Budget Resolutions and Economic Situation

Robert Neill Excerpts

Friday 20th March 2015 Commons Chamber

[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.

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[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.

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[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?

[Hilary Benn]

The hon. Gentleman should have listened to what I said. There is no cost. The principle is very simple, and I would have thought that it would command support right across the House. The advertising and marketing of properties should be done in the capital at the same time as it is done elsewhere, so that people in this country have the same opportunity to buy. I would have thought that he would support that policy.

[Robert Neill]

Will the right hon. Gentleman give way?

[Hilary Benn]

No, I will not. I have answered the hon. Gentleman’s question.

There is another policy that the Government—actually, the Conservative party—have said that they will put in place if they are re-elected, which is to sell homes at 20% off. To go back to the chairman of the Conservative party, he was recently asked several times on Sky News how exactly that would be funded. He was not able to reply, but others have said that it will be done by exempting such sites, first, from the requirement to build social housing, and secondly, from the zero-carbon homes standard. I would tell the Secretary of State that the consequence will be that other people have less of a chance of getting a home they can afford, and people who move into houses built to a lower energy standard will end up paying higher bills than they otherwise would.

I have another question for Ministers. In talking about that plan, the Prime Minister said the homes

“can’t be bought by foreigners”.

I would be grateful if the Minister who responds clarified what exactly the Prime Minister meant.

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[Hilary Benn]

The hon. Gentleman is, of course, referring to the consequences of a global recession. [Hon. Members: “Ah!”] Well, it was a global recession. The Secretary of State made specific promises about what the Government were going to do and they have comprehensively failed.

The Lyons review says to communities, “In return for taking responsibility for building the homes that you need, we will give you the powers that you need when you identify sites.” I have listened to debates in this House in which Members, particularly Government Members, have said, “We don’t understand it. We’ve identified sites, but the developers come along and say, ‘I don’t fancy building there. It’s not viable for me. I’m going to put in a planning application for that greenfield site over there.’” Up and down the country, that is happening. It is a great frustration for local authorities and citizens, because if they identify sites, the deal in return has to be that that is where the development will take place. If we are just dependent on the big house builders, we will never get to the figures that we need and it will undermine the public consent that, we all agree, is fundamental to making progress on house building.

We must say to local authorities, “Here’s a range of tools that you can use to ensure that the kind of homes you want get built in the places you have identified and go to the people who need them.” That is why the one other thing that we will do is to give local authorities a planning power to say that in housing growth areas a percentage of the new homes that are built for sale should, in the first instance, be reserved for local first-time buyers. If we do that, we will turn quite a few nimbys into yimbys, because they will realise that their son or daughter, or their neighbour’s son or daughter, will have the chance to get one of those houses.

If we are to get to the target that we have set of 200,000 homes a year by 2020—I say to Ministers that surely their experience over the past four years has taught them that we will not do it by trying to put a bit more petrol into the old house building engine and cranking it up—there has to be a fundamental change in the way the house building market works.

Let me turn to economic evolution and growth. I acknowledge what the Secretary of State has done with deals for some cities—it would be churlish not to—but there is an unanswered question: if he and the Government are so committed to devolution, why has progress been so slow, patchy and piecemeal? Manchester aside, why have such limited powers been offered to a small number of large cities. Why, as the Local Government Chronicle put it yesterday, has DCLG

“almost seemed peripheral, a bystander to the devolution debate”?

Why has Lord Kerslake, now free from the responsibilities of office, said—again in the Local Government Chronicle—that

“it was only well into its fourth year that the government woke up to the benefits of devolution”?

I suspect there is plenty more where that came from. Why has the right hon. Gentleman stepped aside while the Chancellor and Deputy Prime Minister have had a row about whether powers can be devolved and whether we need a metro mayor? Perhaps he is not actually in charge of the policy.

What about the great counties of England? Until the Chancellor got up on Wednesday and finally adopted Labour’s policy on 100% retention of business rate income growth, which he said he would apply to Cambridge and Greater Manchester, the counties of England had frankly been ignored. The Secretary of State will be only too well aware of how angry his colleagues in the counties have been at his failure to stand up for them. It was noticeable last year that at the meeting of the County Councils Network—the great annual gathering of county councils—not a single DCLG Commons Minister could manage to clear their diaries to turn up to address what was mainly their party colleagues.

It is not a very long journey to Marlow—about an hour in the ministerial car—and I think the real reason is what happened to the Secretary of State the previous year at the 2013 conference. LocalGov.co.uk reported it thus:

“Mr Pickles received a hostile reception at the conference…During questions, the Tory leader of Leicestershire, CC Nick Rushton, asked the secretary of state: ‘Why are you always so rude to us?—

I am sure the Secretary of State remembers that well—

“It’s about time you spoke up for us in Government.’”

I sympathise with the Secretary of State because with friends like that who needs us on the Opposition Benches? It is the unfairness that makes people angry. The truth is that his Conservative colleagues in the counties know that they will get a better deal from a Labour Government than they have got from the Tory Government, and the same is true for the city regions.

[Robert Neill]

In what ways does the right hon. Gentleman intend to alter the operation of the formula grant to address sparsity in rural areas? How will he deal with adult social care, which it seems his Government want to nationalise and which is one of the principal cost pressures on top-tier authorities such as councils? How will that help the county council?

[Hilary Benn]

I will come on to that very point in just a moment if the hon. Gentleman is willing to be patient. He will have seen what Councillors Keith Wakefield and Peter Box have said about the new Leeds city region deal. Peter Box described it as “disappointing”, which I would call one of the kinder comments. What has really got up the noses of the existing combined authorities is that Labour’s offer of 100% retention of business rate income growth has been made to Manchester and Cambridge but not to the other existing combined authorities. Why is that?

For all the Government’s rhetoric about the “northern powerhouse”—now running a close second to “long-term economic plan”—the truth is that the most deprived parts of the country have faced the biggest cuts in local authority funding. Yes, Labour will change the formula because what the Government have done is unjustifiable. There is nothing empowering about taking a load away and then giving a little less back.