UK Economy

Seema Kennedy Excerpts

Wednesday 29th June 2016 Commons Chamber

[Stewart Hosie]

No, I am not going to give way.

We do know, though, that many of the underlying problems are deep rooted and long term. One of the arguments posited by the out campaign was that money currently going to the EU could be spent here at home. We do not need to leave the EU to reverse the decision to convert innovation funding from grants to loans in order to support new product development. We do not need to leave the EU to reverse the cuts to export support in order to help businesses sell more overseas. We do not need to leave the EU to abandon an economic plan to cut £40 billion more than is necessary to run a balanced current account. We do not need to end our membership of the EU to do these things; we do need an end to austerity.

The other argument that the Brexit campaigners posited was that we need to “take back control”, in their words, in order to achieve improvements in all the economic metrics. The problem with that is that countries within the EU are doing better on every single measure. Malta and the Czech Republic have lower unemployment. Denmark, Sweden and the Netherlands have higher employment. Ireland has higher GDP growth. Estonia and Bulgaria have lower debt-to-GDP ratios. In terms of the key issue of productivity—

[Seema Kennedy (South Ribble) (Con)]

Will the hon. Gentleman give way?

[Stewart Hosie]

No, I am coming to an end.

Productivity, as against the UK, is higher in the entire euro area. It is higher in Austria, Sweden, Denmark, Germany, France, the Netherlands, and Ireland. All the things that we want to see done can be done within the EU: that is self-evidently the case.

This is a Brexit campaign without a plan, leading to the chaos we are seeing now and potential difficulties in the economy for many, many years to come. Of course we need to get on, one way or another, to resolve this, fix it, and work with the hand we have been dealt. However, if we are expected to respect the decision taken across the whole of the UK, we would expect the same respect for the decision taken by the people of Scotland to stay in the EU.

Oral Answers to Questions

Seema Kennedy Excerpts

Tuesday 7th June 2016 Commons Chamber

[Stuart Andrew (Pudsey) (Con)]

2. What progress he has made on the establishment of the northern powerhouse.

[Seema Kennedy (South Ribble) (Con)]

10. What progress he has made on the establishment of the northern powerhouse.

[The First Secretary of State and Chancellor of the Exchequer (Mr George Osborne)]

May I say that as a young Back Bencher I went to Pristina to help with the democracy-building programme in Kosovo? It is good to have the Speaker of that Parliament here.

Two years ago, we set out the plan to build a northern powerhouse by connecting up the cities and counties of the north of England so that the whole is greater than the parts. Since then we have committed billions in new transport investment, devolved powers to cities and promoted science and culture. The result is that investment projects in the north are up by more than 100%. But we have just started on this bold journey, and it is only by working together that we will transform the economic geography of this country.

[Mr Osborne]

I agree with my hon. Friend, and congratulate him and other west Yorkshire MPs who spoke out powerfully on the need for further investment in flood defences in west Yorkshire and in Leeds. We have provided that, with around £350 million extra in flood defence investment over the coming years to protect the businesses and communities he represents. Our neighbourhood planning Bill will ensure that we have a national infrastructure commission on a statutory footing to look at the big national challenges that we face, whether transport investment, broadband or indeed flood defence.

[Seema Kennedy]

I thank my right hon. Friend for his answer. What benefits are there for infrastructure funding for the region outside the large cities?

[Mr Osborne]

My hon. Friend raises an important issue. In recent years there has been a focus on economic development in the big cities of the north, but we now want to support the counties and county towns of the north of England. In the area that she represents so well we have the new growth deal for the Preston, South Ribble and Lancashire city deal area. We are looking to devolve more economic powers to counties so that they too can see the benefits of securing economic growth. My door is always open to good, sensible proposals for investment in the counties of the north of England.

Budget Resolutions and Economic Situation

Seema Kennedy Excerpts

Tuesday 22nd March 2016 Commons Chamber

[Richard Fuller (Bedford) (Con)]

Parents in Bedford and Kempston will have wanted a Budget that said, “Yes, we are going to make sure you get a good job. Yes, we are going to make sure you get a decent amount of pay, whatever job you do. Yes, we will make sure you can keep as much of your taxes as possible. And, yes, we will deliver a Budget that will make sure that your children have a better future than you do.” The Chancellor, in his robust performance today, has demonstrated that this Budget can deliver on all those items.

I was shocked to hear the response from the shadow Chancellor, as he seemed to spend 20 minutes of his speech trying to hold the Chancellor to account for something that the Chancellor is not doing. That shows part of the Labour party’s problem: there is no coherence in its approach to this Government. I would therefore like to provide a bit of coherence in my criticism of one aspect of this Budget—the sugar tax. I do so because it is not what it says it is, it will not raise the taxes ascribed to it and it will not achieve the health benefits that were its original vaunted purpose.

It is clear that this is not actually a sugar tax. There will be no tax on sugar in cakes, puddings or confectionary. That might be great for food manufacturers, restaurant owners and chefs, but it is not actually a tax on sugar. It is not even a tax on soft drinks, because sugars in milk-based drinks or fruit juices are not covered either. In fact, it appears to be a tax not on sugar, but on five companies: Coca-Cola, Britvic, AG Barr, Nichols Vimto and Lucozade Ribena Suntory. The Government ought to be careful about having very specific taxes targeted on very specific companies, because they will be open to challenge at the Commission or in the courts.

[Seema Kennedy (South Ribble) (Con)]

My right hon. Friend the Chancellor made it very clear in the Budget that one of the objectives of the so-called sugar tax was to get companies to change their behaviour by making low-sugar drinks rather than full-sugar drinks. I used to drink a lot of full-sugar Vimto, but I now drink no-added-sugar Vimto. Does my hon. Friend accept that that is also one of the aims of the tax?

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[Seema Kennedy (South Ribble) (Con)]

Since 2008, all developed economies have struggled with low confidence, lack of investment and sluggish growth. How each finance Ministry has responded to that challenge is quite clear from the growth and unemployment rates of our competitor economies.

The long-term economic plan is not just a slogan; it is a plan that we can be proud of. Since 2010 it has delivered for our constituents record levels of employment, stable interest rates and low inflation. Those are not just dry, dusty economic terms. They mean that in our constituencies, people have jobs; that we are not seeing mass house repossessions like we did in previous recessions; and that savings have kept their value. We have only to look at countries that are almost on our doorstep, such as Greece, to see that mass unemployment has massive social consequences when Governments lose control of their economies.

Our economy still faces great challenges. My hon. Friend the Member for Richmond (Yorks) (Rishi Sunak) talked about access to finance and investment, and I want to touch on those measures briefly. Many colleagues have quite rightly pointed out that cutting taxes leaves businesses with spare cash to invest. That leads to more recruitment and more tax take; it is a virtuous circle. I very much welcome the cut in corporation tax, and I disagree with the hon. Member for East Lothian (George Kerevan) who said we do not need to cut it any further because it is already low enough.

I welcome the 10% rate on long-term investment in small cap companies. We need to do more to foster a culture of long-term investment, and the Budget goes some way to addressing that. Access to finance is still a barrier for some businesses. I was glad to see that the British Business Bank will carry on supporting SMEs through the Help to Grow programme from this spring, supporting at least £200 million of lending, and that the enterprise finance guarantee programme will be extended until 2018.

I have long been troubled not only by the brakes on investment but by the barriers to entry that prevent entrepreneurs from starting up in the first place. Business rates are one such barrier, because they are a fixed cost paid by businesses before they even start up. When I have spoken to small businesses in my constituency, they have welcomed the extension of small business rate relief. I also welcome the discussion paper on the revaluation of properties for business rates, because the three-year cycle will fit in a lot better with standard rent reviews.

I welcome most the changes in stamp duty land tax for commercial properties. Again, this tax is a barrier to businesses opening or expanding. In my previous life as a commercial property solicitor, I saw small businesses unable to open or grow because of the stamp duty land tax, or they adopted avoidance behaviours, which did not help anybody.

I want to speak briefly about investment infrastructure in the north, which I feel passionate about. We need more investment, particularly in east-west connections. I respectfully ask Treasury Ministers if there could be some money in the next Budget for the Ribble bridge.

The aim to have £1 trillion of exports by 2020 will boost our economy, and the investment in UK Trade & Investment is most welcome. Yesterday was the festival of Nowruz, when Iranians celebrate their new year. I very much welcome the fact that my right hon. Friends the Chancellor and the Business Secretary will visit Iran in May, and I wish them the best of luck.

The record shows that this Government’s long-term economic plan is working in the face of a difficult global economy. This Budget focuses on investment, and I shall be happy to support it tonight.

[Several hon. Members rose—]

Small Businesses: Tax Reporting

Seema Kennedy Excerpts

Monday 25th January 2016 Westminster Hall

[Seema Kennedy (South Ribble) (Con)]

It is a pleasure to serve under your chairmanship, Mr Davies, and to follow the hon. Member for East Lothian (George Kerevan)—I made my maiden speech after he made his. I thank my hon. Friend the Member for Hertsmere (Oliver Dowden) for raising this important issue. I have had representations about it from many constituents. As somebody who has run a small business, I am happy to take part in the debate. I draw Members’ attention to my entry in the Register of Members’ Financial Interests.

The “Fixing the foundations” report by my right hon. Friends the Chancellor and the Business Secretary, which came out last July, focused on creating an even more competitive tax system. The aim is to cut corporation tax to make sure that we have the lowest rate in the G20 and attract inward investment, as well as to make paying tax simpler. The aim is that that

“will dramatically cut the cost of paying tax for business.”

As we all know, a record number of people—millions more of our constituents—are now self-employed and running small businesses. It is a generational shift, and this growing phenomenon will have an impact on many of our constituents.

As other hon. Members have said, the direction of travel—going digital—is laudable, and if the proposed system is properly implemented, it will increase the tax take, which is of course to be applauded. However, the stated aim is simplification, not only for the Revenue but for business, so I tentatively suggest that the Minister does not rush to make any changes. It is better that the switch takes places slightly later, but with fewer glitches. That would increase buy-in from the business community and reduce the frustration for constituents who are involved in making these quarterly reports—however we want to describe them. There are few more frustrating activities for small businesses, particularly sole traders without admin support, than being kept hanging on HMRC’s helpline.

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

The hon. Lady’s point reminds me of a comment made by Richard Morse, the FSB’s representative in my area, who said that HMRC did not seem to realise that a lot of businesses in my constituency were sole traders and that the person doing the accounts—there is no separate accounts department—was also generating the business and doing the work. He fears that the proposed system will eat into profits and lead to less taxable income, and I hope the consultation can address his fears.

[Seema Kennedy]

The FSB has made submissions, and it will carry on doing so. Ministers will also be listening to all our representations, which is why it is important that we are here to speak on behalf of our constituents. I welcome HMRC’s commitment to make more use of digital help, such as webinars, webchat and YouTube videos, and I hope it will increase the use of those.

I am sure that the consultation went through this, but I have concerns about when tax would be payable and when penalties would be incurred. I understand that three months does not seem like a very long time, but a four-week or six-week penalty period could pass quickly for a sole trader in busy periods, such as the summer if they are involved in seasonal business. Will the Minister address that point?

My hon. Friend the Member for Morecambe and Lunesdale (David Morris) referred to test runs. Perhaps I missed this information, but I would like to know exactly who did those test runs and over what period. It is essential that the tests are done over an extensive period, with different sizes of business, so that glitches are eliminated and the system runs really well when it is in place.

I have a particular concern about adjustments for capital allowances. I am thinking particularly of my own business, which is in the building trade, as we have had to make large capital investments in the following year, and there are also issues such as amortisation. I know that the impact on working capital came up in the digital consultation carried out by the Petitions Committee.

In conclusion, the move to digital taxation is the right direction of travel if we are to meet business challenges of the 21st century, but it needs to be done after a thorough consultation, of which this debate is only one part, even if that means the current timescales are missed by a few months.

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[Sammy Wilson (East Antrim) (DUP)]

Unlike some hon. Members who have spoken, I have difficulties with the concept of digitising tax returns. I have some experience from when Northern Ireland introduced digitisation and a need for internet access for planning applications and a whole range of civil service functions. Anyone who looks at the Government’s record, regardless of which Department is involved, will see that none of this ever goes smoothly and that the initial costs never turn out to be as low as predicted. The process of moving towards the objective is never smooth and, inevitably, many of those affected find it hugely frustrating. Sometimes the ironing-out period is short, but it can often last for a long time.

As hon. Members have pointed out, the issue of tax returns is not just a cause of frustration as, in some instances, it can be a matter of whether a business survives. Although the Minister has outlined some of the benefits and the reductions in administrative costs, we therefore have to ask ourselves whether we are sure that the transition period will not be so disruptive that it has an impact on many of the businesses in the United Kingdom that the Government are keen to expand.

One of the fastest-growing sectors of the economy in my constituency is people moving into self-employment—they are encouraged to do so. However, it would be detrimental to push those people into a situation in which it is difficult for them to do business because the Government have made it hard for them to carry out one of the most basic things—their tax transactions. The Government will undertake a consultation, and they have the 2020 deadline and so on, but we underestimate the trauma that some people might experience along the way because these things never work out easily.

I have read through the missive that the Minister has sent us all to sell this wonderful idea and, like others, I am still not clear what the Government are trying to achieve. The document cites headline figures, and says that the change will cut administrative costs and make things easier, and that people

“will be required to keep track of their tax affairs digitally”—

that is the kind of language that is used. It says that people will not have to

“wait until the end of the year, or even longer, before knowing where they stand with their taxes”

and that

“updates will be generated from existing digital business records”.

As some Members have asked, what does that actually mean for a business? Will a business know exactly how much tax it is due to pay every quarter? Will it pay that tax every quarter? Will the digitised records simply be a reflection of the information that is already gathered? Will they need to reflect the information that would be required at the end of the year? If so, that is radically different from simply saying, “Give us a lot of data about your business.”

There is significant work involved in getting some end-of-year records that businesses submit in their annual tax return. Those records might cover stock taking, work in progress, accruals, bad debts and one-off payments. Will all those things be required for every quarterly return? Is that what is meant by

“updates will be generated from existing digital business records”?

If that is the case, there is absolutely no way that the Government can argue that generating the accounts will not involve substantial extra work for businesses. If there is a quarterly requirement to pay tax, will businesses find themselves overpaying tax at the beginning of the year and then having to get a rebate at the end if end-of-year adjustments have reduced the tax burden? What does that do to a business’s cash flow? What do the Government intend?

Once the records go in, presumably the data will be looked at. If that is the case, will queries be raised, or will the data simply be ignored? If we are going to ignore the data, why provide them? If we are not going to ignore the data, will there be queries from HMRC not at the end of the year, when one tax return would have gone in, but on a quarterly basis? That would, of course, create additional work for businesses. The change will play an important part in how businesses generate the information. If it is simply a case of passing on digitally-generated information, will the process involve more or less information than a business would usually gather during the year?

[Seema Kennedy]

Does the hon. Gentleman agree that the transition will be complicated for businesses that are paid in cash and with cheques, as well as online? I am thinking of a self-employed hairdresser, for example.

[Sammy Wilson]

That is exactly the kind of question that any reasonable business would want answered when deciding whether the change is good or bad. It is easy to hide everything behind a term such as “quarterly, digitally-gathered business records” but the detail, as the hon. Lady says, is significant for businesses.

If the information is to be looked at in detail, that will affect how businesses go about collecting and verifying it. Most businesses do not want to make mistakes. They are not all treated—unfortunately, Minister—like the Googles of this world. Many businesses fear HMRC—they fear the taxman. They are afraid of making a mistake and of that being interpreted as them somehow trying to pull the wool over people’s eyes. Inevitably, instead of one visit to the accountant or auditor, there will be three or four visits. I do not think that this is just speculation, because one only has to look at what happened when VAT filing started. That was sold on the same kind of basis, because we were told, “You just fill in all the stuff,” but that was not what happened. People started going to accountants to get them to verify that they were sending in the proper information.

Will more queries be raised with businesses and will more time be tied up dealing with those queries? As businesses see the quarterly returns as something of great significance that have an impact on the tax they pay and how that might be scrutinised, will they face more compliance costs due to their asking professionals to do their returns? Alternatively, as some Members have described it, is it simply that they will have all the information on one spreadsheet, and that they can click a button to send it to HMRC, with that being the end of it? I doubt very much that that is how businesses will regard this, and HMRC has already accepted that there will be set-up and hardware costs.

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[Seema Kennedy]

I understand the point that the hon. Gentleman is making, but although there might be an error in the input of records, surely if everything is done electronically, there will be fewer calculation errors at least, or so one would hope.

[Rob Marris]

I agree with the hon. Lady that that is the theory, but the fact is that input errors are likely to increase in number if more information is being inputted—not necessarily, but likely. She is absolutely right that that is the point at which errors, if there are any, will creep in—garbage in, garbage out, as the saying goes.

Another practicality mentioned today relates to remote areas. I hope that the Minister will say something about that, because I have seen some suggestion that things could be done on a smartphone. I am no techie, but the only ways in which I can see that being possible are on a phablet with a screen of about 7 inches in size, and there are not many of those around, or by people using their smartphone as a modem and submitting information over the mobile telephone network, rather than broadband cables. However, many remote areas do not have 4G, so in theory someone could be dumping the information through the smartphone, which is being used as a tether modem, although that seems unlikely because the speed will not be that great, so there is a problem.

Nevertheless, I support the general idea of getting stuff online to achieve greater efficiencies. We have to be careful about those who are unable to cope with the online stuff, for reasons of disability and so on, but contrary to what some Members have been saying, the Government—whether now, or in four years’ time when we in the Labour party are in government—must be careful about going along with everyone who will not engage online. Some people will not engage online even when they can, although it would be more efficient for them to do so and it is more expensive for the rest of us that they do not.

The way business is going—not every business, but an awful lot of them—if a small business does not engage online, the likelihood of it being successful decreases year by year, because of the digitalisation of the world. If an HMRC initiative encourages some small businesses to have more digitalisation than they would have done had the system not come in, that could be a good thing not only for them and how they run their businesses, but for how they interact with HMRC.

The hon. Member for South Ribble (Seema Kennedy) mentioned a hairdresser. A peripatetic hairdresser, for example, with his or her own car does not necessarily have to be online to run a successful hairdressing business. The way the world is going, however, that lack of a digital presence is likely to tell us against the hairdresser. Some hairdressers will now have an automated system to send a text message to tell the client, “Don’t forget, I’m coming round to give you a wash and shampoo tomorrow afternoon at 2.30.” That is fairly basic stuff, but it is using the digital to enhance business with fewer missed appointments and so on. That is how the world is going, so a nudge—to use one of the Government’s favourite words—from HMRC is not at all a bad thing, although we have to be sensitive about those who are unable to get online, for whatever reason, whether in terms of disability or their geographic presence, such as in a remote area.

We have all had our sob stories about running a small business. Years ago, I helped to run a small family business with a few employees, and later I worked for a large and successful firm with 1,000 employees. Before I first came to this place, I spent most of my working life in the private sector. The nudge then was to get computerised. In 1995, although I am not a techie, I was the first partner in my law firm to have a computer on my desk, because I kept saying, “The world’s getting more and more digital.” Now, 20 years later, except perhaps for reasons of disability, no lawyer in the land can be found without a computer on their desk. Any lawyer who did not have one 10 years ago probably went bust, because otherwise the job could not be done. Sometimes, we have to nudge things, and I nudged my partners on that.

Nevertheless, I suggest to the Government that any such nudge must be accompanied by simplification, as most recently referred to by the hon. Member for Livingston (Hannah Bardell). The Federation of Small Businesses states that, while it is “fully supportive” of HMRC’s “digital transformation”, it believes that that should be made “in parallel” with the simplification of tax policy. That is very important.

The Government, in their formal response to the petition, stated:

“Many taxpayers have told HMRC that they want more certainty over their tax bill”.

I can see that, although I am not sure that quarterly reporting will do it, because what bedevils business, small businesses in particular, is the complexity of the tax system.

The Minister and I have been talking about this on and off for about 10 years, so I appreciate that simplification is the holy grail. When the Chancellor was a shadow Treasury Minister, he used to bemoan the fact that under a Labour Government “Tolley’s Tax Guide” had gone up to 1,000 pages—but it is now in round terms 1,500 pages. As I have said before, however, I do not blame the Government or their predecessor coalition Government for that. Tax affairs are complex, because we have a lot of smart people in this country, who are innovative in financial services, and they find loopholes. Then the Government have to write a whole bunch of legislation to plug those loopholes, but that only keeps putting sticking plaster on sticking plaster.

For all the commendable efforts of John Whiting and the Office of Tax Simplification, the Government—true under Labour as well—have not engaged fully in tax simplification; it would be rough and ready and there would be less discretion and more apparent injustices, but there would be much more certainty, which the Government recognise all taxpayers, particularly small businesses, want.

The hon. Member for East Antrim referred to problems with computerisation. They are legion and there have been problems with the ancient online self-service system. Something that happened under the previous Labour Government and, incredibly, was made worse by the coalition Government was the single farm payment scheme for farmers. It was a disgrace under a Labour Government and that disgrace got worse under the coalition Government. Farmers were supposed to file their claims online for the single farm payment—its name has changed now, which is what all Governments do when they get into difficulties—in a so-called simplified system. What happened? The system collapsed for those who could not get into it. Farmers, because of the nature of their business—I think the hon. Member for High Peak (Andrew Bingham) referred to this—often live in remote places. They, too, might not even be able to use a phone as a tether modem because they do not have 4G.

The Opposition’s plea to the Minister is not to put the cart before the horse. The Government should get the system up and running before they start cutting back on the available assistance. I am not going into all the problems at HMRC, but they are legion, known about and much discussed. The Government are taking them on board and there has been a little improvement in recent months. That is long overdue, but it is good. The Minister should keep it up.

It is no secret that there are big problems in HMRC and the Government accept that, which is why HMRC is moving 3,000 more people to answer telephones and so on, but if the new system is not to involve quarterly tax returns—the Minister was commendably clear about that ex post facto, after hares started running and people started getting worried—there is a twofold problem. First—this was referred to by my hon. Friend the Member for Nottingham East—will quarterly updates be a precursor to quarterly tax returns and a kind of PAYE for the self-employed and small businesses? Secondly, will there be short-termism, which affects very large companies now and bedevils British manufacturing? Footsie companies have to make quarterly reports and so on to the stock exchange, but if this system comes in, it has the potential to drive SMEs towards short-termism, and generally there has been cross-party consensus that that has not been good for our economy. It might have been good for a few arbitrageurs and people like that, but it is not good overall.

To finish, I ask the Minister where he thinks we are going beyond quarterly updates, if at all. What the Government said in their response to the petition was either contradictory or a harbinger of where they want to take this:

“At the March 2015 Budget the government committed to transform the tax system by introducing simple, secure and personalised digital tax accounts, removing the need for annual tax returns.”

So that we are all clear, I will repeat that last bit again:

“removing the need for annual tax returns.”

If that is what the Government are talking about in secure and personalised digital tax accounts, is that what they have in mind for businesses—to remove the need for annual tax returns? That may be a coherent policy, but I am not aware that they have announced it and it would be the kind of very big change to which my hon. Friend the Member for Nottingham East referred. Will the Minister therefore say a little more about where he thinks the Government are, or are not, going with digitalisation?

Housing and Planning Bill (First sitting)

Seema Kennedy Excerpts

Tuesday 10th November 2015 Public Bill Committees

[Julian Smith (Skipton and Ripon) (Con)]

Likewise, I draw Members’ attention to my entry in the Register of Members’ Financial Interests.

[Seema Kennedy (South Ribble) (Con)]

I draw Members’ attention to my declaration in the Register of Members’ Financial Interests.

[Helen Hayes (Dulwich and West Norwood) (Lab)]

Chairman, I would like the Committee to note that I am a councillor in the London Borough of Southwark and that I employ a councillor in my parliamentary team.

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[Dr Blackman-Woods]

Q 14 Nevertheless there is not a requirement to do that. Would it be more helpful if there was a requirement that the houses are replaced in the same area that they are sold from?

Richard Blakeway: There are a number of statements relating to reprovision which are very clear about that being done within the local area. We have an established role for the Greater London Authority as well as the London Government more widely around housing provision. The Localism Act gave the Mayor of London the same functions as the Homes and Communities Agency. We would expect the reprovision to be done within the capital. Government have been very clear that that is their intention and their aspiration. The issue is whether we are doing one for one replacement or whether we are seeking to exceed that, and we would like to see two for one replacement.

[Seema Kennedy]

Q 15 In relation to clauses 22 to 31 on rogue landlords, do you think the provisions in the Bill will raise the standard of property available in the rental sector in London?

Richard Blakeway: We very warmly welcome Government’s measures on tackling rogue—often criminal—landlords, not just the measures in the Bill but more widely. We very strongly welcome that. One of the key changes which we would like to see is for us to have access to the data which will be collected around bad landlords. One of those clauses pertains to that. We would like the GLA to have access to that because it would enable us to build on existing programmes which are seeking to improve the quality of the rented sector in the capital, not least the London rental standard. We have something like 140,000 private rented properties already managed under that standard and the higher expectations which that demands. So we think it will make a significant impact, we welcome the changes, but we would like access to the bad landlord database.

[Kevin Hollinrake]

Q 16 Mr Blakeway, one of the biggest challenges in providing more housing is delays in the planning system. There are a number of measures in the Bill, such as insisting on local plans by 2017, simplifying overall plans and more timely decisions in planning in principle. How do you think these will work out in terms of expediting the planning system?

Richard Blakeway: We welcome all the measures that are being introduced by the Government to try to accelerate or expedite the planning processes. As you know, since the GLA’s inception, we have had a long-established strategic planning role and in particular we are keen to build upon clause 101, which gives the Mayor greater authority to exercise those strategic planning powers. In addition, we would like to be able to play a role around permission in principle and issuing development orders, as well as the register of brownfield sites and our ability to co-ordinate that. As a basic principle, we would like to see the Mayor of London exercise the kind of functions that the Secretary of State envisages exercising in the rest of the country.

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[The Chair]

You do not all have to answer every question.

Sir Steve Bullock: —but she is right about the need for the boroughs to work together. That is something that we are very keen to do. To get to the heart of your point, I have to say that I am less confident than the Deputy Mayor about the impact of starter homes. We welcome them as another way of getting people on to the housing ladder in London, but we have two anxieties. One is that they might drive out other forms of affordable home ownership, rather than being additional. Secondly, they are time limited, by definition. One thing that I suspect we may come back to is the mix of units that we need to deliver in order to meet the housing needs that we have as individual boroughs.

Phil Glanville: I am a bit more pessimistic than some of my colleagues. I think we are going to squeeze out social housing and truly affordable housing in the planning system. We are already seeing a lot of challenges across London in terms of viability in planning schemes. Where we would have seen developments come forward with 30% or 40% affordable housing, it is falling to 10% or 20%. It is not an alternative to shared ownership as a truly affordable, low-cost housing option. Of people in Hackney that are registered on the Share to Buy website, nearly 3,000 of those that have registered for an affordable housing purchase product earn less than £40,000. If we are talking about an accessible product, a product that has a cap of £450,000 in inner London is simply not affordable. That would bring the cost down to around £420,000. That is not accessible for those who aspire to home ownership but are earning less than £40,000. If we want to have a creative, vibrant inner London, where people of different communities can afford to live and buy—we aspire to let people buy—then we need a range of products. Starter homes are not a replacement for shared ownership.

[Seema Kennedy]

Q 28 Councillor Tett, what is the LGA’s view on the Bill’s provisions on brownfield sites? Will the power for local authorities to compile registers of brownfield land help to protect the green belt, particularly in places such as Buckinghamshire? I know that your view is of the whole LGA.

Martin Tett: Yes, I have to be very clear that I am representing all of the LGA here, not my particular area. We are very supportive of the idea of building on brownfield first, rather than going into open countryside or particularly into the green belt; we support the Government’s policy on that. The issue we have is the actual process for identifying brownfield sites. We need to be very clear about what they are and how they are defined, as well as the additional burden placed upon local authorities to compile and maintain those registers in, frankly, very financially stretched times, when, particularly in planning departments, it is quite difficult to attract and retain experienced staff. We need to ensure that, if this becomes an additional burden for local authorities, it is fully funded by the Government. As a concept it is a very good idea; we just have concerns about the financial implications and the practicality of it.

[Seema Kennedy]

Q 29 So as a concept you think it is a good idea. Do you also think that it helps communities to have ownership of these things, because there will be something very visible for them to see and feed into?

Martin Tett: I think you have asked a slightly different question. Brownfield sites—previously developed sites—are normally more acceptable to local communities. In terms of the development hierarchy, it is nearly always the area that local communities would support first, rather than going into greenfield or green belt sites.

As for local communities, that is a different issue to do with the infrastructure surrounding them and that is where people look. I go back to my previous observation about ensuring, for example, that any development does not lead to undue pressure in terms of road congestion, pressure at junctions, doctors’ surgeries and so on. That is a separate issue that goes back to section 106 and CIL obligations, which most local authorities look to housing developers to provide.

[Helen Hayes]

Q 30 From your understanding from your respective boroughs and work undertaken across the LGA, do you believe the sale of higher-value council homes can cover the costs of both the right-to-buy scheme and the levels of replacement of both the housing association homes lost to the rental sector and the loss of those council homes? Is that a realistic scenario?

Sir Steve Bullock: The difficulty in giving you a definitive answer to that is that it depends on how you implement the scheme. The definition of high value will be crucial to this. The initial work done on this, certainly from the London perspective, does indicate that there would be an outflow of funds from London to the rest of the country, which we are deeply concerned about. We are clear that we would need to know more before we could give you a hard and fast answer on this.

Philippa Roe: I completely agree with what Steve has said, and I would certainly endorse what Rick Blakeway said about trying to keep as much money as possible within London, where the greatest housing crisis is, so it seems sensible to keep the money there.

One thing that has been mooted is that, instead of the money being put in a pot for literally every high-value council house sold, the boroughs should be given a fund—a sum of money that they have to find, however—which is then supposed to be driven by the council house sales. One concern we have in Westminster about that is that obviously we have some very high-value properties, but our churn rate is very low. Up until very recently we gave tenancies for life and they could even be inherited. A sub-market-value rental property in central London is an extremely valuable asset. People do not give them up easily, so our churn rate is incredibly low. I would call for recognition of that if any targets are set, particularly for central London boroughs. I do not think ours is the only one to face that issue.

Martin Tett: Taking a wider perspective than just London, one of the ambiguities I mentioned earlier, as my colleagues have said, is about the definition of high value. How would you define that in different parts of the country? High value in London may be different from high value in Buckinghamshire, which may be different from high value in Doncaster or Teesside. There is ambiguity at the moment on that. In addition, what is the definition of a vacant property? If you have a tenancy exchange, is that property vacant or an occupied property in transition?

So we need to work through some of those ambiguities and negotiate with the Government. The other issue we have is how the model actually works. How do you predict for a particular year how much money is required for the RSL discount, which means you know effectively how much you have to charge to local authorities as a levy? That in turn dictates how much they have to sell. We are not clear yet on the details of how that will operate. Again, we are happy to negotiate that with the Government.

Phil Glanville: We need to see some clear exemptions around the value of new properties that are being built. Councils such as Hackney and Islington, Camden and Southwark have ambitions to build new affordable housing on their own land in London in order to meet that housing need. If that is taken into account when they become void, building any new home in the centre of London is likely to see those homes included within any cap or formula. Although there could be flexibility on exempting them, if their value is still included in the formula, the effect is the same: you would have to sell more of your existing stock.

It is worth saying when we are talking about high-value properties in London that Hackney is still the 11th most deprived borough in the country and the wards on the City fringe are some of the most deprived in Hackney. On Rightmove today I saw properties there that are worth £450,000. That is for a two-bedroom flat in a block that was built in the 1930s and ’40s; it is not a street property in Kensington, Islington or Stoke Newington. That is the effect that the overheated London market is having on our council stock. These are still very humble family properties on council estates in London; that is not the definition of places where poorer people should not live, which is what I think was the genesis of the policy in the Policy Exchange report.

--- Later in debate ---

[Grahame M. Morris (Easington) (Lab)]

Q 73 I want to go back to starter homes and the issues that you have touched on. A survey found that 6 million people— 5.84 million, in fact—earn less than the living wage. That is not a TUC figure; it is from KPMG. Some 23% of the labour force earn less than the living wage, and the numbers are going up. There are 750,000 people on zero-hours contracts. What is there in the Bill to address the housing needs of that substantial sector of people who we refer to as the working poor?

David Orr: There is little in the Bill that addresses that group specifically. The only real new housing or tenure product that it contains is the starter home initiative. As a component of a much wider, mixed-tenure, mixed-priced series of developments, starter homes have a role to play, but a comprehensive transfer away from social rent or shared ownership towards starter homes would be a mistake. They have a role to play as part of a broad pattern of provision, but not instead of the other things we are doing.

[Seema Kennedy]

Q 74 Mr Orr, I want to ask you about affordable housing in rural areas, and the portable discount in particular. Will you expand on that? How do you think it will affect the affordability of housing in rural areas?

David Orr: In the voluntary deal, we have agreed with the Government that in small, rural areas, in most cases, housing associations will almost certainly say no to a request to sell a home that a tenant is currently occupying, but they will have the opportunity to use the portable discount, which I hope will help to stimulate the development of new supply.

The fundamental challenge in rural England is that we need to build more homes, especially ones that are affordable for young families. Rural England is being hollowed out. As the 25-45 population grows in the country at large, it is declining in rural areas, because people cannot afford to live in villages that are often becoming like theme park villages, and that are in danger of becoming mausoleums. How we invest in new supply to keep rural England dynamic is a huge strategic challenge. The portable discount might create some of the financing that will allow that to happen, but we need to take a broad view and say it is time we addressed what is a genuine crisis in rural England.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

Q 75 What is your estimate of the net impact of the Bill on London?

David Orr: I do not have a detailed estimate.

European Union (Finance) Bill

Seema Kennedy Excerpts

Thursday 11th June 2015 Commons Chamber

[Seema Kennedy (South Ribble) (Con)]

I congratulate the hon. Member for East Lothian (George Kerevan) and my hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat) on their excellent maiden speeches today.

The greatest prize I won on 8 May was the right to serve. I will do my utmost to repay the trust that the people of South Ribble have put in me. As the first Member of this place of Iranian heritage, I feel a particular weight of responsibility on my shoulders. I have a voice in the mother of Parliaments when there are mothers in Iran who have no voice at all, and I have that voice because of the support given to me by my volunteers, my activists and my friends and family.

My father came to Lancashire in the 1960s to study textiles. He met my mother, who is from an Irish family. I grew up in Iran, but we had to leave because of the revolution. I spent the rest of my childhood in the constituency of my hon. Friend the Member for Ribble Valley (Mr Evans), which is adjacent to my own. So I am Irish and I am Iranian; my children have the blood of England, of Wales and of Guernsey flowing through their veins; but above all, and particularly in this place, I am a proud Briton. We meet at a time when we are debating historic choices that will be put to our nation and will influence our role in the world for generations.

Some hon. Members have asked me, “Where is South Ribble?” They assume, because the river rises in Yorkshire, that it is in Yorkshire, but no: it is in the red rose county—the one that won the wars of the roses, God’s own county. I find myself saying that standing between two Yorkshire MPs—[Laughter.] The world has flocked to South Ribble over the centuries. We have a long history of trade and of traffic, including Viking invasions in the 9th century and Irish migration in the 19th, and today we benefit from the hard work of thousands of eastern Europeans who work in our fields. South Ribble has always exported—cars, buses and trucks from the world-famous Leyland Motors, fine salads from Huntapac, and delicious frozen pizzas from Dr. Oetker.

My constituents are open to the world and optimistic for the future, but they want a Europe that works for them, for their families and for our nation. Like many of my constituents, I have never had my say on our role in Europe, and I am delighted that the Conservative victory has meant that we are able to deliver that choice for the British people.

I pay tribute to my predecessor, Lorraine Fullbrook. Lorraine was unrelenting in her work to protect and preserve the countryside and village nature of our constituency. She successfully led the fight against wind farms and was tireless in her commitment to protecting our area from flooding. She was an assiduous member of the Select Committee on Home Affairs, reporting on matters such as female genital mutilation, immigration and counter-terrorism. Her no-nonsense manner and her sense of humour will be greatly missed both in this place and in the constituency. I wish her the very best in the next chapter of her life.

I also pay tribute to the first Member for South Ribble, the right hon. Sir Robert Atkins, who served with distinction in this House and later for many years in the European Parliament. His family’s tradition of service continues with the recent election of my hon. Friend the Member for Louth and Horncastle (Victoria Atkins).

The tradition in a maiden speech is to take Members on a metaphorical open-top bus tour of one’s constituency, so, hon. Friends, jump on board a Leyland-made bus and hold on tight. Those of you who have been in my passenger seat, please be assured that I am not driving today.

Leyland is prospering as a result of the grit and resilience of its people and strong local leadership. Lancashire’s city deal is one of the largest, and it promises to bring further prosperity to the area through infrastructure investment. That will lead to thousands more homes and jobs being created. The initial investment is already in place and has contributed to the renaissance of the town as a hub for distribution and manufacturing. Companies such as Dr. Oetker and Waitrose are choosing to site operations there, and I hope that many more will join them. The forward thinking of South Ribble Borough Council, under the leadership of Councillor Margaret Smith, has meant that over the past five years more jobs were created in South Ribble than in Liverpool and Manchester combined.

Our bus now enters the rolling hills of Mawdesley and Eccleston. Eccleston is home to the first British winner of the Tour de France, Bradley Wiggins. His success in the Olympics is marked with a golden post box, and the villagers justifiably share his pride in this achievement, but for me the site is memorable because it is where I first reversed into a constituent in my car.

The River Ribble shapes the rest of my constituency. The beautiful, rich black soils of the floodplain grow some of the finest salads, tomatoes and brassicas in the country. The industry employs thousands in the villages of Banks, Hesketh Bank and Tarleton, as well as undertaking cutting-edge research. Those people are contributing to our nation’s food security, but they can continue to do so only with the right infrastructure. I welcome my right hon. Friend the Chancellor’s plans for the northern powerhouse and will do all I can to ensure that it extends up the M6 and into Lancashire so that my constituents can benefit from that great devolution. I will do all I can to ensure that the Green Lane link is built to improve conditions for growers and reduce congestion on village roads.

We now arrive at the northernmost part of the constituency, the town of Penwortham, the site of the final bridge over the Ribble. Hon. Members can now alight from the bus and stretch their legs—no doubt nervous that I might have taken control of the wheel at some point without them knowing. If the promise of the city deal is to be realised, we need another bridge over the Ribble. A new bridge would complete the ring road around Preston and, crucially, link the two parts of the Lancashire enterprise zone based at BAE Salmesbury and Warton. Those two sites employ thousands of people in the aerospace sectors, building the Hawk, the Typhoon and the F-35, so they are a vital part of our national security. They also have the potential to become hubs for advanced engineering and manufacturing.

The people of South Ribble play a vital role in bolstering our nation’s defences and contributing to our nation’s food security. As part of the northern powerhouse, they want to play their part in Britain’s future in the world. I thank them for the trust they have put in me, and I look forward to being their voice in this place.