Budget Resolutions and Economic Situation

Lord Pickles Excerpts

Friday 20th March 2015 Commons Chamber

[The Secretary of State for Communities and Local Government (Mr Eric Pickles)]

This Government have put Britain on the road to economic recovery. In 2010, our country was on the cliff edge, staring into an abyss of financial oblivion. The economy was stalling, unemployment was rising and the national debt was spiralling out of control. From day one, pulling the country back on to safer, more secure ground was our top priority.

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

Will the right hon. Gentleman give way?

[Mr Pickles]

In a few moments I will. It would be rather nice if I was able to start the speech, because I am sure that the hon. Gentleman would like something to critique.

Five years later, it is a different story: we have stepped back from the cliff edge, our growth rate is faster than that of anywhere in the G7, and our job creation is the envy of the developed world. It all confirms the old Yorkshire proverb, “Where there’s muck, there’s brass” and, boy, did Labour leave us a lot of muck. We have managed to start cleaning up the mess only because we stuck to our long-term economic plan. We stood our ground when ferocious economic headwinds blew in from the eurozone. We did not listen to those who said that the only solution was more borrowing and more spending beyond our means. Nobody now talks about plan B. We stood firm, and as a result today the deficit has been brought down by a half. Living standards are rising and a record number of people have found jobs. With our council tax freeze, there is more money in people’s pockets. The Budget is built on economic success. It will make our economy more resilient and protect taxpayers’ money. It will bring down the deficit and ensure that Britain pays its way in the world, so much so that the shadow Chancellor said that there is nothing in the Budget that Labour would vote against. Now the hon. Member for Blaydon (Mr Anderson) will tell me why the shadow Chancellor was wrong.

[Mr David Anderson (Blaydon) (Lab)]

I will tell the right hon. Gentleman what I want to tell him. He cited a Yorkshire phrase, but what we have seen over the past five years is closer to another Yorkshire phrase: “What’s thine’s mine, what’s mine’s my own.” That is how they operate in the right hon. Gentleman’s party, and they always have.

[Mr Pickles]

I kind of regret giving way to the hon. Gentleman. That sort of bellicose description is not worth considering. After all, Yorkshire is at the very heart of our economic growth, but naysayers like him—

[Jim Fitzpatrick]

rose—

[Mr Pickles]

I shall give way to my dear friend.

[Jim Fitzpatrick]

I thank the Secretary of State for giving way. I apologise for interrupting him prematurely at the beginning of his speech. I was just very curious to know whether, in outlining the economic recovery, he was going to refer to the report from the Institute for Fiscal Studies, which was covered by yesterday’s Telegraph and today’s Guardian and says that the 300,000 immigrants have fuelled the recovery. What does that do to the UK Independence party’s fox and some of the Members on the Government Benches who have been raising immigration as a scare story?

[Mr Pickles]

Of course if we create more jobs in the UK than in the rest of the European Union combined, it is not surprising that we are doing well, and that people are leaving our great friends in France to come here to increase our prosperity. I am surprised that the hon. Gentleman, who has such a distinguished record of supporting the firefighters, did not wish to congratulate the Government on changing the rules to ensure that spouses of firefighters who die in action will be able to remarry, should they desire to do so, and not lose their pension.

[Mike Gapes (Ilford South) (Lab/Co-op)]

The Secretary of State has referred to halving the deficit. Will he remind us of the policies his party was advocating in 2010, which should have eliminated the deficit by now? Will he admit that this Government are a total failure in respect of their own aims?

[Mr Pickles]

Essentially, what the hon. Gentleman has said is that his party created an almighty mess and we have not been quick enough on the broom. He thinks we should have cut deeper, kicked harder and been tougher, but we are a compassionate coalition Government and we had to take those things into consideration. Had we gone any faster, there would have been social consequences. We have gone about the process without causing the problems that the hon. Gentleman would have been so difficult about.

[Gregory Barker (Bexhill and Battle) (Con)]

Does my right hon. Friend agree that these interventions show that Labour Members not only do not have a long economic plan—[Laughter.] I mean long-term economic plan. Not only do they not have a long-term economic plan, but they do not have a clue.

[Mr Pickles]

My right hon. Friend is prescient in all things, and his Freudian slip is absolutely right: Labour has a non-economic plan and it is not going to work. I do not think that they will get a chance to use it.

The Budget will also ensure that our economic recovery continues to benefit every area of the country. Some claim, as we have heard this morning, that London and the south-east are reaping all the rewards, but that is nonsense. Nowhere is generating jobs faster than the north-west, and Yorkshire is creating more jobs than the whole of France. Our French friends may have given us liberté, fraternité and égalité, but my old home county is providing creativity, industry and Yorkshire Tea.

Our economy is growing because this Government understand what makes the economy tick. We believe that all growth is local and that local people are best placed to make decisions about their area. That is especially true where we have improved planning and increased house building. Labour’s top-down housing targets trampled on the democratic wishes of local communities and built nothing but resentment. Majestic promises of eco-towns never got beyond the paper they were written on. We have taken a more practical approach: rather than relying on the long arm of Whitehall, we are trusting councils and communities to make their own decisions about planning and housing and to steer new developments towards the right location. The result is growing public support for new housing, which has almost doubled over the past four years. More than 700,000 new homes have been delivered since the beginning of 2010 and house building is now at its highest level since 2007. Last year, locally led planning systems gave permission for 253,000 homes across England.

There is always more to do. We want to increase significantly the number of homes we build, to sustain economic growth and support the aspirations of hard-working families. Instead of dictating change, we are helping local areas that want to build more homes and boost growth. That will include supporting the development of locally led garden towns in communities such as Bicester, Basingstoke and Northamptonshire. Together, they will deliver nearly 40,000 new homes.

We have appointed board members to oversee Ebbsfleet’s urban development corporation, and marketing will begin on the key Northfleet embankment site. The new garden city on the Thames estuary will provide up to 15,000 new homes, create opportunities for businesses and generate thousands of jobs. We have also given the green light to 20 housing zones across the country and will continue to work with eight other bids. Together with 20 planned zones in London, these will support the delivery of nearly 100,000 homes all on brownfield land. That is exactly where the public want to see new housing so that we can protect our precious green belt and our beautiful countryside.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

On the subject of producing housing where the public need it, I am sure the Secretary of State knows that there are 19,000 families on the waiting list for housing in Islington, that the average price of a home in Islington is £630,000, and that 40% of my constituents live in social housing. Is he able to provide housing for Islington people? What is his plan for affordable housing in central London?

[Mr Pickles]

I have just explained that to the hon. Lady. Members on the Government Benches do not look down their noses at people who have white vans outside their houses. Those of us on this side of the House understand the importance of this. That is why it is we who will be working on brownfield sites so that the hon. Lady can occasionally visit the poor in her constituency.

[Emily Thornberry]

Rather than making cheap and rather silly points, which demeans the right hon. Gentleman, would he like to answer my question? Where is the Government help for building affordable housing in central London?

[Mr Pickles]

We are talking about something in the region of £400 million in London. The hon. Lady needs to understand that she is the queen of the cheap point. None of us will forget the tweet she sent out—[Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Just to help everybody, it should be the Chair who everybody speaks to and addresses.

[Mr Pickles]

Thank God you’re here, Mr Deputy Speaker. I was very happy to address the hon. Lady, but you were absolutely right to pull me up on that point of etiquette.

The plans are there; they are published. If the hon. Lady cannot be bothered to look at the plans and work with her local council, that is hardly our fault.

[Emily Thornberry]

Nonsense. Tell that to Mount Pleasant.

[Mr Pickles]

I think the hon. Lady should address her constituents directly rather than doing so through the Chair.

Our large sites programme has already unlocked the construction of more than 100,000 houses. We have now extended support for a site at Northstowe near Cambridge, which will benefit from 10,000 new homes on Government-owned land. We are supporting house building in the capital with a £97 million grant and a ring-fenced 50% share of local business rates to support the regeneration of Brent Cross and unlock 7,500 new homes. The London Land Commission will produce a database of public sector and brownfield sites, so that the Mayor can identify potential sites for new homes. These commitments to build more homes will be matched with support for hard-working people in the housing market, whether they are buying or renting.

[Robert Neill (Bromley and Chislehurst) (Con)]

Would my right hon. Friend care to note that the London Land Commission, which he has delivered with the current Mayor, reflects the need to assemble and deliver building on brownfield land in London, which the Labour Mayor of London was talking about years ago but never delivered while he or a Labour Government were in charge of London?

[Mr Pickles]

I do not really understand why that was. Labour’s solution to this brings to mind their solution of garden cities. They promised five but could not deliver five, so they promised 10 and never delivered 10. The London Land Commission is indeed a good thing.

The resale of shared ownership properties will be streamlined, and will make it easier for tenants in the private rented sector to sublet or share space. We will also extend our support for home ownership, which has already helped more than 200,000 households to buy or reserve a home. Buying our first home appeals to the very British sense of aspiration and self-reliance. It is a reward for hard work and an investment in the future—a place to settle down and to raise a family. A new Help to Buy ISA will give a much needed boost to people saving to get on the housing ladder. The Government will contribute an additional 25% of their savings up to a total of £3,000. In other words, if someone saves £12,000, the Government will give them an extra £3,000, making £15,000 in total.

We will also help those who want to rent an affordable home. By 2010, the net loss of affordable rented housing under Labour had reached the astonishing figure of 420,000 homes. By contrast, this Government will be the first since the 1980s—[Interruption.] Opposition Members should listen to this, because it is important. This Government will be the first since the 1980s to end their term with a larger stock of affordable housing, and I think that is a remarkable achievement. Our affordable housing programme will achieve the fastest rate of affordable house building for 20 years and will deliver more than 500,000 new affordable homes by 2020.

[Sir Andrew Stunell (Hazel Grove) (LD)]

Will the Minister give way?

[Mr Pickles]

I just want to finish a couple of points, but then I will gladly give way to my old friend.

During the last five years, councils have built more homes than in the previous 13. Council house building is now at a 23-year high. We shall now start working with Keith House, Natalie Elphicke and the Local Government Association to implement the new housing finance institute, which will help build even more.

[Sir Andrew Stunell]

The Secretary of State and I are not always exactly on the same page, but we absolutely are on this. May I draw to his and the House’s attention the fact that we have indeed increased the number of social and affordable homes in this Parliament and that the 4 millionth was opened in my constituency just 18 months ago?

[Mr Pickles]

I am always happier when I am on the same page as my right hon. Friend, who was an immensely distinguished Minister in the Department for Communities and Local Government. He should take considerable credit for keeping us focused on affordable houses, and he should share in the triumph.

We are considering ways to deliver private rented accommodation for homeless families, so that councils can help those who are in most need, while reducing the reliance on expensive temporary and bed-and-breakfast accommodation.

This Government have put councils and communities back in charge of housing and planning. We have adopted the same approach to boosting economic growth. Local areas now have the breathing space and support they need to find their own economic solutions. We have ended the failed attempt by Labour to run the economy through regional quangos and have devolved powers and funding to enterprise zones and local enterprise partnerships. We have trusted local people, and they are now delivering jobs and growth in their communities.

Twenty-four enterprise zones across England have created a whopping 15,500 jobs, attracted more than 430 businesses, secured more than £2 billion of private sector investment and built world-class business facilities and transport links. These enterprise zones are gaining momentum as local centres of excellence—whether with biotechnology in Nottingham, advanced engineering in Lancashire, creative industries in Bristol or aerospace in Torquay.

We will now create two new enterprise zones at Plymouth and Blackpool, subject, of course, to business cases, and extend up to eight existing zones, so that more communities can benefit from these local engines for growth. We will also support the creation of a Croydon growth zone to create 4,000 homes and 10,000 jobs.

The message is clear: where cities grow their economies through local initiatives, we will support and reward them. Starting next month local authorities in Cambridgeshire and Greater Manchester will be able to retain 100% of any growth in business rates, so that they can support businesses and reap the benefits. Unlike what the Labour party is proposing, we are not raiding the budgets of local authorities to pay for this.

[Robert Neill]

May I particularly congratulate my right hon. Friend, because I honestly believe that this is one of the most significant steps towards devolution for local government that we have seen in 50 years? Will he confirm that the principle of 100% new business rate retention and the opportunity to pool health care funding will be available to other parts of the country if local authorities produce appropriate collaborative arrangements?

[Mr Pickles]

Absolutely. My hon. Friend was a distinguished Minister in my Department. Right from the very beginning, all this was envisaged under the Localism Act 2011. Rather than trying to move all local government at the same speed, we will of course devolve this power to those councils that are capable of managing larger budgets and delivering a deal. I envisage that within the next five years most local authorities will use such a system. For those that do not, the Prime Minister made it clear in a speech a couple of weeks ago that it will be our intention to get the retention up to 66%. I shall be disappointed if we cannot exceed that, but for most local authorities self-sufficiency and being able to raise their own finance locally and to spend Government money sensibly, and so on, is the future. I have great hopes for what is happening in Greater Manchester, and it shows that people of good will right across the political spectrum can work together.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

Can the Secretary of State clarify whether all new business rates will be retained, or whether it will be all incremental business rates in addition to those currently predicted?

[Mr Pickles]

It is very straightforward; it is the same scheme that has existed since the retention scheme was introduced. It is the growth in the business rates. If a council goes out of its way to bring in new investment, it is only right that it should not be penalised for doing so, as it would have been under Labour. It should reap the benefits. I know that Opposition Members have difficulty with the idea that people should be rewarded for creating wealth and working for the common good, but that is how it is going to be. The Government are helping to expand local economies, and we also want to expand powers for local areas. As I have said, we have already devolved significant powers to the Greater Manchester combined authority.

[Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)]

Will the Secretary of State give way?

[Mr Pickles]

I will in a moment.

[Mr Brown]

Will he give way on that point?

[Mr Pickles]

In a moment. The right hon. Gentleman is a very distinguished Member, but he should wait for his turn like the rest of us.

That devolution of powers to Greater Manchester is the most historic development in civic leadership for a generation, and it will enable Manchester to support business growth, skills and better health and social care. A new devolution deal for West Yorkshire will give local councils greater responsibility for developing local skills, transport and employment opportunities. Across the country local areas are benefiting from new powers and resources to help their local economies flourish. I will now give way to the very distinguished right hon. Gentleman.

[Mr Brown]

The Secretary of State has not mentioned local authorities in the north-east of England—inadvertently, I am sure. He also failed to answer the question put to him by my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah), and he has failed to make the case for the balkanisation of the business rate. Mrs Thatcher’s legacy was to have the business rate raised on the ability to pay and distributed on the basis of need—I am sure that I can remember her saying that to the House. Why is he allowing it to be balkanised?

[Mr Pickles]

The right hon. Gentleman is a very distinguished Member of this House and no doubt has many things on his mind, so perhaps he has temporarily forgotten that we created a combined authority for Newcastle last year, which I understand is flourishing. Indeed, I anticipate that it will be the beneficiary of more devolution in the not-too-distant future. He talks about the balkanisation of the business rate, but it seems to me that if we are offering rewards to people who have worked hard in a local area, it would be grossly unfair to take money away from Newcastle just because it has done particularly well. He will also know that the Government are currently reviewing the business rate to ensure that fairness continues and that greater fairness is possible. I am sure that I speak on behalf of the whole Government when I say that we very much look forward to hearing the contribution that he will want to make on that.

The 2014 and 2015 growth deals are enabling 39 local enterprise partnerships to join up with councils and businesses to decide their own priorities. The funding can be used for investment in housing, roads, broadband or any other infrastructure. Some £12 billion will go towards local economies, and we have already agreed £7 billion of local projects. The result will be more new homes and infrastructure and greater support for local businesses to train young people, enhance skills and create jobs.

Britain has stepped back from the brink and started to recover from the deep failures of Labour’s great recession. Under our watch, the deficit has been cut and businesses are growing. Confidence is returning and house building is increasing. The number of first-time buyers is at a seven-year high and lenders are offering the most competitive range of mortgages ever. Local economies are growing and using their new powers to support businesses. That has happened under our watch only because this Government have provided the right economic leadership and because our long-term economic plan is working. The Budget will keep us on the road to economic recovery and prevent Britain from returning to the chaos of the past.

--- Later in debate ---

[Hilary Benn]

I agree that that is a particular feature of the housing market in London. The Government could do two things: the first is to say that homes in this country cannot be advertised for sale in other parts of the world before they are advertised in the United Kingdom, so that people in this country have an equal chance to buy them; and the second is to give local authorities greater power to disincentivise those who leave their homes empty, or who put in a stick of furniture and claim that they are occupied.

[Mr Pickles]

As far as I understand it, that is a new policy. Quite a lot of estate agents’ businesses are on the web these days, so how would that policy be possible? If adverts are on the web locally, they are on the web internationally. Will the right hon. Gentleman explain how it will operate?

[Hilary Benn]

There is indeed the web, but the right hon. Gentleman will be well aware, having studied the market, that some companies make a special effort to market properties elsewhere and do not make a similar effort to market them in this country. He surely does not agree with that. Everyone in Britain should have the same right and opportunity, and companies should not make a deliberate effort to try to sell to people from other countries before those in London have a chance to access such properties.

[Robert Neill]

Given that this is a completely new policy that, as far as we can see, is being made up as we go along—

[Mr Pickles]

Changed.

[Robert Neill]

And it is being changed, so will the right hon. Gentleman tell us exactly what the policy is? What will the policy cost, how many bureaucrats will be needed to enforce it and what will be the impact on London as an international financial centre?

--- Later in debate ---

[Mr Pickles]

Because we count them.

[Hilary Benn]

That really takes the biscuit—trying to allege that somehow the Government are counting properly. The fact is that before the last election, the Prime Minister said that it is

“a disgrace that in the fifth biggest economy in the world…we have people homeless, people sleeping on the streets”.

I agree with him. It is a disgrace and people should hold him to account for his shocking record.

We shall deal with the housing crisis only if we have a comprehensive plan. We have one—the most comprehensive in a generation—in the form of the Lyons review, which we will implement from day one of a Labour Government. We will make housing a national priority for capital investment. We will work with housing associations and councils to make it easier to build council houses, building on the changes we made to the housing revenue account.

We need more firms to be building. Thirty to 40 years ago, two thirds of the homes in this country were built by small and medium-sized builders; that proportion is now less than a third. Ask small builders what the problem is and they say, “I can’t get access to land and I can’t get access to finance.” We will introduce a help to build scheme, which will allow small and medium-sized builders to get lower-cost bank lending, supported by Treasury guarantees. We will encourage local authorities and others to make more innovative use of public sector land, investing in it as equity instead of selling it to the highest bidder, because that will also help us to deliver more affordable homes.

We will use Treasury guarantees and financial incentives to support the building of garden cities, and we will ensure that every council has a local plan. The Minister of State, the hon. Member for Great Yarmouth (Brandon Lewis), said that it is not necessary for every council to have a plan, but I think it is the responsibility of every local authority in England to have a local plan. Why would someone seek to be elected to an authority, or to be its leader, if they were not going to draw up a plan for the future of their community that included how they will meet the housing needs of the people who elected them?