Welfare Reform and Work Bill
Graham P Jones Excerpts(8 years, 7 months ago)
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Graham Evans
The hon. Lady raises a good point, which others have raised, too. I would encourage the Select Committee to do a further investigation into Jobcentre Plus. My personal experience is that it does an outstanding job. I carry out job fairs in my constituency and I am organising my fifth one since I became an MP, during which time I have seen unemployment halved in Weaver Vale. One thing I learned from working with the jobcentres in Runcorn and Northwich was the number of high-quality and well-paid jobs available.
Let me provide an example. Waitrose came to town—to Northwich. It is under no obligation to give interviews, but when it came to Northwich, it said it would interview 25% of local people on the books of the local jobcentre. In the end, it interviewed 70%, and I am pleased to say that more than 50% of those it took on for the new Waitrose in Northwich were local people. I spoke to many of the people employed there. There were lots of young ladies, and ladies not quite so young, who had been unemployed for many years. They now have themselves a fantastic career with a John Lewis partnership. I asked them why they were unemployed for so long, and they said that the training given by Jobcentre Plus and the local Cheshire West and Chester work zone was what made them job-ready, able to do well in interviews and capable of producing a good CV.
The last time I checked, Waitrose was delighted with the quality of the workforce—one that, as I say, had been unemployed for a very long time. Some of the jobs are part time, but some people want that, and they are good-quality jobs and very well paid. This is exactly the sort of Jobcentre Plus activity that I hope goes on in everyone’s constituency. I was going to say more about Jobcentre Plus, but I shall give that a miss as I have already made the points.
Everyone with the ability to work should be given the support and opportunity to work. The previous system wrote too many people off and left too many trapped in a cycle of welfare dependency. Over the last five years, the number of people in Weaver Vale claiming jobseeker’s allowance and universal credit while not in employment fell by more than 1,000—a 51% drop. I am not saying that my jobs fairs had anything to do with that, but they probably helped in some way.
This Government’s long-term economic plan is working for Weaver Vale, getting people off a life on benefits and back into work. I have not heard of an alternative to our long-term economic plan recently—or at all, in fact. Employment has been this Government’s real success, with 2 million more jobs—and 1,000 created each and every day during the last Parliament.
Graham Jones (Hyndburn) (Lab)
I question this “long-term economic plan”. Is it the one intended to cut the deficit entirely by 2015 or the one to cut it by 2020? Which one of those long-term economic plans is it?
Graham Evans
The hon. Gentleman raises a good point. The long-term economic plan I am talking about is taking this country from the depths of despair we experienced in 2010. If we carry on the way we are going, we will be the biggest economy in Europe. I have to confess that I have a vested interest as I have young children and I am interested in their future. Do we all want to leave a credit card debt of £1.4 trillion? As long as we carry on with the deficit, we are adding to that debt. It is all about choices and paying down the deficit, which we will do by 2019-20. It is about paying down the debts of my children and the hon. Gentleman’s children so that they will not be saddled with our credit card debt.
We understand that the route out of poverty is not through welfare; poverty can be left behind through work. International development is a recognition of that. When we as a country give 0.7% of our GDP to overseas development, we look for ways to help countries to stand on their own two feet. Helping communities and individuals all comes through work.
The OBR has predicted that a further million jobs will be created over the next five years, but this is the party of ambition, and we want to go further. This Bill is working to a target of full employment and puts an obligation on the Secretary of State to report on progress towards that target. I wholeheartedly agree with that.
This Bill is a major stepping-stone, moving Britain from a high welfare, high tax, low wage economy to a lower welfare, lower tax and higher wage economy. It continues the work of my right hon. Friend the Secretary of State for Work and Pensions in the last Parliament, making work central to Britain’s welfare system. These reforms are transforming the lives of some of the poorest and most vulnerable people in our communities and giving people the skills and opportunities to get on in life and stand on their own two feet.
Tax Credits
Graham P Jones Excerpts(8 years, 7 months ago)
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Robert Jenrick
I will not give way, because time is pressing.
The second question we must ask is: are we willing to put this back in the box labelled “too difficult”, or is this generation of Members of Parliament willing to take the matter on? Do we want to kick this can down the road for future MPs and constituents to deal with, or do we have the guts to take it on? Of course it is not easy. No welfare reform is painless, and any boondoggles given away before general elections are, by their nature, the most difficult things to retract, as my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) has said. This matter is important, because it cuts to the core of what we are here for. Are we, as Members of Parliament, elected here to leave our children and grandchildren a state that is in worse repair, less competitive and more dependent on China? I have just been to hear the President of China speak a few moments ago. I want a country that can stand on its own in the world, pay its way and ensure that work pays, where millions of working people, including 4,000 or 5,000 of my constituents—
Robert Jenrick
I will not, as time is against me.
I want a country where 4,000 or 5,000 of my own constituents are not reliant on welfare, but have the dignity of a job that pays.
Kevin Hollinrake (Thirsk and Malton) (Con)
“We should measure welfare’s success by how many people leave welfare, not by how many are added”—so said Ronald Reagan. In 2010 nine out of 10 families in the UK were on welfare. We do not need more welfare; we need more jobs, and better jobs which will pay a national living wage of £9 by 2020, ahead of the estimated living wage at that time.
We have record employment in the UK. Britons have more opportunity and more jobs. During the last Parliament, we created more jobs than were created in the rest of the European Union combined. What we have not discussed in this debate is the effect of the whole package of these reforms—universal credit, tax thresholds, child care and the national living wage. They create an incentive, enabling people to do more work. All those estimates from the IFS and the Adam Smith Institute have not taken into account people’s potential to go out and work more.
Graham Jones
I find the hon. Gentleman’s comments bizarre. This matter is close to home for me. My son and his wife are on tax credits. He does over 40 hours a week, and she is retraining and doing 12-hour bank shifts. I have a granddaughter who is going to suffer a cut of more than £100. Can the hon. Gentleman explain to me how they can retrain any more than they are, where they are going to get extra hours when they are both doing nearly 50 hours, and the impact that that has on my granddaughter? The hon. Gentleman is out of touch.
Kevin Hollinrake
Wages have been subsidised for employers for too long. It is a crazy, convoluted system in which people pay tax and then it is returned to them in welfare. How can that be right? Employers should value their workforce and pay them more. Of course we need to look carefully at the consequences of these changes, but without the reforms in the previous Parliament the tax credits bill would have been £40 billion. We cannot afford that. We have to balance the books, and employers have to take up the slack.
We are still losing £73 billion a year in this country, so we must balance the books, and we can do that by building a new culture. What do I say to an employer in my constituency who employs hundreds of workers? He says that on a Friday night, when the shout for overtime goes up, it is the overseas workers who step forward. We need to build the right culture. The culture in my house was built by my parents, who worked all the hours God sent, not to line their pockets, but to benefit the next generation and set the right example for them.
Freud, distilling the learning from his life’s work, said that happiness depends on two things: love and work. Over the previous Parliament, 700,000 workless families went back to work. We need better jobs, we need to balance the books, and we need to build a new aspirational culture in which work pays.
Luke Hall (Thornbury and Yate) (Con)
Thank you, Mr Speaker, for giving me the opportunity to speak in this debate. I will keep my remarks brief, because I know that a number of colleagues wish to speak.
Specific reforms announced in the Budget should be discussed in the context of the new deal announced by the Chancellor. The problem is that some Members of the House want to pick and choose the elements of that new deal, welcoming the extra spending but never endorsing any of the difficult decisions that the Government have had to take. The current situation is this: Britain is home to 1% of the world’s population, generates 4% of the world’s income, but pays out 7% of the world’s welfare spending. We are currently spending more on family benefits than Germany, France or Sweden.
This Government were elected six months ago with a mandate—an instruction—to balance our books and to reform welfare, as stated in our manifesto. I have listened to Opposition Members, but we have to seek to avoid the mistakes of the past. Spending on tax credits more than trebled under Labour in 10 years, while in-work poverty rose by 20%. In 2010, 90% of families were eligible for tax credits—a disproportionate amount. After these budgetary changes, that will be reduced to five in 10, a much more sustainable number. Ultimately, these changes will return tax credit spending to pre-crisis levels—the level under the Labour Government in 2007-08—and deliver £4.4 billion of savings in 2016. That money can be invested in our national health service.
Luke Hall
I will not give way because time is short.
Where do we go from here? We can either run a high welfare, high tax, low pay economy or continue with the job of reforming our economy to have high pay, low tax and lower welfare. Controlling welfare spending is part of this Government’s wider offer to working people. We are raising the personal allowance so that by the end of this Parliament people will not have to pay anything on the first £12,500 they earn. We are introducing 30 hours of free childcare for working parents—tax-free childcare worth another £2,000 a year. We are freezing fuel duty and introducing the new national living wage. These reforms cannot be viewed in isolation. They form part of this Government’s new wider deal with the British people, supporting people into work and ensuring that we deal with our debts now rather than burdening our children, grandchildren and great-grandchildren with more debt than they can ever hope to repay. That is why I will support the Government this evening.
Maria Caulfield (Lewes) (Con)
I am grateful to be able to speak on this difficult and contentious issue. It is important to consider all the arguments, including economic ones, for why these changes are necessary. Only last week we debated the charter for budget responsibility, and there was unanimous support among Conservative Members for running a surplus in normal times, so that if we again strike a period of economic slowdown, we will have money for our vital services. Many Labour Members acknowledged and agreed with that. We must tackle the country’s deficit and debt, and to achieve that we must reduce public spending.
Maria Caulfield
I will not. Tackling welfare spending is key to achieving that reduction, and we cannot tackle the country’s deficit and debt by leaving welfare spending as it is. The UK is currently home to 1% of the world’s population, yet it accounts for 7% of the world’s spending on welfare. That is clearly not sustainable. If we do not save £12 billion a year by reducing the welfare bill—including £4.3 billion from changes to tax credits—where will we find those savings? From the NHS budget? By cutting social care spending or reducing the education budget? Labour Members could not give one answer when asked how they would reduce the deficit. There is no easy answer—if there were, we would be doing it.
Currently, taxpayers—many of whom earn just above the tax credit limit—are subsidising employers who pay low wages, and that must end. It cannot be right that someone who gets up early, goes to work, works long hours and comes home late does not earn enough to do without welfare in the form of tax credits. Instead of fighting to preserve tax credits, perhaps Labour Members should fight harder to increase wages.
I dispute many of the figures that have been distributed by opponents of these changes. If we look at the facts and take into account all the changes in the recent Budget—including the increase in free childcare, the freezing of fuel duty, VAT and national insurance, the increase in tax thresholds, and the reduction in social housing rents—a typical family will be about £2,400 better off by 2020. As we have heard, pay is already up by 3% this year, and more than 200 firms have committed to paying the living wage. Having come from a poor background and struggled through hard economic times, I firmly believe that the way out of poverty is through work—
European Union (Finance) Bill
Graham P Jones Excerpts(8 years, 11 months ago)
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Mr Gauke
The most important thing we can do is reduce the EU budget because that then focuses the mind of the European institutions to ensure that the money they are able to spend is prioritised in the right way. I come back to how the money is spent and the importance of focusing more on items that will help ensure a more dynamic European economy—more on research and development, for example—and proportionately less on the common agricultural policy. That is something that all hon. Members should support. That has been achieved.
Graham Jones (Hyndburn) (Lab)
I think the Minister has answered my question. It was about the common agricultural policy, and he has just walked into the answer.
Oral Answers to Questions
Graham P Jones Excerpts(8 years, 11 months ago)
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Mr Osborne
I know that my hon. Friend takes a close interest in the issue; indeed, he has been in contact with me about it. We absolutely want to make sure that Britain’s diplomatic reach is as wide as possible across the world, and we should commend my former colleague William Hague who, during his period as Foreign Secretary, despite the Foreign Office playing its part in delivering value for money and getting the best deal for taxpayers, was able to open more embassies and consulates around the world and increase Britain’s footprint on the global stage.
Graham Jones (Hyndburn) (Lab)
T8. The Chancellor’s Government keep talking about the Tory fantasy of a northern powerhouse, which never mentions Lancashire. Is it still his Government’s policy on the Treasury revenues from fracking that 1% will go to Lancashire and more than 60% will go to Whitehall?
Mr Osborne
I gave the original speech on the northern powerhouse in Lancashire, if we count Manchester as being in the traditional county—[Interruption.]
Oral Answers to Questions
Graham P Jones Excerpts(10 years ago)
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Graham Jones (Hyndburn) (Lab)
13. What recent discussions he has had with gambling addiction charities on funding for research into fixed odds betting terminals.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mrs Helen Grant)
I regularly meet groups and individuals interested in gambling. Earlier this year I chaired a meeting of faith groups, care providers and campaign groups to discuss issues of concern.
Graham Jones
It is apt that the Secretary of State has moved from the Treasury to the DCMS, and I congratulate him on his promotion. How much of the £90 million that will be raised from the increase from 20% to 25% in the levy on FOBTs will be given to GamCare?
Cost of Living
Graham P Jones Excerpts(10 years, 6 months ago)
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Guy Opperman (Hexham) (Con)
The cost of living is a legitimate subject for debate. I was interested to hear Ross Smith of the North East chamber of commerce comment on the solution:
“My answer to this is ‘it’s skills, stupid’—alas that doesn’t fit with easy election messages or election cycles.”
To be fair, that was a tweet, playing on Bill Clinton’s famous line in 1992 that, “It’s the economy, stupid”, so I asked Ross to expand on it yesterday as part of my consultation in preparation for this speech. He said that
“the most important factor in raising living standards in the long term is to increase skill levels so that people can play a more productive part in a stronger economy and be rewarded accordingly.”
I could not agree more.
To that end, we must look at apprenticeships, which surely can play a key part in any skills regeneration. The north-east is clearly leading the way. The number of apprenticeship starts in the north-east has increased by 11% since 2010-11, to 38,340. That was up from 18,510 in 2009-10 and 13,500 in 2005-06. In other words, it has trebled since the Blair Government. In my constituency, the number of apprenticeship programme starts has gone from 430 in 2009-10 to 690 in 2012-13.
Of course, it is not just about the number of apprenticeships; it is also about their quality. To that end, I am delighted that the Government have decided that one of the skills pilots will be in the north-east. In fact, it was the North East local enterprise partnership and the Adonis review that suggested the skills pilots that will go ahead. It is to be joined by the Stoke-on-Trent and Staffordshire LEP and the West of England LEP. It is a chance for businesses to engage with their skills and apprenticeship needs so that there is a focus on the particular parts of the economy where growth in jobs is needed in the long term.
There is ample evidence of the successes, whether the opening of the engineering academy in Hexham by Egger, with 40 jobs created, the work done by Nissan, the 38 new jobs in the IT sector, the new apprenticeship jobs in Accenture, whose managing director came to see me yesterday, or the work done by Siemens, particularly in relation to the university technical college in Durham. I strongly hope that the LEP will carry that forward in such a way that the Adonis report will have a true impact.
One cannot address the economy, certainly in my region, which has 2.4 million people, without looking at the Adonis report. No other region in the country has addressed its strengths and weaknesses as the north-east has with that report. It was business led, written by experts, apolitical, hard hitting and realistic. It assessed both the strengths of the local area and the weaknesses. It celebrated assets but acknowledged that there have been successive failures, by successive Governments, to improve job numbers, address skills deficits, increase university starts and generally grow the economy. I am profoundly grateful to all its authors.
At the report’s heart lay a desire for more and better jobs, as it identified the crucial lack of private sector employment. However, as it states:
“More jobs alone will not re-balance the economy. The North East needs higher skilled and higher paid jobs to produce an economy which matches others and provides the quality of opportunities that its residents and young people need to prosper.”
How do we proceed to do that? We must support the necessary investment in apprenticeships, build on the skills pilots and consider the recommendations in the Adonis report—I will not repeat its 24 pages, Madam Deputy Speaker, despite the Irn-Bru you saw me have at the Scotland Better Together event earlier. The seven local authorities must be allowed to go forward. They are coming together and driving forward with a regional voice to match the likes of Manchester which has led the way so well in these matters in the past.
I cannot finish without addressing the motion. On the proposed energy price freeze, I entirely endorse the comment from my hon. Friend the Member for Tamworth (Christopher Pincher) that one should always be wary of geeks bearing gifts. I accept that there is a need for long-term housing supply, but it is a shame that my two Labour authorities are keen to build on the green belt, rather than on the other available sites. I would certainly support action for young people, but it is this Government who have trebled the number of apprenticeships and set up the welcome north-east skills pilot. I find it very easy, therefore, to reject the motion.
Graham Jones (Hyndburn) (Lab)
The hon. Gentleman referred a moment ago to brownfield sites in urban areas, but does he accept that not every brownfield site is economically viable, and is he aware of his local authority’s assessment of brownfield sites and their economic viability? Perhaps he could give some figures on the viability of the sites in that area.
Guy Opperman
I could speak for an hour, and have done so on several previous occasions in the House, on Labour-run Northumberland county council’s failure to provide brownfield sites and its proposal to build on the green belt, whether around Ponteland, Hexham or other sites in Northumberland. Alternatively, there is Newcastle—again a Labour council—which is proposing massive building on green-belt land. We campaigned extensively against the building of more than 10,000 houses on that land.
Graham Jones
Does the hon. Gentleman also accept that building on greenfield sites is sometime cheaper and so provides for affordable accommodation, and that brownfield sites, particularly contaminated brownfield sites, can be comparatively very expensive?
Guy Opperman
I have no doubt that building on contaminated brownfield sites can be difficult, but in my constituency, for example, the police authority has sold the site of a former police station that could be built on perfectly properly. For 20 years, taxpayers—that includes the hon. Gentleman and me—paid more than £1 million to keep the former Stannington hospital site secure, yet nothing was built on it. We now have former government sites being built on and providing homes, but of course that is not green belt. He was keen to make his point about brownfield sites, but he also spoke about greenfield sites. We have huge difficulties in the north-east with investment in and building on greenbelt sites by local authorities.
I have gone on too long and been distracted—
Mr Michael Meacher (Oldham West and Royton) (Lab)
The cost of living crisis has had a fairly good airing in this debate and has been poignantly described in some detail, so I intend to concentrate on the second part of the motion, which concerns the Government’s economic policy and, on the cost of living crisis, to ask the obvious question: was it all necessary? The Government’s answer, as provided by the Financial Secretary in a rather frivolous and distinctly provocative knockabout, was, predictably, yes. He simply repeated the well-worn Tory mantra that we all know: Labour left behind a huge economic mess; there was no other way to deal with it other than through massive cuts in public expenditure; we were “all in it together”; and now the Chancellor’s policies have been vindicated as it has all come right. All four of those statements are flat wrong.
Mr Meacher
I would prefer to respond to those four statements before giving way to my hon. Friend.
First, Labour did not leave an economic mess. The budget deficit in 2007-08, just before the crash, was 2.6% of gross domestic product—one of the lowest in the OECD and about the same as Germany’s. It rose to 11.6% in 2010 only as a result of the bankers’ bail-out. I noted that the Financial Secretary did not even mention the banks today, so I was beginning to wonder whether he had even heard of the bankers’ bail-out. [Interruption.] I am prepared to give way at this point, before going on to answer in some detail.
Graham Jones
Perhaps the Financial Secretary did not mention the bail-out because he was working in financial services as a banker himself?
Mr Meacher
That may well have had something to do with it, but it happened also because the Tories decided to blank out the bankers’ bail-out and put the whole blame on the Labour party. For any objective economist or objective observer of any kind, that is obviously absurd.
Secondly, there was another and much better way to deal with the budget deficit than through semi-permanent austerity. It is costing the country £19 billion a year to keep 2.5 million people unemployed. I simply say that it would have been far better to get these people off benefit and into work through public investment, so that they could earn and contribute to the Exchequer through taxes and national insurance contributions. I well know that the question will come, “How do we pay for that?”, so I shall answer it. This can still be done—and it could have been done three years ago—without any increase in public borrowing at all, despite the Chancellor’s continuous jibes to the contrary, by a further tranche of quantitative easing targeted not on the banks but directly on industry, or by instructing the publicly owned banks RBS and Lloyds to prioritise lending to industry, or by taxing the ultra-rich.
Ian Swales (Redcar) (LD)
The Opposition do not have a monopoly on understanding the pressures on people or on wanting to do something about the cost of living. I represent the fourth poorest ward in the country, and I am well aware of the pressures that my constituents face. They know that they will not cut their cost of living by borrowing money and running up interest costs. They also know that shutting their eyes, going into denial and spending £4 for every £3 of their income will lead to tears. Sadly, the Labour Government did not understand those things, and everything did end in tears. This Government are now having to clear up the mess.
As we have heard, the way to deal with the cost of living crisis is to get the economy moving and to get manufacturing going again, and I welcome all the steps that the Government are taking in that direction after the catastrophic halving of our manufacturing industries under Labour. The Government can do two things about the cost of living: they can take tax and spend measures and they can interfere in industry and business. On tax and spend, I am proud of the Government’s action to scrap Labour’s fuel duty escalator, saving £7 on a tank of fuel, to scrap Labour’s beer duty escalator and to give free child care to 260,000 two-year-olds and, from next year, to three and four-year-olds.
Graham Jones
The hon. Gentleman mentioned the fuel duty escalator, but I wonder why he omitted to mention the rise in VAT from 17.5% to 20%, which also affected the price of fuel.
Ian Swales
The £7 that I mentioned is net of the £1.50 VAT increase.
Interest rates are being kept down, and council tax has been frozen for three years in many areas. Sadly, my Labour council has preferred to take money out of people’s pockets rather than taking Government money to keep the council tax down.
Finance Bill
Graham P Jones Excerpts(10 years, 11 months ago)
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Graham Jones (Hyndburn) (Lab)
Does my hon. Friend also accept that the heat map for the new homes bonus is completely unfair, because it affects the ability of local authorities to spend on other projects such as house renovations, rather than new build? It is a Treasury policy that is not working.
Cathy Jamieson
My hon. Friend makes an important point. New build is of course important, but so too is bringing existing dwellings up to modern standards and ensuring that families have decent accommodation. That is a useful point to which I hope the Minister can respond.
Given that the National Audit Office report was so damning, by no stretch of the imagination could the new homes bonus be called a success. If we couple that with the rest of the record I have described, we might even call it unforgiveable.
Then there is the Help to Buy scheme, which the Treasury Committee dubbed a “work in progress”. It took us some time to get any real answers from the Minister when we probed how the scheme would work in practice. The Opposition desperately want to help first-time buyers, but the Government are making the crisis worse. As I have said, affordable house building is down. Indeed, many commentators, including those the Government might well have assumed would be on their side, are concerned that the scheme is pricing people out of the market. The Government need to take action on the supply side by building more affordable homes, just as the International Monetary Fund has been arguing. I wonder whether the Minister agreed with the IMF when it said:
“There is a risk that, in the absence of an adequate supply response, the result would ultimately be mostly house price increases that would work against the aim of boosting access to housing.”
Let us take a look at how well the affordable rent programme has worked. Labour invested £8.4 billion in the three years from 2008 to 2011, while the Tories will invest just £4.5 billion in the four years from 2011 to 2015. The Government have cut the budget for new affordable homes by 60%. No doubt they will try to argue that they are getting more for less and that this is all about lean Government, but that is not borne out in reality. Affordable housing starts have collapsed—not stalled, not flatlined, but collapsed. The Government like to claim that they are going to deliver 170,000 affordable homes by 2015, but the NAO report confirms that despite the relentless spin, over 70,000 of those were commissioned by the previous Labour Government.
Cathy Jamieson
My hon. Friend makes an important point. She spent a long period working on housing issues in Scotland and taking forward a number of very positive policies in her previous life at Edinburgh city council, so I always listen carefully to what she has to say, and I hope that the Minister does the same. We have to ensure that policies have no unintended consequences. That is why, in this very mild-mannered amendment, we are suggesting a review to look more broadly at the impact of these policies as regards taxation and the Government’s record on housing, to produce information, and to put it in the House of Commons Library so that we can all be aware of it in looking to the future.
This Government appear to care more about spin than substance. Even with a record that shows they have failed on issue after issue, there is more, because their failure to deliver also extends to the NewBuy scheme. So far, 12 months in, the scheme has delivered fewer than 2.5% of the promised 100,000 mortgages. At this rate, they will not meet their target until 2058. In September last year, the Government announced £10 billion-worth of housing guarantees that were due to open for bids in April 2013. However, as the Financial Times reported recently, the plans are in disarray because no financial group has come forward to run the scheme.
On right to buy, the Government extended the discounts, promising one-for-one replacement. Notwithstanding the rhetoric, the reality is that since the extension of right to buy, 3,495 homes have been sold but just 384 homes have started to be built or have been acquired as replacement stock.
Graham Jones
My hon. Friend raises an important point. People were promised that there would be one-for-one replacement in social housing. The fact that it was not like-for-like replacement was another folly in the Government’s policy. It should be put on the record that it is not one for one but one for nine, and that is a tragedy.
Cathy Jamieson
My hon. Friend puts his point powerfully on the record. His phrase, one for nine, will perhaps hit home more vividly than my expressing it as 3,495 homes sold but just 384 starting to be built. It is also right to say that those houses that are being built should meet the needs of people who are seeking either to get their first home or to move.
I do not want to spend too much time on the bedroom tax, but it is sad that the Government constantly say that people are living in homes that are far too big for their needs. I know from my own area and the work I did before coming to this place that many people who live in such housing are rooted in their local community. They do not want to move to another town, village or even another street. If homes of a decent standard that met their needs were available in their area, perhaps they would be prepared to move in order to free up some of the larger family houses.
Cathy Jamieson
My hon. Friend makes another very good point. I know of areas where elderly people would welcome such an opportunity. Indeed, I know of some elderly people who have been persuaded, because they felt it was the right thing to do, to move into good-quality housing where everything is on the flat and they have a small garden, a common area and locally provided services. It is also important that such housing is environmentally friendly and has affordable heating and rent.
Graham Jones
Elderly accommodation is a chronic problem in my constituency and other areas. Does my hon. Friend know whether the Government, as part of their housing strategy, have undertaken any assessment that has identified the need for accommodation for the elderly?
Cathy Jamieson
I cannot answer for the Government, but I would have thought that any Government reflecting on the needs of citizens throughout the country—particularly given the number of elderly people in our communities and the fact that people are living longer—would want to undertake a proper and thorough assessment of future needs and that its projections would be translated into a comprehensive housing plan for the future. If such a plan is in place, I am sure the Minister will enlighten us on it before the end of this debate.
This is about people’s homes, but Government Members seem to think that it is about the number of bedrooms and do not really understand the emotional link that people have to the home that they may have been born and brought up in, that they may have raised their family in, or that they may be set to retire in in their later years. Surely any compassionate society should take that into consideration. We should also take every possible step to ensure that people do not become homeless; we must not let that become another scandal.
I will finish soon because others wish to speak on this important issue. Ministers promised last summer that the Government were on course to smash their ambition to release enough land for 102,000 homes, but they have now conceded that they are only a third of the way towards that target. I will not give into the temptation to go back over every Government failure, but they have missed target after target. After all the warm words, hot air and relaunches, it is clear that this Government are making the housing crisis worse, not better.
People who are out in the cold looking for their first home, looking to move, or looking for somewhere to live out their later years in comfort without having to worry whether it is affordable might look back at Labour’s record. There were 2 million more homes under Labour and we built 500,000 affordable homes. A million more families were able to buy their own homes, housing standards improved and homelessness fell by 70%.
Graham Jones
My hon. Friend has made some valuable points in what is an excellent speech. Does she agree that the Government and certainly the Treasury ought to consider in the review what impact a VAT cut would have on the construction industry and on the renovation and refurbishment of properties? That should be part of the review because half the country is being left behind.
Jack Dromey
My hon. Friend is right: tough decisions had to be made. All of us in our constituencies have seen the benefits of that decision to invest in the decent homes programme: it has transformed the lives of millions of tenants.
Why have the Government made these mistakes? They started with the catastrophic error of judgment of cutting £4 billion in affordable housing investment in 2010, which led to a 68% collapse in affordable house building. What we have had subsequently are a succession of false dawns: four “get Britain building” launches, 300 separate initiatives and thousands of press statements. I once said of the former Housing Minister that if we had a home for every press statement that he issued we would not have a housing crisis.
My hon. Friend the Member for Kilmarnock and Loudoun looked at the track record: NewBuy was to produce 100,000 homes, but thus far there have been 2,500. When the Minister comes to respond on NewBuy, he might care to refer to the recent Help to Buy announcement, when the Prime Minister ruled out, from the Dispatch Box, any question of its being used to buy second homes. I tabled a written question:
“To Mr Chancellor of the Exchequer…with which organisations or companies (a) he and (b) other Ministers in his Department have met to discuss the mechanism that will be put in place to stop people using the Help to Buy Mortgage Guarantee Scheme to purchase a second home.”
In answer, I was told that
“Treasury Ministers have met with a number of companies in the mortgage industry to discuss a wide number of issues, such as the Help to Buy mortgage guarantee scheme, including through the Home Finance Forum.”—[Official Report, 1 July 2013; Vol. 565, c. 408W.]
Has a mechanism been agreed?
Graham Jones
My hon. Friend makes a valid point regarding going from First Buy to homebuy to Help to Buy. When the Government talk about affordable housing, is there any explanation of why the upper limit in the previous schemes of £280,000 was increased to £600,000 in the current scheme? How does that qualify as affordable housing, and how does it help people who are struggling? That is surely redirecting money at people who could afford a more modest property.
Jack Dromey
Those of us on the Opposition Benches stand for homes for all; the Government stand for homes for the better-off.
Another example of hype was what the £10 billion guarantee scheme would deliver, including in investment in the private rented sector. However, the Government have failed to get anyone to run the scheme for them. Another example—there are endless examples—is self-build. The former Housing Minister said in opposition that the Conservatives would oversee a housing “revolution” led by self-build. He said they would have an action plan in government to double self-build homes. He introduced that action plan in 2010. He then tried to conceal whether it had worked, but ultimately the Information Commissioner forced his hand. We now know that self-build has fallen under this Government, not increased.
Jack Dromey
The hon. Gentleman is absolutely right. All the benefits that I have referred to, plus others, would result from such a programme. If we were to invest in retrofitting as well as in new build, we could tackle some of the chronic problems that are costing the national health service £2.5 billion a year. We could also tackle the problem of a whole generation of young people being held back at school because their overcrowded homes impact on their ability to do their homework. That impacts on their exam results, which in turn impact on their lifelong earnings potential. If the Government were to invest in housing as we would do, they could also reflect the demands of an ageing population. They would be able to help people of all tenures to downsize, rather than using the obscene weapon of the bedroom tax, which has no place in a civilised society.
Graham Jones
My hon. Friend has made a powerful point. The Government’s policy is totally focused on an under-supply of housing, but he makes the valid point that the Treasury should be looking at the other part of the problem, which is the over-supply of housing and its consequences. The Treasury needs to take this matter on board. In constituencies such as mine, people suffer chronic ill health as a result of poor housing.
Jack Dromey
My hon. Friend makes a good point. This is not just about new build, where appropriate; it is also about retrofitting, about regeneration and about bringing empty homes back into use. It is also about recognising that the housing market and the problems associated with housing should not simply be seen through the prism of London and the south-east. Housing markets vary considerably nationwide.
Graham Jones
Does my right hon. Friend agree that the Treasury does not seem to be taking account of evidence which shows that the cost of private renting housing, per unit, is roughly twice the cost of social housing? At that rate, the more reliance there is on the private rented sector, the higher the housing benefit will be.
Mr Raynsford
I entirely agree. As my hon. Friend the Member for Birmingham, Erdington pointed out, it is important to support the private rented sector, but it must be helped to do the job it does best, which is providing for people whose incomes are higher than the incomes of those who have traditionally depended on social housing.
The Government have created a problem for themselves by trying to use the private rented sector, with high rents, as a substitute for social housing, with lower rents. That is inevitably a recipe for more dependence on housing benefit. It traps people who are dependent on benefit, which is bad for them, and it increases the bill for housing benefit. What we need are policies that encourage both the growth of a private rented sector for people who can afford to pay a market rent for their housing and will not be dependent on benefit, and, in parallel, the revival of a social housing sector that meets the needs of those who require housing at sub-market rents.
Mr Raynsford
I entirely agree. I happen to be the president of Youthbuild UK, which is one of the bodies that has been campaigning specifically for more effective opportunities for young people, in particular disadvantaged youngsters, to get the training and skills necessary to secure employment in the construction industry. I wholly endorse what my hon. Friend says.
There are benefits in terms of the economy. There are benefits in terms of employment. There are wider supply chain benefits. I am thinking in particular of all the industries that provide the materials, furniture, furnishings and equipment that go into houses when they are built. When people move into a house, they need carpets, furniture and various fittings, and all of that additional demand will be good for the UK economy. There is therefore a real multiplier effect from an expanded house building programme.
It is not just about new homes. As has been said, it is also about retrofitting existing homes that are in poor condition. Here the Government have got themselves into another mess, but not through lack of a good idea. The idea behind the green deal is a sound one: that we try to put in place a mechanism that enables people to borrow the money required to fund improvements in the energy efficiency of their home and they can then pay for that out of the savings they make through reduced bills because the home demands less energy. That is in principle a very good idea. The problem is that the scheme the Government have managed to come up with after quite a long gestation period has proved so complex, opaque and financially disadvantageous that it is at present struggling to get any takers.
I admire the ambition displayed by the Minister responsible for the scheme in trying to get it off the ground. He has put a huge amount of effort into trying to promote it, but as it is currently constituted it is simply not attracting the interest of the British public, and without doing that it will not fly, so we will have a continuation of the problems of energy inefficient homes that are bad for the environment because they pour out unnecessary carbon emissions. That will be bad for the fuel poor who end up paying more for fuel than they need to, and it will be bad for the construction industry because all those potential jobs in retrofitting existing homes will not be taken up.
Graham Jones
Does my right hon. Friend agree that it is an indictment of the Government’s shambolic housing policy that they rejected the idea that private landlords should in the near future be forced to implement the green deal and energy efficiency measures in properties? The Government have put that backstop date back to 2018, which allows private landlords still to have houses that do not meet the lowest of energy ratings for many years.
Mr Raynsford
I am grateful to my hon. Friend for highlighting that, because it is a cause of real concern that the energy efficiency programmes that were in place have come to an end, and as a result of the introduction of the new ones—the green deal and the energy company obligation programme—the level of activity on energy efficiency retrofitting has plummeted.
I talked to a housing association, active in my constituency, that has done a magnificent retrofit of about 1,000 properties in Charlton. That has hugely improved the comfort of its tenants, who can now keep warm at much less cost. It has improved the appearance of the estate and has won plaudits from everyone, and it was done with a work force who included a number of young unemployed people from the area, who were trained specifically to be able to take up the advantages of employment as part of the scheme. It was an admirable scheme. When I was congratulating the housing association on it, the one and only disappointment came when it told me “Well of course this was funded under the old community energy saving programme—CESP—which made it possible and has now ended. We would probably not be able to do this again if we were starting from scratch today.” That is an obvious problem.
Mr Raynsford
The thrust of my whole speech is about the importance of the Government finding more effective measures to stimulate investment in housing in all sectors. That includes bringing empty properties into use, improving the existing substandard housing stock and building new homes that are needed to increase the supply. The case is overwhelming, but, sadly, as the figures cited in this debate so far have shown, the Government are failing to meet the needs. I am not going to go into that in detail, because it has already been covered.
I wish to draw attention to the new homes bonus. It an extraordinary scheme, and our Front-Bench spokesperson made some pertinent remarks about it. It was launched by the Government as, supposedly, the panacea for the problem of opposition among some local communities to new house building in their area. The theory was that if a financial incentive was given to councils and to communities for agreeing to build new homes, we would get a different attitude—we would have enthusiasm for new house building rather than hostility. And so the new homes bonus was launched.
The new homes bonus is a very expensive scheme. As the National Audit Office report demonstrates, it is costing £668 million in the current year, but that is due to rise to £905 million next year, to £1.1 billion in 2015 and on beyond that, because it is a cumulative bonus that is paid for a six-year period. I have given only the individual one-year costs. When we add in the cumulative costs derived from previous years’ awards, we find that by 2018-19—that is six years ahead, so at the end of the six-year period—on current trends, expenditure on the scheme would be £7.5 billion. It is a very, very expensive use of public money, which is mostly taken from local authorities. The Government talk about it as though it is a Government scheme, but they are putting in only £250 million a year, with the rest coming as a top-slice from local government funding.
Graham Jones
My right hon. Friend is making a strong argument about the new homes bonus, which is top-sliced from local authorities and given back to those who build. On other policies, such as empty homes and retrofitting, local authorities that have had their income reduced substantially, and are in low-demand areas such as mine and unable to build new homes, encounter a perverse incentive, whereby a slew of issues, such as empty homes and dealing with the private rented sector, cannot be dealt with. The money is simply given to authorities that are cash rich and are building more homes, and it is not really in their interests to build any more because they have got enough money.
Mr Raynsford
My right hon. Friend makes a valid point, and it is a further argument for the serious and thorough evidence-based review of the subject that the Government ought to be undertaking. It is shameful that they are continuing to tinker with this failed scheme at a time when there is such an urgent need for the limited funds that are available to be used to best effect to stimulate investment in housing and to have the beneficial economic effects that my hon. Friends and I have been talking about.
The amendment specifically calls for a review of the operation of REITs and their interaction with the housing market. That is important because the scale of investment necessary to secure the level of house building and home improvement we need will require a combination of public and private investment. We must therefore have measures that encourage more private investment in both private and social rented housing. Institutional investment in private renting has been a bit of a holy grail for many years for people who saw it as a way of ensuring an improved private rented sector driven by responsible investors who would be keen to see high standards of investment and management.
Graham Jones
I am grateful to my right hon. Friend for giving way once again. Will he congratulate my local Labour authority, Hyndburn borough council, which has private institutional investors? The council has got a pension company to invest in private lets to the tune of £14 million and is using that capital to regenerate and provide affordable housing for rent for people who need it. Does he not agree that there should be more such schemes in the UK? That flagship programme has appeared on many television programmes and I am proud to say that a Labour authority is doing it.
Mr Raynsford
My hon. Friend makes a valid point and highlights the fact that throughout the country, there are a series of partnership agreements between the public and private sectors which are successfully helping to attract increased investment to meet social needs. That is what we need to encourage. I very much welcome amendment 57 because it calls for precisely that: it calls for a review of the REITs programme and how it interacts with the housing market. The thinking behind it is entirely about how we can ensure more effective blending of public and private finance to meet housing needs.
I have gone on quite long enough, so I will let others contribute. I conclude by saying that current policies are not working. We have a stagnant housing market, which is showing very limited signs of recovery. We have massive unmet needs., and we have huge economic problems which should be addressed by an expanded house building programme. I hope the Government will change course.
Mr Gauke
The hon. Lady can rest assured that I will address that very point, if not necessarily every point made in the wide-ranging debate.
The proposal set out in amendment 57 is that
“The Review shall consider…tax measures in place to support house building; and…what steps HM Government have taken to support house building”
but the Government’s view is that there is no need to postpone the changes to the REIT regime, as the proposed review would add little value at this time. There is something of a routine here of the hon. Lady requesting a review and me turning it down, and she asks so nicely that I feel almost pained in doing so, but the reason we believe in this case that a review would add very little is that there are not yet any REITs with substantial housing assets on the market, so it is too early to assess any interaction of REITs with the housing market. We do not accept the amendment and I urge her not to press it to a vote.
The new changes to the REIT regime are an example of tax measures to support house building. As REITs represent the supply side of the property market, any improvements to the REIT regime are expected to have a positive impact on the market.
The hon. Lady made a couple of points on how the REIT regime works: the first, which I believe we touched on in Committee, was whether the regime could support people who want to own their own home. It is worth pointing out that residential REITs can provide accommodation only in the private rented sector, so they are not designed, nor could they be used, for the purpose of home ownership.
The second point, on which the hon. Lady intervened, was on the relationship with social housing and what role REITS could play in that sector. There was full consultation in summer 2012 involving a number of one-to-one and group meetings with interested parties in the social housing sector. The reality is that yields on, for example, affordable rents do not appear to be high enough to attract investors into that sector, but I assure her that discussions are ongoing with non-social housing entities and other interested parties to explore the possibility of residential REITs. If a workable residential model can be found, it might be possible to use it to further a move into social housing, and we certainly would not rule that out. At the moment there appears to be no interest in using REITs for those purposes, but we are entirely pragmatic about that.
We believe that REITs have a valuable role to play and we do not want to delay the implementation of the schedule while we conduct a review from which there is little to be gained. For those reasons, I urge the hon. Lady to withdraw the amendment.
We discussed wider housing policy, but I do not intend to be drawn into a lengthy, general debate on housing. I just point out that we announced £5.4 billion of additional support for housing in the last Budget, building on the £11 billion this Government have already committed to investment in housing over the spending review period. Last week’s spending round announcement confirmed a total of £5.1 billion-worth of investment to support housing in England from 2015-16 to 2017-18; £3.3 billion of that new funding is for affordable housing over those years and will support the delivery of 165,000 new affordable homes in England over the next three years. I can also point out some of the recent housing numbers. Housing building starts in England rose by 4% in Q1 2013, seasonally adjusted. Housing starts are 15% higher than in the same quarter last year. Starts are now 62% above the 2009 trough.
Mr Gauke
No, I want to give the hon. Lady a moment or two at the end of the debate to respond to the points that I make.
The amendments before us, alongside the changes that already form part of the Bill, show the Government’s continued support for REITs and the UK property sector. I believe the Government amendments will be welcomed by interested parties. The delay that would result from Opposition amendment 57 would be unfortunate and I urge the hon. Lady to withdraw it.
Oral Answers to Questions
Graham P Jones Excerpts(11 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Graham Jones (Hyndburn) (Lab)
Q4. What discussions he has had with the Secretary of State for Communities and Local Government on levels of construction output.
Dr Alan Whitehead (Southampton, Test) (Lab)
Q11. What discussions he has had with the Secretary of State for Communities and Local Government on fiscal incentives for the construction of affordable housing.
The Chief Secretary to the Treasury (Danny Alexander)
The Government are committed to supporting new housing supply while maximising value for money. The Government committed £4.5 billion to support 170,000 affordable homes over the spending review period, and we have added a further 30,000 to that figure through the guarantee programme that was announced last year and extended in the Budget a few weeks ago.
Graham Jones
In my constituency, that would ring hollow. I note that all three insolvency industry associations stated this week that nearly one third of construction companies in the north-west of England were at risk of financial collapse, which is a higher rate than in the non-construction sector of the north-west’s economy. Is not that an indictment of the Government’s record in the north and their failure to get growth going in the regions?
Danny Alexander
The hon. Gentleman should recognise that—while the previous Government presided over a decline of more than 400,000 in the number of affordable properties—the Government’s action to increase the numbers by 200,000 is a welcome support to the construction sector, as is the Help to Buy scheme that we announced in the Budget, which will produce a significant additional demand for properties to help the companies to which he refers.
Danny Alexander
I agree wholeheartedly with my hon. Friend. Dealing with the deficit and repairing the mess that the Labour party made in the public finances must remain the No. 1 priority for the Government, and indeed for all Members of the House.
Graham Jones (Hyndburn) (Lab)
T7. The Government’s housing policy focuses on new build which is exempt from VAT, but in my constituency one in 13 properties is empty, and building companies tell me that they rely on refurbishments which are not VAT-exempt. They are really struggling. Do the Government recognise that building companies in areas such as mine are being penalised in that way?
The Exchequer Secretary to the Treasury (Mr David Gauke)
The difficulty is that if we were to reduce VAT on repairs and refurbishments, that would have a substantial fiscal cost. It would result in more borrowing and that is not something we can afford because of the circumstances we were left.
Finance (No. 2) Bill
Graham P Jones Excerpts(11 years, 1 month ago)
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Alison Seabeck
That was wonderfully well put, as usual. No, I am aware of no such thing, and that bothers me hugely. It ought to worry Ministers; it will be interesting to hear what they have to say on the matter.
My constituents are struggling under the pressure of the spare room subsidy. They rightly want to know why it is fair for the Government potentially to offer a spare house subsidy of up to £600,000 to people who already have a home. That sum would buy a mansion in Plymouth.
Graham Jones (Hyndburn) (Lab)
Startlingly, the previous scheme had a limit of £280,000. Why have the Government increased the ceiling to £600,000? Surely homes of £600,000 are not affordable.
Alison Seabeck
No, indeed. Someone looking at the issue from the outside, rather than from the Government Benches, could cynically suggest that the Government are seeking to build houses and support house building in the south-east rather than in the rest of the country. The figure has far more resonance in terms of trying to get people into the market in the south-east. The issue is not clear.
Oral Answers to Questions
Graham P Jones Excerpts(11 years, 3 months ago)
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Mr Osborne
We have a very clear commitment to reach that £10,000. We have not put a time scale on it, but even under the plans we have already put forward, that level will be reached with inflation increases before the end of this Parliament. This is a good example of two parties coming together to help working people across this country.
Graham Jones (Hyndburn) (Lab)
T10. In the autumn statement of 2011, the Chancellor allocated £5 million to combat metal theft, which through Operation Tornado has been highly successful. With that funding coming to an end, was that a knee-jerk reaction or is the Chancellor going to continue it?
Mr Osborne
I am happy to look at the funding for the metal theft initiative, but I know that the Government have introduced regulation to clamp down on this crime, which can of course endanger people’s lives.