Independent School Fees: VAT

Paul Scully Excerpts

Wednesday 21st February 2024 Westminster Hall

[Paul Scully (Sutton and Cheam) (Con)]

It is a pleasure to serve under your chairmanship, Mr Henderson. I congratulate my hon. Friend the Member for Northampton South (Andrew Lewer) on securing this debate.

I draw the attention of the House to my entry in the Register of Members’ Financial Interests. I will declare an interest of three types: my partner is the headteacher at a prep school; she also owns a house that backs on to one of the best-performing state schools in Surrey, so inevitably her house price will go up when selection for that school becomes selection by house price rather than by academic achievement or fees; and I myself went to an independent school—my father paid a fortune for this accent.

I would say two things about this. Economically it is not sensible, and educationally it is not sensible either. Prep schools in particular are already a fragile ecosystem, and most have around 150 to 250 pupils. My hon. Friend the Member for Northampton South talked about an impact assessment of what happens if a few pupils drift away. I will tell hon. Members what happens if 10 or 15 pupils leave a fragile prep school. That school is perhaps not paying market price for its teachers’ salaries, and it has already opted out of the teachers’ pension scheme, which accounts for around 28% of salaries.

Independent schools are the only ones paying in—it is a Ponzi scheme—and some actuaries predict that that figure will go to 40% because there will be more failures. If 10 or 15 pupils leave that sort of school, it collapses. There will then be 150 pupils who have to get educated under the state system in that area, which may be a rural area with a small state school. There may be 1.1 million vacancies in state schools around the country, but they are not equally distributed: something like 20% of secondary schools are over capacity. Those are the best ones—the ones that people want to get into.

Prep schools are already fragile. Those that go up to 13 are already having to change their business models. This policy would be another nail in the coffin of pupils’ aspiration, as we have already heard. It would not lift life chances; it would just set one group of children over another. The small amount of money that that broad change will raise will not be as meaningful as the Labour party thinks. It is better to look for other, more collaborative ways, but let us not destroy the partnership working that we have heard about. Let us not destroy the work around using different sites, sporting facilities, expertise and skills.

The IFS report states that private schooling tends to be concentrated among those with the most income and wealth, but “tends to” is doing a lot of heavy lifting there. A lot of people struggle to ensure that their children get a better education, and we should reflect on that. The shadow Secretary of State for Education, the hon. Member for Houghton and Sunderland South (Bridget Phillipson), should go out and meet some headteachers.

Loan Charge

Paul Scully Excerpts

Thursday 18th January 2024 Commons Chamber

[Sara Britcliffe (Hyndburn) (Con)]

This is such an important issue for our constituents and I am very grateful to the right hon. Member for East Antrim (Sammy Wilson) for bringing it to the House. It has been mentioned that, given the recent examples that have exposed excesses of power in public bodies, it is only right that the loan charge and the way it is infringing on the rights of individuals is debated in this House. One particular case in my constituency brought this issue to my attention, and it highlights several problems with the way HMRC has tried to combat disguised renumeration schemes through the loan charge.

The way in which HMRC is retrospectively trying to obtain income tax and national insurance contributions raises important questions. The first of them is that the law on tax should be knowable and accessible to the people to which it applies. Based on the case that I have seen in my constituency, that was clearly not the situation. Many individuals who worked for agencies simply did not know that their pay would one day be subject to a disputed tax argument with HMRC, because the loan charge did not exist or because they were mis-sold such schemes by hiring agencies. Added to this fundamental trespassing on the rights of individuals is the fact that we cannot continue with the situation whereby a public body is pursuing retrospective actions against our constituents with them having no right to due process.

[Paul Scully (Sutton and Cheam) (Con)]

First, I thank the right hon. Member for East Antrim (Sammy Wilson) for his kind words about my time as postal affairs Minister.

My hon. Friend is making the point that this is a really good example of why retrospective policy is not a good idea. There is the fact that HMRC needs to use its investigatory powers, which outstrip those of policemen, proportionately; the fact that it should be going after the practitioners and promoters of these schemes, which it can do under the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021 that I passed a few years ago; and the fact that it should not be going after contractors, consultants and self-employed people who the Government and many Government institutions treat as tax evaders as the default, as was seen with the 3 million excluded during covid who felt they did not get the support that others did.

[Sara Britcliffe]

That brings me to one of my main points. These are ordinary workers. These are our constituents. They are not fat cats; they have not got offshore bank accounts. They are not like that. These are ordinary members of the public who desperately need our help.

That brings me on to another point, which is how HMRC is handling these cases. It is not unfair to say that it is hardly a lesson in how to handle dispute resolution or customer service. One of my constituents received a letter some four or five years ago telling them that HMRC was withdrawing the information notice it had sent in the post. As far as my constituent was concerned, that was the end of the matter and they could get on with their family life. There was no contact for a further three years, but now HMRC has informed my constituent that withdrawing an information notice is not the same as withdrawing its concerns and that, in any event, it is not aware of the reason for the withdrawal in the first place and it would like to revisit the matter. I say to Ministers that the situation is untenable. HMRC cannot have the power to suddenly request tens of thousands of pounds from individuals, appear to drop a case and then revive it on a whim, without any explanation at all. That is an exercise in excessive power by a public body.

We should be going after the disputed tax from those who promoted and operated the schemes and who made huge amounts of money doing so. I understand that might be more complex, but that should not be a barrier. We should be protecting ordinary workers from abuses of power and pursuing those opaque and monied bodies that sought to game the system. I will end on that note. I echo the point that these are ordinary people we are trying to assist. It is time that the Government acted.

Mortgage Prisoners

Paul Scully Excerpts

Thursday 6th June 2019 Commons Chamber

[Paul Scully (Sutton and Cheam) (Con)]

There have been some differences of opinion on how to pronounce Cerberus. I am going to go with Cerberus, the hound of Hades, but of course that will be a moot point by the time people read this in Hansard.

I congratulate my hon. Friend the Member for Dover (Charlie Elphicke) on securing this debate from the Backbench Business Committee, and on the fantastic work that he has been doing with colleagues, and with the Opposition Member, the hon. Member for Feltham and Heston (Seema Malhotra). This has been a truly cross-party initiative, to raise the issue of the some 200,000 people affected by this problem across the country. I know that the Minister is listening, and I know that, judging by our past discussions and debates, he has been open to solutions—and looking for solutions—to tackle the difficult banking issues that he has to cover within his remit.

In the Gallery today there are several mortgage prisoners, including my constituent Juliet Peddle. Juliet and her husband took out her mortgage back in 2002 with Northern Rock, and every two years she was able to transfer automatically on to the lowest two-year rate; so she was always going to have that automatic review, ensuring that she had as affordable a mortgage as possible. When Northern Rock failed, she ended up, after the various exchanges, with Cerberus. I am not sure that Juliet knows—I certainly do not—how it was decided which mortgages went down which route, so that some ended up with Cerberus. It seemed to be a bit of a lottery. It means that she and her husband, like many other self-employed people—her husband is a self-employed black cab driver—are locked into the affordability rules, mainly because Cerberus does not have any alternative products. There is nowhere else for her to go within the company.

The BBC alleged in a 2018 “Panorama” programme that Cerberus had told the Government, before it made its bid for the Northern Rock loan book, that it intended to offer better mortgage deals and evolve into a challenger bank. I am interested to know whether the Minister has any insight into whether that offer was actually made. If it was, it clearly has not been adhered to some three years later.

We have heard why this has happened. The Government reforms back in 2014 allowed lenders to waive the affordability requirements for new and existing customers who were remortgaging but not increasing the size of their debt. Unfortunately, as we have also heard, the EU mortgage credit directive, which came into force in 2016 and with which we have to comply until at least 31 October—this is not my leadership bid—prevents lenders from waiving the requirements when a borrower moves to a new lender. That undermines the Government’s reforms by further restricting how mortgage prisoners can or cannot move in terms of their future mortgage. We know that, at present, lenders are able to waive affordability requirements only for existing customers, which does not help Juliet.

We have talked about the voluntary agreement that the FCA has built up and to which 67 lenders have signed up, but again, because Cerberus does not have alternative products for her and her husband to move to, it will not help Juliet. I am interested to hear what the Minister can say to Juliet and all the other mortgage prisoners here today and across the country who are desperate for help. Many of them can afford to keep up their payments, but why should they be paying three times the rate that the rest of us can pay on the open market? It needs to be fair, and it needs to be a level playing field. I hope the Minister will have some answers for Juliet and the Members who have raised this issue today.

Oral Answers to Questions

Paul Scully Excerpts

Tuesday 5th March 2019 Commons Chamber

[Mr Hammond]

I understand the hon. Gentleman’s point and I know he speaks sincerely and from the heart on these matters, but my view is that we have a huge amount of pent-up investment that has not gone ahead over the last two and a half years because of uncertainty. Once we can provide clarity to British business about our future, which we do by supporting the deal that my right hon. Friend the Prime Minister will be bringing forward next week, we will unleash that investment, allowing Britain to achieve its rightful potential as one of the world’s leading technology powers.

[Paul Scully (Sutton and Cheam) (Con)]

18. New technologies enabling us to work from anywhere and at any time are bringing an end to the traditional, rapidly declining nine-to-five. To make the most of this, we need to harness such advantages to work smarter rather than just harder. How is the Treasury investing in enabling people to become more productive and to work more flexibly?

[Mr Hammond]

I started work in 1977 and I am not sure I ever remember that traditional nine-to-five, but the Government are helping people to be more productive and work flexibly by committing over £1 billion of public money to next-generation digital infrastructure, including full fibre broadband and 5G. Obviously, the primary investment will come from the private sector, but the public investment ensures that those parts of the country that would not otherwise be served because they are not commercial can share in this important technology. We are also supporting workplace productivity in other ways, including by investing £56 million to help small businesses to develop leadership and management skills in partnership with “be the business” programme.

Santander Closures and Local Communities

Paul Scully Excerpts

Thursday 14th February 2019 Westminster Hall

[Paul Scully (Sutton and Cheam) (Con)]

It is a pleasure to serve under your chairmanship, Mr Davies. I add my thanks to the hon. Member for Glasgow East (David Linden) and congratulate him on securing this debate. I am delighted to support him. As my hon. Friend the Member for Angus (Kirstene Hair) said, bank branch closures affect the constituents of hon. Members on both sides of the House. It is important that we stick together to represent people and stand up for the most vulnerable in our society.

In 2016, not long after I was elected, I was faced with a couple of bank closures in my constituency, in Cheam. The high street there thrives on independent shops. First, Lloyds Bank came to the end of its lease. I would give the constituent of the hon. Member for Heywood and Middleton (Liz McInnes) the same counsel that I gave my constituents who were upset about losing Lloyds Bank: vote with their feet and go to HSBC up the road. Unfortunately, just a few months later, HSBC decided to close, too. Constituents can be pulled from pillar to post, continually having to move, to chase the exodus from the high streets. Banks do not want to be the last bank on the high street, because all the focus would be on them when they eventually respond to a changing market.

I retain a good relationship with my local Santander branch in Sutton, which looks after customers of the two that are now closing. I remember a tweet that I sent to a constituent on 19 May 2016, in which I said that I had had a chat to Santander, which was closing quite a small branch in North Cheam, but was committed to its main Cheam branch. Fast-forward only three years: that branch is now closing. The last bank in Cheam will have gone.

When Lloyds Bank and HSBC were closing, residents set up petitions, but petitions only have so much value. Yes, they can show the weight of opinion and ask the banks to please be considerate, but when a banking chain has made a corporate decision, a petition will generate heat but not a lot of light, so we need to look at other ways to respond. Can we encourage customers to move elsewhere? Can we work on the post office network, despite the restrictions on that, which we heard about from other hon. Members? Are we putting an unfair burden on the post office network and the Government in relation to decisions made by corporate organisations?

In the case of the Santander closure in Cheam, three local councillors, Elliot Colburn, Holly Ramsey and Eric Allen, have taken a different tack. Metro Bank is looking at expanding its network in other areas, so they have made a direct approach to Metro Bank, saying, “Here’s a space. There are no banks. It is an area where there are a lot of independent shops. Metro Bank takes a different tack in its approach to attracting customers—it is a bit of a disruptor bank—so why don’t you come in and consider Cheam as an option?”

What more can we do? We have talked about the pressure being put on to post offices. In Sutton, it looks as though our Crown post office will be moved to WHSmith, which will cause angst and concern to a number of people there. On the other hand, not far away in Belmont, a village to the south of my constituency, a post office has just been opened at the back of a pet shop, and it is one of the best-used post offices. It won an award from the network as one of the best new post offices in London, coming second only to one on Oxford Street. That is pretty impressive. If it is put in an imaginative place, it will be used.

What more can we do? Should we look at the banking hubs and a return to the ’70s, or some form of technology to move banks from making corporate decisions to making marketing decisions, which can go a totally different way? If the bank takes a marketing decision to look at innovation, its corporate social responsibility will move the decision away from just being a box-ticking exercise for its shareholder report to being something that can actually add value to the high street and tackle the issues such as loneliness mentioned by my hon. Friend the Member for Angus. By making the high street a hub and a community centre and bringing in other businesses to work with the bank, the bank can become the centre of the high street, which has to be good for that bank.

[Albert Owen (Ynys Môn) (Lab)]

The hon. Gentleman makes an interesting point about hubs, as have other hon. Members. What role does he think the Government should play in that? We have heard about the closure of Crown post offices, which the Government own, but surely hubs could be there, because they are well located and owned by us. We are the taxpayers and our constituents need those services.

--- Later in debate ---

[Paul Scully]

The hon. Gentleman makes an interesting point. We have talked about how moving Crown post offices into WHSmith branches across the country will limit their structure, because they have some big buildings at the moment. The massive floor space of the one in Sutton is well used, so I am not sure how it will cope if it is restricted at the back of somewhere. It might be a regressive move. There is a limit to how much the Government can direct the Post Office and banks, but they must have a significant influence. They should treat the issue holistically as they look at the future of the high street in general.

We have talked about the access to banking standard. At least Santander now has to go through the process of mitigating the results and looking at who the most vulnerable people are—I hope it would want to do that anyway. The people using bank branches these days tend to be older people, who do not necessarily have access to technology or are not as good at using technology as others, and retailers, especially the independent retailers that I was talking about that are still cash-heavy and need to bank their cash.

For the two branches that are closing in my constituency, the alternatives to Cheam are 1.3 miles and 3.3 miles away, and the alternatives to Worcester Park are 1.8 miles and 3 miles away. For a small business that wants to pay cash in at the end of the day, if there is no post office near enough, that is some distance to go with what might be quite a lot of cash, which is not very secure.

[Matt Rodda (Reading East) (Lab)]

I support the hon. Gentleman’s point about the distance for small businesses. We have that issue in my constituency with the post office closure, which relates to the bank closures. There is a village a mile away from Reading town centre, a separate entity, where three banks and a post office have closed. That is a considerable amount of travelling time for a small business trying to bank cash. We have lost other banks in locations near Reading University and we have lost further facilities in other areas too.

The hon. Gentleman makes a good point about the need to look holistically at the whole parade of shops, the needs of vulnerable local people, particularly the elderly, and the needs of local small businesses. I urge him to raise with his hon. Friends in Government the possibility of an area-based approach, whereby those different needs are taken into account as part of banking or post office regulation.

[Paul Scully]

In Reading, as in Sutton, the difference in mileage is relatively small, but congestion and extra traffic mean that it represents significant travel time. We cannot compete with the 15 miles that people have to travel in the constituency of my hon. Friend the Member for Angus.

I will make a final point and then let other hon. Members speak. When banks decide to close, we have to make sure that there is still access to a cashpoint network, so people who rely on cash—although that is dying down a bit—have access to it. When I was a local councillor in the neighbouring constituency of Carshalton, I spoke to a baker who had been badly affected when Barclays and its cashpoint closed there. That village relied on its independent shops, but after the cashpoint closed, people tended to turn left, towards the larger supermarkets, rather than right, where the smaller independent shops are. Previously, people had walked past the independent shops to get their cash and would spend money in the bakers and the other smaller shops on their way to do their main shop. Branch closures have a detrimental effect and we need to look at the issue holistically to make sure that we have a thriving, albeit changing, high street.

Mortgages: Eligibility

Paul Scully Excerpts

Monday 23rd October 2017 Westminster Hall

[Paul Scully (Sutton and Cheam) (Con)]

I beg to move,

That this House has considered e-petition 186565 relating to eligibility for mortgages.

It is a pleasure to serve under your chairmanship, Mr Hollobone. The petition, which has attracted 147,307 signatures, reads:

“Make paying rent enough proof that you are able meet mortgage repayments”.

The petitioner, Jamie Jack Pogson, goes on to say:

“Since living on my own I have paid £70,000+ in rent on time yet still struggle to get a mortgage. Unless you’re getting handouts, wealthy or in receipt of inheritance it’s almost impossible. I want paying rent on time to be recognized as evidence that mortgage re-payments can be met.”

The broken housing market is one of the greatest barriers to social progress in Britain today. Whether buying or renting, housing is increasingly unaffordable, particularly for ordinary working-class people who are struggling to get by. The number of people getting joint ownership mortgages has gone up to 74% from 66% 20 years ago because of the need for two people’s incomes. The average age of first-time buyers is also creeping up. Deposits have increased significantly to £48,000 on average across the country. Here in London—I am a London MP—it costs £94,000 on average to get a deposit.

The key to fixing the housing market is clearly to build more homes, which is why the Government are committed to delivering 1 million more homes by the end of 2020. However, finding a deposit is still one of the biggest problems that people face when looking to buy a new home. The Government’s Help to Buy schemes have helped more than 320,000 people across the UK to buy a new home, including more than 275,000 first-time buyers. The equity loan scheme provides buyers with an equity loan of up to 20% of the value of a new build property, which is repayable once the home is sold. I am pleased by the recent announcement of a further £10 billion investment in the scheme to help an estimated 135,000 new buyers and to ensure that the scheme can continue to 2021.

Since the equity loan scheme’s launch, more than 130,000 properties have been bought with the support of the equity loan scheme; the majority—81%—were bought by first-time buyers. The scheme has not just helped people to buy a new home. Industry experts have also credited Help to Buy with boosting supply and generating benefits for communities, councils and the Exchequer. The London Help to Buy scheme offers an equity loan of up to 40% for Londoners who have a 5% deposit. The help to buy ISA will also continue to help people to save up for their first home by providing them with a maximum Government bonus of £3,000 on £12,000 of savings—a boost of 25%. However, far too many hard-working young people from all walks of life are still struggling to get a foot on the property ladder.

[John Howell (Henley) (Con)]

We face a situation in which banks have to ensure that they give good loans, but people want their rental payments to be taken into account. Rental payments do not seem to me to be a good guarantee for future performance, so does my hon. Friend have any suggestions about how they might be taken into account?

[Paul Scully]

I appreciate my hon. Friend’s important point, which I will come to later. Rent clearly does not give any guarantee for the future but it gives a better guide to creditworthiness, in the sense that people have spent time paying rent regularly, on a monthly basis. As we heard, the petitioner spent £70,000 with little to show for it other than that he paid his bills, whereas obviously, when someone has the aspiration of home ownership, that same £70,000 could have been building up equity. If someone has a good record in one area, they would hope that that, combined with all the other checks that banks need to do, would be good for credit for a mortgage as well.

The Government have doubled their housing budget and are investing £7.1 billion in the expanded affordable homes programme to deliver 225,000 affordable housing starts by March 2021. In addition, the housing White Paper sets out bold new plans to fix the broken housing market and build more homes across England. Starter homes, which are targeted at the first-time buyers we have been talking about, form an important part of the Government’s action to help more than 200,000 people become homeowners.

A £1.2 billion starter homes land fund will be invested to support the preparation of brownfield sites for starter homes and other affordable home ownership tenures. I am delighted that this year we will see the first starter homes being built on brownfield sites across the country. They will be built exclusively for first-time buyers between 23 and 40 years old, at a discount of at least 20% below market value. Alongside that, a new rent-to-buy scheme will help hard-working households to benefit from a discounted rent set flexibly at levels to make it locally affordable so that they can save for a deposit to purchase their home.

Stamp duty means that the average first-time buyer typically faces a tax bill of £11,427 here in the capital according to the Land Registry, which recorded the average price paid by new entrants to the London property market as £428,546. Even a starter flat costing a quarter of a million pounds attracts a stamp duty bill of £2,500. In my view, the Government should aim to take most first-time buyers and some downsizers purchasing smaller properties out of this tax entirely, to reduce the burden on family homes, and to fix anomalies such as those around shared-ownership properties, which are an increasingly popular way to get on the housing ladder.

The evidence is clear: stamp duty, like all transaction taxes, reduces the level of transactions. The effects can be pretty stark. For example, ahead of the buy-to-let surcharge in March 2016, mortgages soared by 71% but then dipped to 60% the month after. That was not just a short-term effect. Six months later, in December 2016, buy-to-let mortgage lending was down by nearly 40% on the year before, whereas other mortgage lending was up.

Introducing the buy-to-let surcharge clearly reduced transaction levels, and the best way to boost them again is to cut stamp duty for homeowners, which should boost transactions and economic growth. By focusing on residential homes, such a cut would also boost home ownership. At the same time, shared ownership—an increasingly popular way to help people buy part of a property—needs stamp duty reform. Currently, the providers of these affordable home ownership properties and their customers often pay twice: providers pay on the whole property and then shared owners pay again when they buy their share. Stamp duty in such cases should be charged only once, making it even more affordable for people to get on the housing ladder.

[James Cartlidge (South Suffolk) (Con)]

In my understanding—I have some involvement in shared ownership—the buyer elects when to pay, and one reason why is that if someone buys a share for, say, £250,000, the stamp duty at that point would be lower than if the price went up in future and they elected to pay at a later stage. If we reform the system, we should at least maintain the choice for the customer, because it works quite well.

[Paul Scully]

My hon. Friend is right that choice is important. I still believe that a simpler tax system would enable the system’s anomalies to be ironed out right at the beginning, rather than each Budget having to iron out any anomalies that come out over time, but I welcome his intervention.

I began by talking about supply, which is the most important thing, in my view. The Government have taken action on that issue. Last year saw the highest number of residential planning permissions being granted on record and the highest level of net housing additions since the recession. However, the average home still costs almost eight times people’s average earnings, making it difficult to get on the housing ladder. The proportion of people living in the private rented sector has doubled since 2000, with more than 2 million working households with below-average incomes spending a third or more of their disposable income on housing. That is why I am encouraged by the vision for housing set out in the White Paper. The starting point must be to build more homes, slowing the rise in housing costs, so it is right that the White Paper sets out measures to plan for the right homes in the right places, to build homes faster and to diversify the housing market.

Even if we can get enough houses, lower fixed costs for homebuyers and provide short-term help through schemes such as Help to Buy, there is still a significant structural issue that many young people, in particular, will face, and that is the difficulty in getting a mortgage. Tenants can be disadvantaged in getting credit beyond mortgages. Millions of people are excluded from affordable credit because they do not have a credit history. For the financially excluded, it is a Catch-22 situation: without a credit score, applicants are declined by mainstream providers and considered riskier customers, but the only way to build a credit score is to have a form of credit, such as a mortgage or credit card, in the first place.

Most people on low incomes manage their limited money carefully, yet banks, utility companies and other retailers can discriminate against them. An estimated 2 million people, many of whom are social housing tenants, take out high-cost loans because they cannot access more affordable credit. The Financial Inclusion Commission estimates what is often called the poverty premium—the extra spent on basic necessities such as gas and electricity, mobile phones, white goods and furniture—to be £1,300.

Big Issue Invest has an interesting initiative called the Rental Exchange that will chime with people who supported the petition. The organisation is working with Experian, the UK’s leading credit reference agency, to prevent low-income people from being caught in a vicious circle of no credit score and no lending. Since 2010, Big Issue Invest and Experian have been working with registered social housing providers to incorporate tenants’ rent payment history into their credit files, with no cost to either the housing provider or the tenant. The data are kept in a secure and compliant way, are not used for marketing purposes and are made available only if the tenancy information is relevant and the tenant has agreed to a credit check, or if it is strictly necessary for an organisation to check information about a tenancy, such as in a case of fraud. Tenants can opt out of the scheme.

More than 150 registered housing providers, including housing associations, local authorities and arm’s length management organisations, are signed up to the Rental Exchange, representing 1.5 million tenants across the UK. Experian has tested the value of adding rent data to tenants’ files for each housing provider that comes on board, working with the provider to ensure that rent payment data are accurate before allowing them to go live. The testing has demonstrated some positive results, including an increase in digital identity authentication rates from 39% to 84% for social tenants when rent data are included in credit files. As well as allowing better deals while shopping, that makes life easier in other matters, such as signing up at a GP surgery or accessing benefits without paper copies of identification. In more than 70% of cases, tenants with no significant arrears have increased their credit score.

As well as tackling financial exclusion among the people on the lowest incomes, the approach can have a significant benefit for young people who might have a reasonable income but have not had the time to build a reasonable history for lenders to consider. Rental data add more weight to a credit file on the register, giving lenders more confidence that the applicant is genuine, and a positive payment history provides a strong indicator of good financial conduct. Lord Bird, founder of The Big Issue, has introduced a private Member’s Bill in the other place, the Creditworthiness Assessment Bill, which considers the wider implications and difficulties of financial exclusion, but I will limit the rest of my remarks to access to mortgages, as per the wording of the petition.

First-time buyers are much more likely to have been living in rented accommodation now than 20 years ago—66%, compared with 39%. Rent in London may have fallen over the last few months, but with a Greater London average rent of £1,564, the total amount spent on housing is still a huge proportion of the average household income, so it is hardly a surprise that so many people saw the suggestion in the petition as worthy of further consideration. I am pleased that the Residential Landlords Association supports the petition, although it expressed some concerns about the Rental Exchange system, as smaller landlords must go through another layer of bureaucracy in order to be included: their rents must first be paid to a “Credit Ladder” before being passed on to them. The RLA expressed concern that that muddies the water about who chases rent arrears and distances landlords further from tenants.

Although those issues can be overcome, the concerns point to the fact that even a seemingly simple move would need to be carefully considered so as not to create any negative unintended consequences. Clearly, the last thing that anyone would want is for lending to be relaxed to the point that triggered the mortgage market review in the first place. Back in 2010, the Financial Services Authority found that expectations of ever-increasing house prices and the ability to pass on risk to others led to relaxed lending criteria and increased risk-taking.

There is nothing in the petition to suggest greater risk taking; in fact, the opposite is the case. Having a more rounded financial history for applicants can lead to more informed decision-making by lenders. That transparency works both ways, and could have a negative impact on future applications for some. There are many other factors that lenders must consider, such as long-term income stability. Homeowners have other costs that renters do not have to pay, such as redecoration, insurance and so on. Maintaining a home is not cheap, especially when it comes to one-off but necessary maintenance such as roof repairs. House purchasing is a long-term commitment, and interest rates can rise more erratically than rents.

The Petitions Committee arranged a forum on the Money Saving Expert website, which 1,400 people viewed and a few people commented on. One person expressed concern that letting agents have too much power over tenants as it is, but the majority of commenters were largely supportive of an approach like the one mentioned in the petition. Some people wondered why Government needed to be involved in the first place, a sentiment with which I have always had sympathy. I am old enough to remember Ronald Reagan’s nine most feared words:

“I’m from the Government, and I’m here to help.”

The Budget is coming up. I make a belated plea to the Minister to take the feedback from the 147,000 people who have signed the petition and consider moving towards a solution in the forthcoming Budget. When he replies, can he let us know whether he thinks that there is a market-based solution that we can unlock with our world-leading fintech businesses? Petition Committee members always say that an e-petition debate is not the end of the petition process but the start of a campaign. Including rent payments in the assessment of mortgages is not without its possible negatives, but I believe that it is well worth considering. I suspect that a market-based solution will have the flexibility required to make it work; brief legislation cannot easily change as the market develops. I hope that the Minister and the Government will consider the petition seriously and do what they can.

I remember the joy of buying my first house, and the sense of freedom and achievement. I am now at an age when my children, the eldest older than I was when I first picked up those house keys, are looking at the options open to them with some concern and trepidation. Let us ensure that first-time buyers have every chance of getting on the housing ladder, fulfilling the aspiration that so many of us have had the good fortune to realise. Let us do what we can in this area as another piece of the jigsaw in supporting a new generation of homeowners.

--- Later in debate ---

[Paul Scully]

The debate today has been very constructive. I hope the petitioner realises that the fact that we have gone through it to reach agreement in about an hour and a half, rather than taking the full three hours, is no reflection on the importance we attach to the petition and the issue. I am sure that a lot of people were detained by listening not only to the Minister for Transport Legislation and Maritime on Second Reading of the Automated and Electric Vehicles Bill, but to the important statement made by the Prime Minister earlier.

We have had some great contributions. The hon. Member for Poplar and Limehouse (Jim Fitzpatrick) talked about the ground rent issue, and there has been some agreement on how we might make the system work. My hon. Friend the Member for South Suffolk (James Cartlidge) has a knowledgeable background, and that illustrates the need for a market-based solution to take into account all the things he said.

The hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) mentioned a newspaper article and I did a quick search for it. Jamie Jack Pogson was talking about how surprised he was that the petition was so successful, and he was quoted as saying:

“It was only a little rant I was having first thing in the morning on the way to work.”

Frankly, I could have written that about my career path to this place. I hope that shows anyone who is thinking about starting a petition how they can change things—they can have a little rant, get out and do something about it.

That is the strength of the petition system. These debates are some of the most watched in Parliament. We look at Prime Minister’s questions and all sorts of other things, but petition issues such as the one we are discussing are the ones that people want us to raise. I therefore thank all my colleagues very much for a constructive debate, and I thank the Minister for the positive way in which he has responded. I know that he will take the issue away and consider a proper, long-term solution.

Question put and agreed to.

Resolved,

That this House has considered e-petition 186565 relating to eligibility for mortgages.

Summer Adjournment

Paul Scully Excerpts

Thursday 20th July 2017 Commons Chamber

[Paul Scully (Sutton and Cheam) (Con)]

We have had some excellent speeches, including a great maiden speech from the hon. Member for Reading East (Matt Rodda). I was at university in Reading, and I spent a lot of time drinking pints in The Nob, going to the kebab shop and eating Champ’s burgers. I studied chemistry and food science, and I think I took the food part a bit too literally. We have also heard from my hon. Friend the Member for Cleethorpes (Martin Vickers), who raised the issue of BBC salaries. Earlier today, my hon. Friend the Member for Ribble Valley (Mr Evans) talked about Derek Thompson’s salary. Doctor Who is now a woman. It is only in the world of the BBC that a nurse gets paid more than a doctor. But I am not going to talk about the fictional hospital in “Holby City”. I want to talk about a real hospital: my local hospital, St Helier.

Just before the election, I brought the Secretary of State for Health to St Helier. I was pleased that he took me up on my invitation to come to see the best and the worst of the hospital. He saw that we have the best A&E in London in terms of achieving its targets. He saw the fantastic work of the staff there, and the award-wining fracture unit. He also saw how the multi-disciplinary patient reviews are setting a really good example for other hospitals.

However, the Secretary of State also saw the hoarding around the back of the building, which is crumbling. The hoarding is there not because of construction work but because we cannot rely on bits of masonry not falling off. When a building has the ability to make people more ill, that is not a good thing. There is a fantastic renal unit at St Helier, but the area with the sickest patients is dysfunctional because the lifts do not work properly. A modern-day hospital bed does not fit inside the lifts, so the trust is paying something like £10,000 a week for ambulances to move people from the back of the hospital to the front. This is a building that predates antibiotics, and it will never be what most people would think of as a modern-day healthcare facility. We really need to find a solution to this.

I am delighted that a solution is starting to present itself. We have had review after review, but now, for the first time, the trust has been allowed to engage with the public on an option that does not include St George’s in Tooting. There are six MPs whose constituents are served by the St Helier and Epsom hospitals and they disagree on a lot of the detail, but they do agree that people needing A&E or maternity services should not have to go to Tooting. St George’s is already overloaded, and it is also incredibly difficult to get there in the rush hour as it involves heading into London. The option is to build a specialist acute unit on one of the three sites that the trust owns. It could be at St Helier or at Epsom, or it could be a co-located site involving the Royal Marsden, which could add extra benefits to the services provided there.

Apart from reacquainting myself with the family and trying to get a bit of rest, I will be spending the summer back out on the stump speaking to as many people as possible, because what we need at this stage is for people around Sutton to be asking the NHS to support the trust’s vision and saying, “Yes, we want that level of investment.” The work will cost between £300 million and £400 million. Trying to extract that sort of money is not easy, but we have to find the local will to start talking about where to locate the specialist acute facility and about how to get the money, which could come from the Treasury or from loans, or we could leverage money from pension funds. My local council’s pension fund invests in at least three shopping centres, so why not invest that money in local infrastructure? However expensive the project might be, I think we can all discount PFIs, which have been discredited over the past few years.

In engaging with the public, the trust has ruled little out, but what it has ruled out is really significant: it has ruled out closing St Helier hospital. We have had lots of campaigns to save St Helier, but its closure has been ruled out. The trust is spending £12 million on refurbishing the back of the building, and it has applied for grants to get more money. The trust has asked for about £80 million to cover costs, £40 million of which—if secured—will help to keep St Helier open for at least another 20 years. That has to be good news for the people of Sutton.

The trust has also ruled out doing nothing. I have said that the building is crumbling and that it cannot be turned into a modern facility, so I know that the trust will do what it can to make the hospital last, but we have to do something for my constituents, for the boroughs of Sutton and Merton and for the surrounding areas. The trust has also ruled out building on the land that it solely owns on the old Sutton hospital site in Belmont, because it is too small. That is why the trust is looking at co-locating with the Royal Marsden hospital, the benefit of which is that extra facilities will be added for the Royal Marsden, which does superb work in cancer treatment—having an acute facility right on the doorstep will be good news.

In conclusion, I will be going around speaking to as many people as I can, and I hope the constituents will look at my website, come and speak to me and really get involved. By the time we get back after the conferences, we will hopefully have completed the first stage of getting new healthcare facilities in Sutton. Mr Deputy Speaker, I wish you and everybody else a very restful summer break.

Article 50: Parliamentary Approval

Paul Scully Excerpts

Monday 11th July 2016 Commons Chamber

[John Penrose]

It is clear that many things will change in the new world that we now face. The country’s trade orientation, foreign policy and so forth will all have to be readdressed and amended, just as many of our businesses will have to reassess how they do business. The right hon. Lady is absolutely right that some consequential changes might be needed, but I say again that I cannot prefigure anything that the incoming Prime Minister may be considering. Like me, the right hon. Lady will have to wait until announcements are made. I will take what she said as a potential submission to the new prime ministerial team, and perhaps it will consider her remarks in that light.

[Paul Scully (Sutton and Cheam) (Con)]

The Opposition spokesman talked about 170 free trade agreements that will need to be renegotiated, but my understanding is that there are about 167 independently recognised countries outside the EU. The hon. Member for Bishop Auckland (Helen Goodman) suggested that the Government might be something other than inclusive when discussing Brexit, yet about 34 million participants to date have given us a clear message. Does my hon. Friend agree that rather than spending our time on whether we invoke article 50 and whether we adhere to the mandate of the people, we should focus our efforts on securing a looser, collaborative relationship with our European neighbours and grabbing the opportunities from the rest of the world?

[John Penrose]

My hon. Friend is absolutely right—the focus now must be on how we get this done in the best and most constructive way possible for our nation. There will be opportunities and great new horizons as a result of the decision. We need to make sure we are clear about them and that we are set up in the right way to grab those opportunities as they present themselves.

Budget Changes

Paul Scully Excerpts

Monday 21st March 2016 Commons Chamber

[Mr Gauke]

We have a debate on the Budget today and tomorrow, and the Chancellor will respond to the debate tomorrow. In terms of any future changes of fiscal events, there will be an autumn statement in the autumn.

[Paul Scully (Sutton and Cheam) (Con)]

Will my hon. Friend confirm that the many positive things in the Budget—including the small business rate changes, which will remove a lot of business rates from independent shops in Sutton, Cheam and Worcester Park, and the tax threshold changes, which will help a lot of people who should never have been caught by the 40% tax threshold, including many public sector workers—will go ahead as planned?

[Mr Gauke]

Yes, I can confirm that. The changes to small business rate relief will help hundreds of thousands of businesses, particularly small businesses. We are delivering on the pledge in the Conservative party manifesto to increase the higher rate threshold to £50,000—this Budget takes it to £45,000—and we are also raising the personal allowance. The typical basic rate taxpayer is now paying more than £1,000 less in income tax as a consequence of the changes we have made.

Welfare Reform and Work Bill

Paul Scully Excerpts

Tuesday 27th October 2015 Commons Chamber

[Owen Smith]

I am glad I gave way, because my hon. Friend makes the excellent point that politics is always a choice. Politics is about priorities. Politics is about who we stand up for, who we speak for and whose side we are on. It is very, very clear that, in the Bill and in this House, the Conservative party is on the side of millionaires and the wealthy, and are standing up against the ordinary working people of Britain, who will not forgive them for doing so.

[Paul Scully (Sutton and Cheam) (Con)]

The hon. Gentleman talks about choices, and spoke earlier about a £4.4 billion hit. Is he proposing, instead, a £4.4 billion subsidy for the large companies that Labour Members continue to criticise on a daily basis to cover the shortfall in wages that they should be paying?

--- Later in debate ---

[Neil Gray]

I welcome my hon. Friend’s contribution. As we are talking about affordability and sustainability, let me say that the Government think it feasible to press ahead with apparently £167 billion of Trident nuclear weapons, which is shocking and deplorable, while seeing fit to find £4.4 billion of cuts in tax credits. They are taking an ideological wrecking ball to our social security system in the name of a budget surplus by scandalously waging a war on low-income households.

[Paul Scully]

Does the hon. Gentleman agree that the cost of Trident is over the lifetime of the project, whereas he is talking about an annual savings figure?

[Neil Gray]

By anyone’s estimation, £167 billion is a vast sum of money, but it would also amount to £3 billion per year, which would go some way to squaring the circle on the tax credits cuts.

--- Later in debate ---

[Tom Brake]

I will not give way, as I have to finish at 2.57 pm.

Tax credit cuts will hit 4,000 families in my constituency and 7,000 children. Collectively, some £4 million will be lost. The cuts will hit hard-working families who are struggling to make ends meet and, perhaps most importantly from the Government’s point of view, the changes will reduce the incentive to work, which I thought the Government favoured. Contrary to what the hon. Member for Sutton and Cheam (Paul Scully) said, I do not think that tax credits are a pat on the head. They are essential in supporting families.

[Paul Scully]

rose—

[Tom Brake]

I will give way briefly.

--- Later in debate ---

[Paul Scully]

The right hon. Gentleman said that he was going to talk about this, but does he not agree that when I spoke about a pat on the head I was talking about the original tax credits, which were received by nine out of 10 families, including those with salaries up to £60,000 and not just low income families?

[Tom Brake]

Indeed, and changes were made to tax credits to take that into account. However, tax credits are now needed to support people who are in low-paid work and will not suddenly see their salaries rise dramatically to compensate them for the loss of those tax credits. The cuts are regressive and should be opposed by the House. I hope that that will happen in the vote that is about to take place on new clause 1.

--- Later in debate ---

[Helen Goodman]

It depends what kind of job is being applied for and how long it takes. I do not know how many applications the hon. Lady made when she was unemployed. Obviously, if they are simple job applications, one can make more. My point was: the young man had made 27 and he was sanctioned. Does she think that a sign of somebody malingering or a sign that people in the jobcentre were playing games? I put it to her that it was not a straightforward way to treat this young man. It was not encouraging or supportive; it was demeaning and demoralising, and it should stop. Ministers should ensure that the sanctions rules are properly applied.

The big study on sanctions carried out by Glasgow University found that one person in four on JSA had been sanctioned. I am sorry, but I think there is the intention on the part of Ministers to massage down the JSA numbers. Of course, the number of people unemployed has fallen and employment has risen—everybody is pleased about that, and nobody wishes to deny it—but I think there is an attempt, through sanctions, to massage the JSA numbers and pretend that there is not an unemployment problem. When I went to the Bishop Auckland jobcentre, I was told that half the people claiming JSA there had been unemployed not for more than 12 months but for more than three years. This is a serious problem, but the Government are not addressing it in a serious way.

[Paul Scully]

The hon. Lady might make a stronger case if she were looking at the unemployment figures alone. The fact is, however, that we now have record levels of employment in this country. They are at their highest since the statistics first started to be recorded. Does she not agree that that shows a move from unemployment to employment?

[Helen Goodman]

The statistics are quite dubious, in a number of ways. Let us consider, for example, the number of people who have gone into self-employment because they have not been able to find proper jobs, and the extent of under-employment.

[Paul Scully]

As someone who has been self-employed for the best part of 20 years, I find that quite offensive. Is the hon. Lady seriously telling her constituents that self-employment is not a proper job?

[Helen Goodman]

Is the hon. Gentleman aware that self-employment has increased by 42%? How many of those newly self-employed people does he think are in sustainable small businesses? People come to my constituency surgeries who have become self-employed and are working as window cleaners. That is fine—of course everyone needs to get their windows cleaned—but there is a limit to how many window cleaners we need in society. If people are coming out of highly skilled jobs and going into very low-skilled ones—[Interruption.] Conservative Members can protest as much as they like, but when the Treasury Committee took evidence from representatives of the Bank of England, they told us that a lot of the increase in self-employment was not real employment and that it was a sign that people could not get the kind of employed jobs that they wanted. Professor Kristin Forbes said precisely that to the Committee. Conservative Members do not need to pretend that this is some kind of prejudice on my part. It certainly is not.

--- Later in debate ---

[Priti Patel]

We recognise that there are people who cannot work, as a result of illness, and they will be in the support group. They will absolutely be supported in that group, as is right and proper.

It is our responsibility to ensure that the welfare system is affordable and sustainable. Those on the Opposition Benches who oppose our making difficult decisions on welfare must say what they would cut or which taxes they would put up to pay for their proposals. The Bill will correct many of the unaffordable and disproportionate increases in benefits compared with earnings by freezing most working-age benefits. As we have said throughout the passage of the Bill, this will protect taxpayers from the cost of subsidising increasing social housing rents through housing benefit. Those rents have climbed by 20% since 2010, but we will now act to reduce them by 1% a year for the next four years.

The Bill will continue to restore fairness to the system. We do not think it is fair that someone on benefits should receive more than working households earn, and 77% of the public agree. The benefit cap reintroduced fairness. Reducing the benefit cap to £20,000—and to £23,000 in Greater London—reinforces and strengthens that message. The new cap better aligns the level with the circumstances of hard-working families across the country.

[Paul Scully]

Does the Minister agree that, as well as providing a fairer deal for the taxpayer and introducing a fairer, more sustainable system in order to help to pay off the deficit, this programme will help to encourage, nudge and support people back into work? Is that not better than just wringing our hands?

[Priti Patel]

My hon. Friend is absolutely correct. That is the whole purpose of what we have been doing through our welfare reforms. We are putting people first and providing the support they need to get back into work, in contrast to what we saw during the 13 years of the Labour Government, when people were trapped on benefits in a cycle of dependency, and trapped in poverty while having opportunities denied to them.

This Government are committed to working to eliminate child poverty and to improving life chances. Our new approach focuses on transforming lives, which is what the Labour Government failed to do through their arbitrary measures on poverty. We will tackle the root causes of poverty rather than focusing on the symptoms, as existing measures do. We saw the previous Labour Government’s pursuit of short-term, narrow and expensive policy solutions that attempted to lift incomes above an arbitrary line. They increased welfare spending by 60% in real terms—[Interruption.] That is a fact. They increased spending in an attempt to chase that moving poverty line, without driving any sustainable improvements in children’s lives.

In contrast, the Bill will place a duty on the Government to report annually on the key measures of worklessness and educational attainment. In these new life chances measures, we will focus on the root causes of poverty, rather than on the symptoms. That approach has been seen to fail—[Interruption.] The hon. Member for Islington South and Finsbury (Emily Thornberry) can shout all she wants, but these new measures will drive real actions and make the biggest difference to disadvantaged children now and in the future. We have also committed to publishing a life chances strategy—[Interruption.] What is embarrassing is that during 13 years, the Labour Government systematically failed to deal with the root causes of poverty or to change people’s lives by getting them back into work.

--- Later in debate ---

[Paul Scully]

I regret the fact that, on Report, we have spent a lot of time—about a third of it—on yesterday’s debate. As important as that issue is, it has meant that we did not get to speak about our measures for full employment and for improving people’s life chances, especially with our troubled families programme. What I do not regret—in fact, I positively welcome it—is the clear and direct action taken by the Secretary of State for Work and Pensions and the range of Ministers who have worked incredibly hard so that Britain can deliver this Bill tonight.

The Bill means that, when we are looking at delivering a welfare programme, people who are in work and paying their tax will have the same expectations on housing and other choices when they have children as those who are not in work. The Bill is also for our children. We must pay off the deficit and, ultimately, our debt. By saving £12 billion through our overall package, we will be able to reduce the deficit significantly. Most of all, the Bill is about helping those who are most in need of our support. We have heard a lot of empty rhetoric from the Opposition parties, but what the Secretary of State and his Ministers have done in this Bill is to look at the underlying problems and at the underlying situation so that we can push people towards work. We will nudge, support and help them back into full employment. I very much welcome this transformational Bill.