s Help to Buy ISA will persuade them to vote for me, while the other said that the abolition of the annual tax return will encourage them to do the same. On the basis of my own small opinion poll, this is already making a difference.

[Meg Hillier]

The Minister raises the important issue of national insurance contributions. Will she highlight for many of the self-employed people in my constituency what that will mean for their pensions?

[Andrea Leadsom]

We are consulting on that, and further information will come out in due course.

To help the food, drink and hospitality industry, we are freezing wine duty, cutting beer duty by a penny a pint, and cutting duty on cider, Scotch whisky and other spirits by 2%. To help any business that depends on a car, a truck or a van—or even a pink bus—we are cancelling the fuel duty increase scheduled for September. This is the longest duty freeze in over 20 years, saving someone filling up a Ford transit van £15 at the pumps every time they fill the tank. To help our businesses expand internationally, we are putting ourselves forward to be a founding member of the Asian Infrastructure Investment Bank, and we are doubling our support for British exporters to China. These are all vital steps to improve Britain’s ability to export and to support those businesses that are returning Britain’s economy to health.

This is a Budget that helps businesses from a Government who understand businesses. This is a Budget that will help secure Britain’s economic future for years to come. This is a Budget that will deliver prosperity for all, and I commend it to the House.

Ordered, That the debate be now adjourned.—(Mr Vara.)

Debate to be resumed tomorrow.

Oral Answers to Questions

Meg Hillier Excerpts

Tuesday 9th December 2014 Commons Chamber

[Danny Alexander]

My hon. Friend is right. It is incredibly important that we create jobs in this country as that is providing opportunities and incomes for people who did not have one previously. The Government should be proud of that. Today the 2 millionth apprentice has been recruited under this Government, and the young lady, Paige McConville of Oxford, will meet the Business Secretary to highlight that achievement.

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

Many people in my constituency who are in work are trapped in low-paid minimum wage jobs. Often they are not able to add to the hours that they work in order to earn more, and they rely on the state for prop-ups with housing benefit and tax credits. When will the Chief Secretary to the Treasury understand the cost of living crisis in the country, and what will the Government do about it?

[Danny Alexander]

I recognise that some people find themselves in the situation the hon. Lady describes, and that is precisely why we need a growing economy that creates more jobs, as it does in her constituency. The economy is creating more employment opportunities and allowing people to progress in work. The most recent figures showed that people who have been in full-time work for more than a year—85% of the jobs created in the past year are full time—have seen their wages increase by 4%.

Oral Answers to Questions

Meg Hillier Excerpts

Tuesday 2nd September 2014 Commons Chamber

[Mr Osborne]

That prediction, like all the Opposition’s predictions, was completely wrong. For every job that has been lost in the public sector because of the necessary and difficult decisions that we have had to take to reduce the 11% budget deficit, more than five jobs have been created in the private sector. That is testimony not only to the strength of the Government’s economic plan, but to the ingenuity of British business in creating such opportunities.

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

T4. The Chief Secretary has been keen to trumpet free school meals for six, seven and eight-year-olds. However, this week in Hackney, many of the 47% of children who are living in poverty will turn up at school not having had a square meal for six weeks. They will be fed by the free breakfast clubs that are supported by head teachers and charities. Is it not time that the Government woke up to the reality of poverty? The parents of those children can get only low-paid, part-time work if they are lucky. Is it not time that the Government took action to tackle child poverty?

[The Chief Secretary to the Treasury (Danny Alexander)]

The hon. Lady is right to highlight the seriousness of these issues. However, as has been said in this question session, the statistics show that child poverty in this country has come down and is coming down under the coalition Government. It is precisely because of these issues that we are introducing the policy of universal free school meals. The evidence shows that it increases take-up among low-income families, who do not always take up free school meals, and ensures that children get a square meal at school each day. I hope that she will join me in welcoming that.

Oral Answers to Questions

Meg Hillier Excerpts

Tuesday 29th April 2014 Commons Chamber

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

Since funding for lending was introduced, funding for small businesses has actually gone down. Businesses in my constituency tell me that one of the biggest problems is the withdrawal of overdraft facilities by many banks. What is the Minister doing to ensure that such short-term cover is available.

[Andrea Leadsom]

Only recently, the national policy chairman of the Federation of Small Businesses said that funding for lending is helping to bring down the cost of credit for small businesses. It is vital that banks focus on rebuilding business lending, and many of them are doing so. As the economy recovers, we expect that to pick up. Indeed, gross lending is 12% higher than in 2012-13.

Finance (No.2) Bill

Meg Hillier Excerpts

Tuesday 8th April 2014 Commons Chamber

[Mr Burrowes]

I am grateful for that robust intervention. There is obviously cross-party support for recognising that child care is a central and significant issue in dealing with parents’ ability to manage their budgets and go out to work.

The lack of affordable child care is one of the reasons for the increasing numbers of relatives looking after children, especially grandparents. Two thirds of grandparents—well over 5 million—regularly look after their grandchildren. It is important to recognise the wide variety of child care. As we properly extend formal child care, I encourage the Committee, and the Minister, to recognise the role and value of informal child care for the millions of parents and grandparents who are out there saving a lot of money—thousands of pounds a year—for working families. Yes, the cost of child care is one of the reasons for the increasing number of grandparents taking on this role, and it is an important factor in parents’ decisions, but the significance of grandparental child care cuts across many areas. One in three families relies on it; one in two single-parent families particularly relies on it. It is relied on especially by families with disabled children. Often they may be living nearby, perhaps on the margins of poverty. Grandparents play a very significant role in providing emotional, financial and practical support, often through short-term care in times of crisis which then extends into long-term care.

Black and minority ethnic households are more likely than other households to have a grandparent living under the same roof as the parents and the child, taking on caring responsibilities. As we extend formal child care, it is important to acknowledge the calls from vulnerable families in particular for more flexibility in terms of tax-free relief and, as has been said in other debates, unpaid leave for grandparents who are in work.

It is important to talk not just about pounds and pence, but about child care and development. A review on child development conducted by the Institute for Fiscal Studies and the Nuffield Foundation asked parents to rank the factors that motivated them to ask grandparents to care for their children. The top-ranking factor was trust and just below it was love. We have to recognise that. Yes, more affordable child care is needed to relieve the strain on grandparents and other family members, but at the same time what parents want is for the person looking after their child, particularly in their early years, to have a trusting, loving relationship with them. The report was published in 2012, but it still holds good. It provided evidence that care from grandparents often results in high vocabulary and socio-emotional development.

It is obvious to parents and, indeed, those relatives and friends who know their children best, that the love and general interest shown by grandparent carers is invaluable. It is hard to quantify in financial terms, but it is certainly valuable. Relatives put themselves out on a personal level and that is what we want for all our children. We want them to have that type of care, whether it be in a nursery, from a childminder or, more often than not, from a grandparent or relative. We want them to receive that extra support on a personal level, which is of immense value to the child’s development and care.

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

I am not knocking grandparents, who obviously play a valuable role in many cases, but there are studies that clearly show that grandparent care does not necessarily mean a higher level of early-years education for children, and that care in a formalised or trained setting can be better for child development.

[Mr Burrowes]

I appreciate that and I have looked at various parts of that evidence, but it is important to recognise that the Nuffield Foundation and IFS report noted that, while being in formal child care appeared to make children initially more school ready,

“being cared for by grandparents did not significantly put children at a disadvantage in school readiness compared to children not in formal childcare”.

--- Later in debate ---

[Meg Hillier]

This is such an important issue that I hope we do not end up with a false party political divide. The new clause is a sensible and proportionate measure that we should all support, because it would not tie anyone to anything much. It simply suggests that we should assess the impact of changes to the tax and tax credits system, to ensure that we all work together to make the system fairer, simpler and more cost-effective for parents and better for children.

The issue of child care is about both supporting supply and ensuring that it is affordable for the user, and both parts of that need to be simple. We have seen problems in the system, because without subsidy at the supply end there is a disincentive to provide supply. I have suggestions about how we might address that through the tax system, which I will come on to later.

Governments of all parties often talk about the difference between child care and early years education, and we have heard a little of that divide in this debate. However, I am sure that all of us who have had experience of the matter would like to see the two combined in most cases. When Governments talk about early years education, which is inevitably expensive, they mean providing 15 or 25 hours a week, not the number of hours that would be needed for somebody to work full time. I recognise that that is unaffordable at the moment, although I have ambitions on the matter—I do not speak for my Front-Bench colleagues, but I have aspirations for what they will achieve in time.

Child care needs to be different for different children. I will come to the issue of older children, but whether it is after-school care or pre-school care, flexibility is the key. I concur with the hon. Member for South Northamptonshire (Andrea Leadsom), although not completely—she decided to rubbish the Labour Government’s achievements, and I will make no apology for what Labour achieved through Sure Start, with a massive increase in the quality and availability of child care and reductions in cost in many places. As she, I and other Members recognise, flexibility is vital, because people, particularly in London, do not work nine-to-five as much as is often believed.

[Andrea Leadsom]

I am moved to intervene as the chair of the all-party group on Sure Start children’s centres. I once wore a hat in the Chamber so that I could take my hat off to the Opposition for having created Sure Start. However, I hold to the fact that, brilliant as the idea was, there is still a huge amount to be improved on. I urge the hon. Lady to agree that we do not do nearly enough to focus on the developmental needs of the very young.

[Meg Hillier]

There is cross-party support for all of that, because I agree that Sure Start was a revolution in early years support. I felt that it should continue so that there was Sure Start at the ages of five and 11. We would stray off the debate if I got into that territory, but my constituency still has 37% of children living in poverty and it is a young constituency. Families of all backgrounds have used Sure Start, learned from each other and got support. Whatever their background, people have challenges with their children at an early stage, and children really have got a sure start. Titles of Government initiatives often become glib, but Sure Start meant something to me and to many of my constituents.

The London assembly Labour group carried out a study on the London cost of living, and it found that flexibility in child care was particularly important in London, where there are long commute times and variable hours. One of the benefits of the child care voucher system, which is not universal, is that where it has been taken up it has provided a good deal of flexibility for parents to buy into properly qualified, registered child care. Again, the study proposed by the new clause could investigate how to support quality through a tax voucher system. Of course, we have seen a reduction in tax credits, although I welcome and support what my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) said about the U-turn on universal credit paying 85% of child care costs. The key point is that we can have Government initiative after Government initiative, but parents want the system to be kept simple. They want to know what money they have to play with and where they can spend it, which means that both the supplier and the purchaser of a service, in this case the parent, can understand the system.

We need cross-party agreement so that we have a system that sticks and is not tinkered with time after time so that people do not have to work out, “Does that apply to me? My child is going to be that age on that date, so does it apply to them? Oh, they have missed that cut off by one day, so that whole term will be more expensive than it will be for the neighbouring child, who got in by one day.” There are all sorts of silly little bits of the system that make it complicated for people to understand. Such things can be disincentives for accessing child care and ensuring that people get the right support, particularly mothers who are going back to work.

I am a London Member, and the new clause would particularly benefit people in London, because child care costs in London are inevitably higher. The costs of premises are higher. Although there is a minimum wage, child carers are rightly paid more, and in London their wages will be higher than in other parts of the country. Research by child care site Findababysitter.com found that a quarter of parents in London who were not in work were prevented from getting a job because of high child care costs. The Resolution Foundation found that one in five mothers who were already employed would like to take on an extra 10 hours’ work a week on average but could not do so because they would need the commensurate extra child care—not just 10 hours extra but enough child care to allow them to travel to and from work.

A parent in London buying 50 hours of child care a week for a child under two would face an average annual bill of nearly £14,000, if they can find a child care setting that opens during the hours that they need to work. In the current climate, in which people are expected to work longer and harder for their money, 50 hours of child care is the bare minimum. Anyone who is not working regular hours, as the hon. Member for South Northamptonshire said, would need the flexibility of having someone come to their home, or a very flexible childminder. That might be manageable for a child under two, but things get much more complicated with children above that age who are looked after outside the home.

Just over a year ago, I called for child care to become a top priority, and it is heartening that we are having more debates on the issue, but talking about it does not mean that the Government are getting it right with the offer of so-called tax-free child care. I will not repeat the arguments made by my hon. Friend the Member for Newcastle upon Tyne North, but the Government’s offer depends on how much people spend, and it is complicated for people to understand. I know a number of people on low incomes who have a simple approach to the tax system and who will find the proposal complicated. They will not benefit to the same extent because of the amount of child care that many of them will access because of their working hours.

I represent one of the youngest parliamentary seats in the UK. More than a fifth of residents are under 16 and more than a third, about 34%, are under 24, so child care is a big concern. I am stopped on the streets of Hackney South and Shoreditch by mums, childminders and others who want to raise that concern. When I ask any working parent what the toughest part is, they say that it is sorting out the child care, which is a logistical challenge as well as a financial challenge. I know that, because I am a working mother of three, and I am lucky to be well paid enough to buy in that flexibility. For anyone who does not have a salary as generous as mine, buying in that flexibility is very difficult.

Nationally, we know that 70% of working parents do not work nine-to-five Monday to Friday, and in London, because of the journey times, doing a full day’s work means long and expensive child care, if parents can get it. We have the most expensive system in the world. The review proposed in new clause 1 could consider examples from around the world. In Denmark, a day care Act means that local councils provide child care for all between 8 am to 5 pm, with parents and the Government—this is where new clause 1 would come in—contributing to the cost. Child care is free for families on the lowest incomes. The subsidy is tapered, depending on the family income—in this country, it would need to be done sensibly through the tax and tax credit systems—which means that three quarters, 76%, of Danish women are working. That is a huge improvement on the number of women working in the UK. I will touch on the points made by the hon. Member for Enfield, Southgate (Mr Burrowes) on women wanting to stay at home, but we need women to be economically active. This is not just about child care, but about giving women their rightful place in the work force. Hearteningly, women outnumber men in the Chamber at the moment. I applaud my male colleagues of all parties for being here, because this is not just a women’s issue. Women who play their equal role in society and in the work force are more satisfied, better role models and better parents as a result, if we make things as stress free as possible, which is about providing flexibility.

[Andrea Leadsom]

That is such a sweeping statement. It completely undermines those women who choose to do the utterly groundbreaking and profoundly valuable job of staying home to raise their children. The hon. Lady is not being fair to those people.

[Meg Hillier]

I will come to that point in a moment. I am saying not that women who want to stay at home and who can afford to do so should not make that choice, but that it is important that women have the choice to work and to be economically active and play their full role in society in that way. Even women who stay at home to look after their children for a period of their child’s early years may well need or want to work at a later stage. That choice is therefore important whatever stage we are talking about. We should not conflate being at home with a very young child under five with being at home all the time. Under the hon. Lady’s Government’s benefits system, parents have to work or they will seriously lose money, and their children will be pushed into greater poverty.

In Hackney South and Shoreditch, women’s average earnings are higher than men’s, which shows what could be achieved if that was applied across the workplace. A decent universal system of child care will pay for itself in the long run. More parents working and paying taxes, and not claiming tax credits and benefits, more than pay for the state’s investment. I do not speak for my party on this, but I hope that those who do take that mantle and look towards the overall goal of a universal free child care system that will pay for itself. That is an aim we need to work towards. If the Government agree to new clause 1, we will be set on a cross-party basis along that route. It would not solve the problem overnight or mean that things will be easy, but it would mean that we can look closely at the options.

As I have said, child care costs in London are higher than in the rest of the country. I will not go into the details but, for instance, a nursery place for an under two is £140 a week typically in London compared with a UK average of £109. I know many people who pay a lot more than that. There is an idea that people have choice, but it is not often the case. Many parents take the option of what is available at the time, which is why we need to provide incentives at the supply end.

I have a couple of suggestions that the study proposed in new clause 1 could consider. It could examine the idea of a London weighting in universal credit for the provision of child care. It could also consider more family-friendly approaches by employers. Practices such as working from home arrangements and on-site nurseries could be fuelled by tax breaks. Speaking as a member of the Public Accounts Committee, we would clearly need to monitor that to ensure that it was not abused, but the brilliant brains in the Treasury, including the Minister’s, could probably work through such a system.

We need to push private and public sector providers to extend the hours available to parents, particularly late in the evening and weekends. That could happen through a tax incentive or a tax break system. There are an awful lot of opportunities. The Minister is nodding. I am sure that she, as a working mum, will recognise the challenges and needs.

I commend to colleagues the London cost of living report by the London assembly Labour group. Although it is a Labour report, it can be read by other parties. I read it as a cross-party report. The Institute for Public Policy Research has done a big bit of work on child care. It has found that directly funding child care facilities, which happens in other European countries, can function better for parents and be more cost-effective, because there is a guarantee of a place. We have to monitor and ensure that the money is not wasted, but it would mean certainty for the supplier, which means certainty for the parent trying to buy.

I want to pick up on some of the comments made by other hon. Members. The hon. Member for Enfield, Southgate talked about the importance of informal child care and I think we would all agree with that. Any parent will use informal child care at some point, whether for an evening out or as part of a longer-term arrangement with grandparents. Let us be honest, though. Not every grandparent wants to take on child care. I meet grandparents, and those whose own parents are caring for their children, who say that they do not necessarily want to take on child care but feel they should to support their child. Many of those grandparents are young and give up work to look after their grandchildren. That is fine if it is a matter of choice, but it is a real issue if they feel they have to step in because of the lack of availability and options. There is a danger of creating generational issues. For every individual who wants to work but cannot, we reduce the tax take. We need to bear that in mind.

--- Later in debate ---

[Andrea Leadsom]

It is a great pleasure to follow the hon. Member for Hackney South and Shoreditch (Meg Hillier), with whom I agree on many aspects of early years.

The first thing I want to say is that children are everything to those of us who have them, and to those of us who have young nieces, nephews and grandchildren. Children are at the centre and heart of our world. They make incredibly selfish human beings become extraordinarily unselfish. It is when a child is about to get run over that a parent gets superhuman strength to push them out of the way. People are capable of the most enormous sacrifices for the sake of their children. It is clear to us all that top quality child care is vital.

In my case, with three kids of my own—aged 18, almost 16 and 10—I have had just about every form of child care that can be imagined. I was fortunate to start off with my stepfather acting as my nanny until my second son was five years old. Therefore, I thoroughly recommend informal child care. There are not many childminders who will take two little boys out—one in a backpack, one in a frontpack—and explain to them for hours what a worm cast is, build little toy forts and play with toy cars. Even today, I cannot get to Parliament until I have dropped one off at a friend’s, sorted out another with some A-level revision and got the third out of his bed, basically. For us, particularly mums, our children and the child care at whatever age they are—I talk to people with older children who are still looking for food, money or a taxi service—are at the centre of our lives. We all spend a lot of time thinking about the safe and happy lives of our children. Child care is a vital part of whatever we can offer to support those at work in our society.

We also need to support thoroughly the choices that families want to make. They may want an au pair and to deal with someone who is living in and who, perhaps, does not speak very good English. I asked one au pair I had to make a salad. She peeled some parsnips and gave us the peel, nicely dressed, as a salad. That was an interesting one. There are also childminders although, sadly, not nearly enough of them. There is also the formal child care setting; some truly superb, others truly awful. Unfortunately it was the formal child care setting—the nurseries—that led to the old joke about “hair or care”; in other words, someone not smart enough to be a hairdresser could try to become a nursery nurse. That was the reality 10 years ago where some young girls—themselves barely out of their teens—would become the carers looking after our very young children in nurseries. Care for our children comes in all shapes and sizes.

I also want to say a word on behalf of those heroic mums—I would have loved to have been one—who have stayed home and looked after their children themselves, giving up potentially lucrative, satisfying and successful careers. They might feel very depressed about their lack of self-worth, certainly in the eyes of too many politicians. I want to pay tribute to those women who decide to stay home and raise their own children.

[Meg Hillier]

I just want to go back to the point about au pairs and others. Will the hon. Lady acknowledge that with the cost of housing and the overcrowding in many cases in London, the idea of someone living in your home is not an option, which is why the formal setting is particularly important in a city such as London?

[Andrea Leadsom]

Yes of course I agree. My point was merely that child care comes in all shapes and sizes. My real point is that we should support the choices that families want to make, which are the best choices for them. That is particularly why I am so delighted that the Government have introduced shared parental leave. What more choice could there be for a woman who perhaps is earning more than her husband than to be able to decide to go back to work in the knowledge that he will be doing that critical early part of the child care? That is a huge tribute to the Government and many families will be delighted. It will be life changing for them.

Another area for which the Government deserve a lot of credit is the introduction of the early years professional status, particularly to deal with the quality of child care. I have been told by the Under-Secretary of State for Education, my hon. Friend the Member for Crewe and Nantwich (Mr Timpson)—who is Minister for children—that early years professional status will require a great deal of training. It will involve learning about the importance of secure attachment, about how the brain of a baby develops, and about how vital it is for the baby to receive loving, attentive care, whether that care is provided by parents or in a formal setting. As the hon. Member for Hackney South and Shoreditch (Meg Hillier) pointed out, when life at home is devastatingly awful because of domestic violence, bereavement or drug or alcohol misuse, the attachment needs of a baby may be far better met in a formal child care setting than at home. What is really important is choice and good quality.

Another enormous tribute should be paid to the Government for the creation of childminder agencies. I know that that has been a contentious issue, but I believe that children’s centres that adopt childminder agency status can serve as signposts for all families who seek child care. They can provide ongoing professional development for childminders, many of whom have felt unloved and uncared-for over the last few decades—which, along with over-regulation, has been their reason for leaving the business. The agencies can help childminders to understand regulation, to become established, and to provide the top-quality care that they so want to provide.

[Meg Hillier]

I thank the hon. Lady for being so generous with her time. Childminders have told me that their main fear is that childminder agencies could replicate the private sector company model for older people’s domiciliary care, creaming off a profit from childminders’ salaries and not delivering a good service. The hon. Lady has described an entirely different model. Does she have any inside information about what will be announced?

[Andrea Leadsom]

I do not, but I can tell the hon. Lady that I have been lobbying the Minister, and telling him that children’s centres could play a fantastic and very appropriate role if they became childminder agencies. I think that the support, encouragement, training and quality control that they could offer would be good for childminders, and it would certainly be good for families.

What else have the Government done for families? They have done an enormous amount. Child care tax credit has been given a huge boost: a contribution of up to £2,000 per child will greatly help families to make the right child care choices. Even more significant is the increase in the tax-free personal allowance, which has put an enormous amount of money back into the hands of taxpayers, and which will benefit working families of all shapes and sizes. As was pointed out by my hon. Friend the Member for Suffolk Coastal (Dr Coffey), the fuel duty freeze has made the cost of living for families lower than it would have been under the Opposition.

But what have we really, fundamentally done for our children—the children who are at the heart of everything that we do? We have paid down the deficit by a third, which is no inconsiderable feat. Why is that so important? As a result of the financial crisis and the Labour Government’s overspending, we put ourselves in a position in which we stole not just from our children, but from our grandchildren. We mortgaged their future. This Government have paid down the deficit significantly, with the intention of clearing it altogether so that we can start to reduce the debts that our children and grandchildren would otherwise be paying. We have been able to keep the cost of borrowing down, because we had a credible plan for returning strength to our economy. That has enabled all families with mortgages to keep down their borrowing costs, and has been a huge boost to families that is never talked about.

What is the payback? Our economy is the fastest-growing in the developed world. Wages are rising faster than they have done for seven years—that was announced today—and the private sector has created 1.6 million new jobs. That means that well over 1.5 million new families are finding work, and are able to meet the needs of their household budgets.

--- Later in debate ---

[The Economic Secretary to the Treasury (Nicky Morgan)]

It is a pleasure to serve under your chairmanship, Mr Amess, and I thank all Members who have spoken in this debate. After a rather partisan opening speech, the debate improved and we had a genuine discussion of views, which will no doubt carry on throughout the Committee stage of the Finance Bill. We will also be able to discuss child care measures in greater detail later in the year.

I take on board the comment of the hon. Member for Hackney South and Shoreditch (Meg Hillier) that there is a certain irony in the fact that all of us in the Chamber debating this matter today have children yet we are discussing this rather than spending time with them. If my son were here at the Dispatch Box, he would be very opinionated and have plenty to say on the subject of what I get up to, and I suspect that applies to the children of other Members.

New clause 1 asks the Government to conduct a review of the affordability of child care, but while Opposition Members are proposing yet another review, this Government are taking action, and have taken action, to address the rising costs of child care faced by families.

Before I address the Opposition new clause, let me briefly set out this Government’s approach to supporting parents with their child care costs. As the hon. Member for Hackney South and Shoreditch said, we on this side of the House believe in the importance of flexibility. We do not want to prescribe any further the number of hours that families should have. We want there to be full flexibility, and that is one of the advantages of the tax-free child care provisions this Government are suggesting. Parents and families will be able to build up credits in accounts and will then be able to spend them in the way that suits them best.

[Meg Hillier]

The flexibility of provision is as important as the flexibility of payment. It is no good talking about flexibility if the child care provider does not provide it or does not provide the number of hours and length of day needed, whether long or short. What are the Government planning to do about that?

[Nicky Morgan]

I take that point on board. I shall come on to talk about the number of child care places, but the hon. Lady is right: flexibility in all sorts of different ways is what is important. Having the money in an account that the family can decide how to spend is an important part of the policies we have introduced.

My hon. Friend the Member for Enfield, Southgate (Mr Burrowes) was absolutely right to say that this was all about choice. The hon. Member for Houghton and Sunderland South (Bridget Phillipson) talked about maternal employment. That is a debate that we need to have in this country. We know from various surveys conducted by the Department for Education that some mothers want to work, and some need to work. Many of those who need to work find child care costs a barrier to going to work. That is why it is so important to have this discussion.

Child care costs are a major part of most working families’ budgets. Figures from the Family and Childcare Trust show that, between 2002 and 2010, child care costs increased by around 50%. The Government have therefore taken action to tackle those rising costs. We have funded 15 hours a week of free child care for all three and four-year-olds, and extended that offer to the 20% most disadvantaged two-year-olds. We are now extending it further so that, from September 2014, about 40% of two-year-olds will be eligible. As my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) pointed out, the Government have also increased child tax credit to £3,265 a year, which is £420 a year more than it was at the last election, representing a rise significantly above inflation. We have also introduced shared parental leave.

The Government are also taking action to drive up the supply of high-quality child care provision—for example, by legislating for childminder agencies, which will make it easier to set up a childminding business; making it easier for schools to change their school day and encouraging primary schools to open for longer; and reducing bureaucracy and red tape for providers. Encouragingly, the most recent information shows that costs in England have stabilised. The National Day Nurseries Association has reported that the average fee increase across all nurseries was 1.5%, which was well below inflation. The latest survey from the Family and Childcare Trust shows that the cost of after-school clubs in 2013 was £49.71 per week, and that in 2014 it is £48.40. Also, the cost of childminders’ after-school pick-up was £72.79 in 2013 and it is now £64.75—a 12.8% reduction in real terms. Opposition Members have talked about the availability of child care places, but it is worth noting that the number of child care settings rose from 87,900 in 2010 to 90,000 in 2011. This equates to 2 million early-years places, or a 5% increase on 2009.

My hon. Friend the Member for Enfield, Southgate talked about informal child care, and he was right to suggest that that is an important subject. A number of families rely on grandparents and other family members to provide child care, and it is important that we recognise that. However, I also have sympathy with the view that formal child care settings are important. We need to know that our young children are ready and able to go to school. I am not saying that that cannot happen in an informal child care setting, however. As I have said, it is a question of choice and flexibility.

Let me now turn to new clause 1, which asks the Chancellor to publish a review of the affordability of child care costs. We believe that such a review is unnecessary, because in addition to the actions I have already outlined, the Government announced a new scheme in Budget 2013 to help working parents with their child care costs. I do not know whether the hon. Member for Hackney South and Shoreditch really meant it, but she said that the review would “not tie anyone to anything much”. Actually, that is part of the problem with the proposal. We want to get on and bring in our provisions as soon as possible.

[Meg Hillier]

What I meant was that the review would not require the Government to act on its findings. However, it would give us all a basis on which to argue about what was best for local people and, I hope, reach consensus. It would not stop the Government doing what they were already doing, but it could open up other opportunities.

[Nicky Morgan]

I believe that some of those policy issues will come out in the debates that we are going to have on tax-free child care. Rather than postponing our activities while we have yet another review, I want to get on and make progress. I want families to know that we are serious about listening and helping them with child care costs and the availability of places.

We have consulted widely on the detail of the scheme. More than 35,000 responses were received to last year’s consultation, and we have listened to that feedback. On 18 March this year, we published our response to the consultation on tax-free child care. This was welcomed by families and child care providers around the country, and as a result of the consultation, we are rolling out tax-free child care more quickly than had previously been announced. It will be launched in autumn 2015 and rolled out to all eligible families with children under 12 within the first year of the scheme’s operation. That is significantly faster than previously announced, as children under 12 would have gradually qualified for the scheme over a seven-year period.

The Government will also now provide 20% support on child care costs up to £10,000 per year for each child via a new simple online system. The cap had previously been set at £6,000. That means that families could receive up to £2,000 child care support per child—two-thirds more than originally planned.

We expect that tax-free child care will be open to at least twice as many families as the current employer-supported child care scheme. At the same time, we announced that all families eligible for universal credit will benefit from additional support at 85%, rather than just taxpayers as previously consulted on. We have also announced £50 million for an early-years pupil premium to help improve outcomes for the most disadvantaged three and four-year-olds in Government-funded early education. Taken together, the Government’s child care offer will provide flexible support for all eligible working families while maintaining free, universal early education support.

The Government are also taking wider steps to support hard-working families. The income tax personal allowance will rise to £10,000 in 2014-15, and in the Budget we announced a further increase to £10,500 in 2015-16. That is a tax cut for 25 million people. Since 2010, this Government will have taken 3.2 million people on low incomes out of paying income tax altogether. It is worth noting that of that 3.2 million, 56% are women, which is something to be recognised and welcomed.

The Government have also helped local authorities freeze council tax in every year of this Parliament, and we have taken action on fuel duty, saving a typical motorist £680 by 2015-16. The shadow Chief Secretary to the Treasury talked about the fuel duty cut being a theoretical cut. Perhaps he would like to chat to the shadow Economic Secretary who quoted from the Asda Index, which showed that families now have slightly more discretionary income to spend per week, and it attributed that to a fall in motoring costs—[Interruption.] I suggest that the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) read the press release, as it made encouraging reading.

The changes suggested in new clause 1 are unnecessary and would not help hard-working families with the cost of child care. The Government have already reviewed how best to improve child care through the Childcare Commission, which was launched in June 2012. We do not need another review. We need to take action now to support hard-working families, which is why we are supporting parents through tax-free child care and universal credit. More people than ever before will be eligible for that support. We have consulted widely on these changes, and our proposals have been welcomed by families and providers around the country. I therefore request that new clause 1, which was tabled by Opposition Members, be withdrawn.

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.

Oral Answers to Questions

Meg Hillier Excerpts

Tuesday 28th January 2014 Commons Chamber

[Mr Osborne]

The British business bank is lending to intermediaries that support non-bank lending to small firms. [Hon. Members: “How many?”] There was no British business bank before. The only bank that the Opposition helped to take into public ownership was the Royal Bank of Scotland, because they completely failed to regulate it.

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

One of the ways that the Treasury can help small businesses is by giving them a better chance of winning Government contracts. What is the Chancellor doing to use his Department’s clout across Whitehall to ensure that those contracts are not just snaffled up by the big guys?

[Mr Osborne]

That is a huge challenge for any Government and any bureaucracy, but I am pleased to report that under this Government, because we have focused all Departments on trying to increase their procurement from small firms, that has gone up from around 10% to around 20% of Government procurement. That is a big step forward, but I am the first to say that the job is not done. We want more procurement from small firms, not least because they are often the most innovative and entrepreneurial in the country.

Crowdfunding and the FCA

Meg Hillier Excerpts

Wednesday 18th December 2013 Westminster Hall

[Dr Julian Huppert (Cambridge) (LD)]

Thank you for calling me to speak, Mr Chope. I will try to be brief. I congratulate the hon. Member for Huddersfield (Mr Sheerman) on securing this important debate. I also pay tribute to my noble Friend Baroness Susan Kramer, who did a lot of work in this area before her elevation to a ministerial role, which has somewhat curtailed it.

The sector is huge; we can read about just how big it is in the excellent “The Rise of Future Finance: The UK Alternative Finance Benchmarking Report”. I am delighted that Cambridge was able to play a part in that; £939 million is a large sum of money. The sector is also incredibly varied. In my constituency, for example, SyndicateRoom is doing equity crowdfunding, and the Future Business Centre is using social impact bonds to build an entire building for social enterprises. RealVNC, a software company, was set up though merchandising; it sold products with its logo on to get the money to build a better product. There is also Frontier Developments and its game, “Elite: Dangerous”. Those are all crowdfunded. The area is so varied that there is a huge challenge for regulation.

The sector must be regulated to avoid problems—none of us wants to hear the story of the granny who loses all her savings on something like that—but we must ensure that the regulation is not disproportionate. We must ensure that we have principles regulation, not firm tracks that lock everyone down and kill off the excitement, as the hon. Member for Huddersfield said. That is my aim.

The Government are supportive; I will finish with a quote from my right hon. Friend the Secretary of State for Business, Innovation and Skills in response to the excellent benchmarking report, “The Rise of Future Finance”:

“Alternative finance is playing an increasingly important role in helping businesses access the finance they need to grow and contribute to the economy.”

Let us ensure that that can continue.

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

rose—

[Mr Christopher Chope (in the Chair)]

I shall call the Minister now. If the hon. Lady wishes to intervene, it will be up to the Minister.

[The Financial Secretary to the Treasury (Sajid Javid)]

Welcome to the Chair, Mr Chope. I, too, congratulate the hon. Member for Huddersfield (Mr Sheerman) on securing this debate, and on the important work that he does as chair of the Westminster crowdfunding forum. I share his enthusiasm for crowdfunding and the peer-to-peer alternative funding platforms that he mentioned. I cannot think of a single thing he said that I disagree with; it is quite rare for me to say that to him. I say that not in a spirit of good will because it is close to Christmas, but because I thought he talked a lot of common sense. Clearly, he knows a lot about the issue, and I hope that he stays involved in it for a long time to come—it sounds like he will—because I think he can add great value to this area.

Small and medium-sized enterprises are a vital part of the UK economy and contribute significantly to economic growth, as we have just heard. In particular, access to finance is important to ensure that businesses reach their full potential. At times when there are greater constraints on credit, alternative finance markets, including crowdfunding, become even more crucial. That is why crowdfunding, though it may be a relatively new industry, is growing quickly.

[Meg Hillier]

May I draw the Minister’s attention to a donation-based crowdfunded organisation called Turning Earth in my constituency? It raised more than £13,000 through Crowdfunder and sells work spaces and classes in pottery. It says that, critically, the money levers in other money, because there is confidence in the community that the organisation will work. Does that not do something to tackle the asymmetry of banks, which are frankly letting down small businesses, and the challenge of funding small businesses?

[Sajid Javid]

The hon. Lady is right. There are examples of banks letting down small businesses. That shows the power of crowdfunding. I had not heard of Turning Earth before, but I am glad that she has brought it to my attention. I will take more interest in it now. If I heard her correctly, she mentioned that it has already raised £13 million—[Interruption.] Oh, £13,000. Well, that is an excellent start. There is great growth potential in that number.

Over the past two years, in total, more than £700 million has been lent through peer-to-peer platforms. There has been a 600% increase in equity platforms between 2012 and 2013, raising approximately £28 million this year. There has been significant growth in debt-based security platforms of more than 370% in a year, raising almost £26 million over the past three years.

The crowdfunding market has huge potential to expand much further, and the UK has a strong global position in crowdfunding investment. Like the hon. Member for Huddersfield, I am keen to ensure that we maintain and grow that position. As such, the Government have taken a number of steps to support this burgeoning industry. We have invested £30 million in peer-to-peer platforms through the business finance partnership: £20 million has been provided to Funding Circle, which facilitates loans to small businesses, and £10 million has been provided to Zopa, which has facilitated £432 million of lending since its launch in 2005.

Our generous tax reliefs, granted through the seed enterprise investment scheme, are widely used by equity platforms. Some platforms have reported that 80% of investors are using that scheme, which provides an important incentive for investors to invest in smaller, perhaps riskier businesses, allowing them to grow.

[Meg Hillier]

One of the FCA’s considerations is separating the sector into debt crowdfunding and equity crowdfunding. I represent Seedrs, which is based in Shoreditch and does a great deal of good work in this area. The sector is very diverse, so will the Minister comment on whether the Government desire to keep that diversity while ensuring that there is regulation, without making false divides and pigeonholing the diverse crowdfunding industry into the categories of debt, equity or, indeed, donations? Donations are not within the FCA’s remit at the moment.

[Sajid Javid]

I thank the hon. Lady for her intervention. I am just about to address regulation; that might help to answer her question. This is also a good opportunity to pay credit to Shoreditch as an area that is heavily involved in crowdfunding. It is a growing space, and I would like to see it continue to grow.

We listened to the peer-to-peer side of the industry when it asked about regulation. We are working with the FCA to regulate that side of the industry and develop a proportionate framework. The framework has been well received by the peer-to-peer industry. Although the equity and debt security side of the crowdfunding market is already captured by some regulation, it is keen for a more tailored framework. The platforms’ view is that regulation provides them with credibility and helps to attract investors. They actively lobbied the FCA for inclusion in the consultation, and we supported them to achieve that goal.

Although we recognise the importance of regulation for the industry at the request of the platforms, it is essential that regulation be proportionate, as all hon. Members have said, if we are to ensure that it does not stifle the market’s growth. The Government therefore continue to work with the platforms and the FCA to ensure that the optimum framework is implemented—a framework that satisfies the industry, provides increased certainty to investors, and enables the crowdfunding industry to continue on its upward trajectory.

Before I close, I would like to say that having proportionate regulation is also key to ensuring that there are no unnecessary barriers to entering the industry. One of the industry’s successes over the past few years has been the very light barriers to entry. The Government and the regulator are keen to ensure that we have regulation that is proportionate enough to achieve the objective of protecting consumers, both borrowers and lenders, without creating barriers to entry that make the industry grow at a slower pace or stifle growth.

[Meg Hillier]

I welcome the Minister’s comments, because some years ago I called for regulation, but not to such an extent that it might put people off. Perhaps he can write to us if he does not have this information. NANA in my constituency is a café run by older women that was funded through donations on Kickstarter. Nana is located in former toilets on Chatsworth road in Homerton, and people fund it by buying a tea towel or donating a cheque. At the moment, the FCA is not considering the regulation of that sector. Does the Minister have any information on whether regulation of the donation sector will at any point be considered by the FCA or the Government?

[Sajid Javid]

As the hon. Lady kindly suggests, I will write to her and take a closer look at what plans the FCA does or does not have.

Oral Answers to Questions

Meg Hillier Excerpts

Tuesday 14th May 2013 Commons Chamber

[Danny Alexander]

My hon. Friend rightly draws attention to the figure of £28 billion—the extra borrowing in the alternative Queen’s Speech put forward by the Opposition. It confirms yet again that their approach is to borrow more and more, taking no account of the consequences. Perhaps that is one reason why the Leader of the Opposition, in a well-known radio interview, refused to accept that his party would increase borrowing and why his proposals have rightly been dubbed a “Milishambles”.

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

Research by the House of Commons Library shows that no peacetime Government since the 1920s have presided over fewer housing completions than this Government over the past two years. When will the Chancellor and his team stop tinkering with allowing a few people to buy new homes, and instead deal with the systemic problems by increasing housing supply?

[Danny Alexander]

The hon. Lady should study the figures more carefully. They show that the low points in housing starts and housing provision were in 2009 and 2010 respectively—both years in which her party was in office.