Amendment of the Law

Debate between Meg Hillier and Brian Binley

Thursday 19th March 2015 Commons Chamber

[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.