Budget Resolutions

Wera Hobhouse Excerpts

Wednesday 22nd November 2017 Commons Chamber

[John Redwood]

Yes, indeed. I hope that the public sector, as well as the private sector, takes that fully on board, because the Government and local government, with representations and leadership from a range of parties in this House, have a great opportunity to do more to promote, encourage and mentor. As the Chancellor has indicated, we are going to face a major revolution in robots, artificial intelligence and all kinds of applications of the digital economy. Great digital companies are making huge changes that have a big knock-on effect for more traditional businesses. We need to put all our weight behind a Government who wish to understand that revolution and try to ensure that more people are winners from it by changing jobs and developing new skills so that their careers can respond to the huge changes under way.

Quite rightly, a focus of attention for the public sector—in this Budget as in any other—is whether there will be enough money to do a decent job for public services. I, like any Labour MP, want to ensure that my local schools have enough money to pay good teachers and to have enough of them, and that my local hospital and surgeries have enough financial support to do a good job. I see from this Budget that there is a £6 billion overall fiscal relaxation in 2018-19 and a £10 billion relaxation in 2019-20, mainly on the spending side. I am quite sure, from what the Chancellor said, that as some relaxation of pay agreements occurs, money will come forward to meet those bills. It is important that when pay deals are reached, the health service, schools or whoever have the money to be able to meet those requirements. A modest fiscal relaxation like that is eminently affordable.

The current levels of debt or deficit are not alarming. I am pleased that the Government think that the level of debt as a percentage of GDP will come down very shortly, but we need to take into account the fact that the state now owns quite a lot of the debt itself. That makes a bit of difference. The United States of America is now embarking on a programme of cancelling and reducing the debts because it controls both sides of the balance sheet through the Federal Reserve Board.

I want to concentrate a little more on house building and housing. I am pleased that the Government are to have a speedy—and, I hope, thorough—investigation into the issue of how existing planning permissions can be better used and can translate into more homes more quickly. That is very much an issue in the Wokingham borough part of my constituency, where the borough has issued around 11,000 planning permissions for individual homes—more than enough, one would think, to allow the fast build rate required under the agreements in the local plans. There has been considerable delay, however, in bringing forward some of those houses. There is also a wish by others to try to get planning permissions elsewhere and to build outside the areas where the plan would prefer the building to take place. There is a lot to be said for concentrating the areas of building, because then the moneys can be applied in a planned and predictable way to the surgeries, primary schools and extra road capacity that are needed, whereas if inspectors grant permissions in a variety of different places around the borough on account of a slow build rate, far more capital will be required to keep up with the demands, because distance would become an issue for people needing to get to those facilities.

Looking at the national picture on house building, I welcome the idea that we should be able to have five new garden cities. The garden town movement was a fine one, many years ago, and there were some great successes with new towns and new cities in our country. I am not going to start choosing places where the new ones should go, because none of them will be in my constituency as we already have an awful lot of house building and development going on.

[Wera Hobhouse (Bath) (LD)]

From what I heard earlier, the Chancellor never mentioned homes for social rent. Can the right hon. Gentleman confirm that he, too, did not hear them mentioned?

[John Redwood]

I think that the hon. Lady is wrong; I think he did mention them. That is certainly part of the Government’s plan. It is clearly a comprehensive housing plan that involves homes for rent and homes for purchase.

I would like to see new settlements where a suitable location can be found, and I am pleased to hear that there is already some agreement on the university arc from Cambridge through to Oxford via Milton Keynes, where there are all sorts of exciting opportunities. One of the really good things about the UK economy now is the momentum that is clearly gathering pace in technology investment and technology business set-ups. It is obviously easier to create those opportunities close to the great centres of learning where there is an extremely good workforce to recruit and there may well be entrepreneurs as well. It is excellent that we reinforce success, and I see that part of the country as a major area for development.

I agree with my hon. Friends who have said, in relation to the housing issue, that it is important to promote home ownership. There is clearly a great yearning for more home ownership, and it is one of the big social problems of our day that many people under the age of 35 are unable to afford their first home. I welcome anything that can make the gap a little more bridgeable, and it is excellent that we will be getting rid of stamp duty for most first-time buyers.

Mortgages: Eligibility

Wera Hobhouse Excerpts

Monday 23rd October 2017 Westminster Hall

[Kirsty Blackman (Aberdeen North) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I appreciate the work of the Petitions Committee and the hon. Member for Sutton and Cheam (Paul Scully) in particular in bringing this debate to Parliament. As a number of Members have said, this debate is important, and its tone chimes with the concerns a number of the constituents who come through my door and the people who talk to me have expressed about the housing market, so this debate was a good one to bring to Westminster Hall.

I will begin by discussing the issues facing young people in particular. The Chancellor has been making noises recently about trying to improve life for millennials—I hope he does—but I am concerned that he may think that the implementation of a railcard for under-30s will do it. I hope he will go much further, because a railcard will not cut it. A number of issues face millennials, who are people born between 1980 and 1995. They are up to 35 years old, although there are various definitions. In 2005-06, 24% of 25 to 34-year-olds were privately renting. That figure has now risen to 46%. In 2016, 59% of the households headed by millennials were privately renting.

The private rental market is expensive, which particularly hits young people, especially when we consider that young people born between 1980 and 1985 are earning £40 less, once adjusted for inflation, than those born 30 years earlier. It is a significant issue that they are having to put so much of their income into privately renting and are unable to save as a result. People talk about how millennials just sit around and do not do any work, but they work as many hours as previous generations did, but for less money. That is a real concern, especially given their outgoings.

Issues to do with the private rental market affect younger people, but they also affect people of all ages. The gentleman who organised the petition said that he spent £70,000 of his income on rent, and that money has not gone to providing a roof over his head that will continue to be a roof over his head, because his landlord could decide that he no longer wants to rent that property out. That generation do not have the security that previous generations may have had. In social renting, properties are much cheaper to rent than in the private rental market and people have a much better guarantee that they will be able to stay for the long term.

I have highlighted the specific problem facing millennials, but I want to raise a number of other issues. I read an interesting piece the other day about how it is not good to save at the moment. If someone puts their money in the bank, it shrinks simply because it is in the bank and interest rates are lower than inflation. It is difficult for people of any age to save, because their money will not make money. If someone wants a deposit for a mortgage, they have to have a chunk of cash, and they need more than they used to need, because the money will depreciate while it is in the bank. That is a real concern.

Another factor preventing people from building a deposit is low wages. There has been a real lack of wage growth. If we compare the position for non-retired households before the financial crash with their position now, such households are not earning more in wages than they were a decade ago. For folk trying to build up enough savings for a deposit, that is a major problem. There are a number of problems with how the mortgage market works and with access to mortgages. For a start, people need savings. I know that there are Help to Buy schemes. When we bought our house in 2009, we did it on a shared equity scheme, which was incredibly helpful. It was a developer-run scheme, rather than one run by any Government. It was very useful; it was the only way we could get on the property ladder in 2009, because we did not have enough savings. Those schemes do not operate across the board and not everyone has access to them. Young people in particular cannot access them all very easily.

I am pleased that Help to Buy schemes have been put in place by the UK Government and the Scottish Government. The Scottish Government have introduced a Help to Buy scheme with open market access to shared equity. The scheme is not just for new properties; it allows people to buy a property that is a bit older. It allows people on median incomes—not necessarily the poorest incomes—to access the housing market. Such schemes have been successful in Scotland and have had a positive effect in helping people to secure a house that is not necessarily new. Older houses may have more of a buying history, so they can be a safer bet because people have a better idea of whether the house value will depreciate in the near future, unlike with new houses, where people do not know whether they have been priced correctly.

The Scottish Government have done a number of positive things. Through their Help to Buy schemes, 23,000 households have been helped into home ownership since 2007. The open market shared equity scheme has received £70 million this year from the Scottish Government, so it is hugely positive. We will deliver at least 50,000 affordable homes in Scotland by 2021, and that policy has been backed by £3 billion.

One of the most important things the Scottish Government have done in the past decade is change the attitude to social housing in Scotland. We have taken a different tack from the UK Government. We have increased significantly the amount of social housing builds and have reduced the ability of people to buy their social house. I understand that the Conservative Government do not necessarily agree with that, but it means that we have been able to begin to build our socially rented sector back up. That has meant that more people are socially renting, and they have the ability to build up their savings pot as they are not paying unaffordable private rents. That is what my family did. We were in a socially rented multi-storey block and we were able to build up some money for legal fees and others things when we bought a property. Even if someone does not have enough for a deposit but can get involved in a shared equity scheme, they still need some money to put towards the fees. Those things are hugely positive, and the move towards more social housing in Scotland is a very good thing.

On the issue of creditworthiness, the hon. Member for Sutton and Cheam mentioned the Rental Exchange scheme by The Big Issue and Lord Bird, which is a genius idea. I cannot believe people did not think of it sooner, because it is a great way to ensure that social rent payments in particular are taken as evidence of creditworthiness. Evidence of creditworthiness is a real issue that has been touched upon by several Members. Having no credit score, or a low credit score, does not mean someone cannot afford to pay a mortgage. It simply means they have not built up a credit score. Peers of mine, for example, have had to take out a credit card to build up a credit score. We do not want people having to take on debt simply so they can get a credit score in order to get a mortgage in future. There are better ways to do that. The Rental Exchange scheme is brilliant, working with people on the lowest incomes, particularly those in social housing. It would be nice if even more social housing providers got involved in that scheme and it were widened out so that it can be accessed by more people, because it is hugely positive.

Other things around creditworthiness and the way that credit scores work are a significant problem. One Member mentioned the poverty premium and the additional amount of money that people have to pay as a result simply of having a lower income and lower savings. If someone wants to get a loan, they go to various websites to see how much they can get. All the websites provide an indicative rate, which is probably not what someone will actually get because the bank or institution will then offer something that it decides is the most appropriate thing.

To get a quote for an actual rate, the bank needs to do a credit check, which impacts on someone’s credit score, making it more difficult for them to shop around. The people on the very lowest incomes cannot go to three different banks and get three different quotes and then three different percentages for the £2,000 that they want to borrow to buy a new dishwasher, washing machine or whatever it is that they need, because that will have an impact on their credit score. There is an issue with the way in which credit rating agencies work because of the need for the credit assessments to have an impact on the score. In fact, it impacts most negatively on the people who most need assistance with finance and who could do with having a better rate because they do not have the ability to shop around. I know that is slightly off-topic, but I wanted to raise the issue in the context of creditworthiness.

I feel the frustration of the gentleman who started the petition, as do the 140,000-odd individuals who signed it, as well as thousands and thousands of people across the UK. If we look at the people who are young, who are around my age and who are millennials, I know many who have come to the conclusion that they will never be able to afford to buy a house. It will simply never happen because they will never have the money to do so.

If private rentals were more secure and affordable, there would be less of a problem but, because private rentals are insecure and rents are sometimes sky high and people have to pay a huge amount of their income on rent, there is a problem. People cannot even aspire to own their own home. Young people are criticised for spending too much money on coffee, and we regularly see a meme doing the rounds on Twitter: “We’re buying all the £3 coffees, because you’ve got all the £3 houses.” That sums up the frustration felt by young people. I am not saying that people who cannot afford mortgages should get mortgages, but we must help the people who can afford mortgages but who do not have the creditworthiness.

[Wera Hobhouse (Bath) (LD)]

The issue is not about encouraging debt, but about greater inclusion and affordability for young people, or for anybody caught up in this vicious circle of very high rents and squeezed budgets, which means they cannot save for deposits.

[Kirsty Blackman]

I absolutely agree with that point. In fact, some of the case I have been making is about the very opposite of encouraging debt. I want people to build up a more positive credit score without having to take out a credit card and make payments, because for some people that might be too much temptation. Positive moves could be made by the Government and credit ratings agencies to ensure that more people can get access to the finance that they need and can afford, rather than finance that is out of their reach.

Economy and Jobs

Wera Hobhouse Excerpts

Thursday 29th June 2017 Commons Chamber

[Wera Hobhouse (Bath) (LD)]

Thank you, Mr Speaker, for the opportunity to make my maiden speech as the new Member for Bath.

Let me first of all pay tribute to my predecessor, Ben Howlett. He served his constituency with great diligence and I thank him for the contribution he made to our wonderful city. In particular, Ben Howlett understood the progressive and liberal spirit—with a small l—that makes up the fabric of Bath, and he campaigned with conviction to remain in the EU and on voting reform. As a keen supporter of electoral reform, I want to continue his work and I hope we can make some progress during this Parliament.

Of course, many Bath citizens remember Don Foster, the MP for Bath from 1992 to 2015, with special fondness. For 23 years he was Bath’s No. 1 supporter, representing the city with infectious energy, and bringing people and communities together.

Today, 29 June, would have been my mother’s 97th birthday. She was born in Hamburg into a half-Jewish family and experienced directly the persecution under the Nazi terror. I was lucky enough to be born into a different Germany—one heavily scarred and with an immense feeling of guilt, but determined never again to go down into the abyss of fanaticism, racial intolerance and exaggerated national pride. It is testimony to the open-mindedness of the people of Bath that they have elected as their new MP a woman who was not British-born. I feel deeply humbled and very honoured.

Whenever I mention that I live in Bath, the immediate response is, “Bath—what a beautiful place.” Yes, Bath is a beautiful place, but like many other cities it is suffering from a housing crisis and overstretched public services. In 2016, average house prices in Bath rose by more than £100 a day, making it almost impossible for people on an average income to rent a decent family home, let alone buy their own home. Making sure that we share prosperity among all people in Bath will be my particular focus.

Under current Government proposals, two out of three schools in Bath will have to lay off staff in September. As a former secondary school teacher, I know all too well how challenging it is to teach and learn effectively in very large classes. I will stand up for all young people in Bath to make sure that they receive the education they deserve.

Whether we like it or not, this Parliament will be absorbed by Brexit. Last year nearly 70% of my constituents voted to remain in the EU, and I am here to make sure that their voices are heard on Brexit. The Brexit debates have only just started, and I look forward to taking a full part in those debates, and indeed in all the business of the House.