Tuesday 11 July 2006
[Mrs. Joan Humble in the Chair]
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Michael Foster.]
I am very pleased to have secured this debate. As all hon. Members will appreciate from their constituency activities, community services, and particularly our local post offices and sub-post offices, are vital to our constituents’ interests and quality of life. That applies equally across town and country, and I say that because there is always a grave danger in such debates that people think that we are talking only about rural areas. We must emphasise, however, that community services are crucial not only to rural areas and constituencies such as mine, but to what might best be described as urban deprived areas, which may be found in large towns and their outlying areas, and parts of a town in my constituency could be described as urban deprived.
It is interesting that we have had a number of debates on community services and particularly on post offices. It is no surprise that they have been supported by Members on both sides of the House, because the evidence before our eyes in our own constituencies and the evidence from our postbags is that there is a gradual, unremitting erosion of local community services and a relentless anxiety about whether post offices, in particular, can keep going. There has also been a loosening of the localness of the provision of vital services. We can see that even from rather informal sources, but it is even clearer to those of us who live right in the heart of the communities that are affected in the middle of our constituencies. We see neighbours having to arrange more lifts to take people to various activities and more carers seeking time off work.
As Members of Parliament, we are sent to the House to represent people, their families and their communities above all others and we need to challenge the Government’s inevitable centralising nature—the Government always to seek to make decisions that apply across the board, and that is an inevitable tendency. Coupled with that are the economies of scale that are part of the natural order of business, which seeks at all times to maintain the lowest possible costs for the maximum amount of delivery to the maximum number of customers. That all works against what we might describe as localism. Coupled with that is the ease of transportation, with which we have lived for many decades and of which the most notable example is the car. That has given people access to services a long way from their homes.
There is therefore an increasing recognition that there is a degree of alienation and a dilution of the community to which people feel that they belong, as well as of their sense of identity and what defines them. That is by no means all bad, and it brings with it plenty of opportunities, because people want to enjoy participating in many wider areas of activity. However, there is also a real sense of loss and fear, and people worry that we shall miss the local community services when they are gone.
The problem is increasingly being recognised in a really determined manner by the number of petitions that have been brought together. That is true not least of the petition initiated by the National Federation of Sub-Postmasters, which I hope to find time to present on the Floor of the House on another occasion. The signatures have been gathered by the local community around the post office in Cuddington in the north of my constituency. The post office has served that community well for many years, but the postmaster is thinking of retirement, and there is a struggle to find someone to replace him. Of course, anybody considering doing so will say to themselves, “Is it really worth it? Is it worth the candle? Can I really make enough out of this business? Is there enough sustained income to keep the post office viable and going forward, even with a shop attached to it?” That is a serious issue.
I congratulate the hon. Gentleman on bringing this subject back before us. His point about someone trying to take over a sub-post office explains why it is crucial that the Government come clean about their agenda and where they see the future of the Post Office. The drift is almost worse than having no strategy, because people who decide to retire have no way of persuading the next person of what the business has to offer.
I am grateful for that intervention, which very much anticipates one of the themes that I shall seek to develop. There is no question but that confidence about the future is the key to whether we shall have any form of sustainable community services, not least ones that are centred on local post offices.
I hope that the Minister and the Government will take note of the petitions that have been gathered. Our concern today, however, is that it is just a pious hope that we can preserve in aspic some kind of a golden age and what we have always called our communities. Is there anything that we can do about the problem? Should we even urge the Government to try? I think that we must because, above all else, community services are the first line of protection for the most vulnerable—the very elderly, disabled people, those who are out of work and other benefit recipients.
If we look at the issue across the board, we see that today’s communities are characterised not only by the local post office. Of course, post offices are important because about 75 per cent. of them have a shop attached. There are community post offices not only in rural villages, but in suburban communities, such as John Winward’s post office in Over, in Winsford, which is in my constituency, and Helen Rimmer’s post office in Ashton Hayes. She has managed to hold on and to undertake new development, despite the most appalling provocation and repeated attacks on her, not least by gunmen. She has managed to come through all that and she still provides a vital service to her local community, for which she is much respected.
Communities are also characterised by the pub, which is also under pressure. The traditional local is being taken over by pubs with a theme, and there is a sense that it is perhaps best to attract people from afar who want to eat rather than to drink. We might keep the newsagents and the corner shops if those independent and family retailers—those whose are not part of the Post Office—can hold on in the face of pressure from the supermarkets. Recently, there has been a justified and important campaign to seek recognition of the fact that the traditional practice of demanding rents in advance is becoming deeply injurious to the survival of newsagents and corner shops, and we need to see whether that can be altered.
There is also the rising regulatory burden, which has been a theme for many years among those of us who are deeply concerned about the survival and competitiveness of those in the private sector and in business who must cope with it. The regulatory burden falls hardest on the smaller enterprises. There are also planning pressures, and somewhat draconian planning constraints are often imposed on small enterprises that wish to make small adjustments to increase their offering. Of course, there is the ever-present worry about street and shop crime, which hits small retailers particularly hard. They are often open all hours and they come under real pressure when they become the target of what is often more than petty crime, but they have no local support.
My hon. Friend has brought an important issue before us. He is talking about the fabric and structure of our communities, and particularly our high streets. He mentioned pubs, post offices and newsagents, but will he add pharmacies to that list because they are also under threat? The primary care trust on Canvey Island, for instance, is seeking to reorganise health care. There will be two large centres off the high street and they will be out of the way for vulnerable people, such as the elderly and the other groups that my hon. Friend mentioned, as well as for young families with prams who do not have two cars. Those health centres will have full pharmacies, which will provide a range of retail products, but they will destroy the eight community pharmacies that are run by small retailers and which give a wonderful service on Canvey Island. That is yet another threat to our high streets and community services.
My hon. Friend is entirely correct about pharmacies. I take an interest in that issue in another role, and there has been a campaign to preserve and maintain community pharmacies, which has my wholehearted support. Interestingly, in Farndon, a village in my constituency which is just on the River Dee with the Welsh border the other side, the post office has been combined with the pharmacy. That has been a useful and more profitable way of sustaining a vital set of services to our local community. My hon. Friend makes an entirely valid point; pharmacies are part of the list that I am just beginning to get through, so I am grateful to him.
In addition to pharmacies and the other services that I have mentioned, for some the church represents the essence of their community. As we know, there have been declining church attendances. I cite also primary schools, which are surviving, although in my area and many others there are falling school rolls. That puts terrible pressure on local education authorities to make decisions about whether schools can survive. There are also increasing pressures on bus services, which cater not only for rural areas but for the outlying areas of towns. Where such services are not being used, it is difficult to get a replacement to come in to take over. All of us recognise that we must go much further these days to fill up with petrol or diesel, and that there has been a decline of the small local petrol station. Such petrol stations used to provide an important community service.
We are also aware of the difficulty of maintaining in a viable way vibrant village halls, which are often associated with playing fields next door. That becomes a major source of concern when there is a decline in community activities. There has also been a decline in the number of butchers’ businesses in local communities. I suppose that that has largely been the cost of the higher requirements of inspection regimes. That decline is of grave concern, particularly for those who have been dependent on the rural economy over the years. I cite also mobile libraries and doctors in this context. Notwithstanding the diminution in out-of-hours services and the diminution in the number of NHS dentists in local communities, there has been a sharp fall in the number of district and specialist nurses in our communities. Sadly, that situation will become worse given the continuing financial constraints which arise through the Government’s financial mismanagement of the NHS budget.
There is also increasing pressure in our local communities given people’s lack of confidence in the fire service, with which the Minister has particular familiarity, the ambulance service and the police. That arises for different reasons but it all boils down to one issue: there is a feeling that unless someone is right in the middle of a large conurbation, most people’s community services do not know where they are. People are deeply concerned that when they need those services in an emergency, it will take longer for the service to get to them. There is not the same confidence that comes from a service being localised and placed in the local area where people feel that they have immediate access to it.
I am pleased that the Government, whether by design or accident, are now finding that their plan to merge the Cheshire police force into Merseyside’s seems to be going rapidly backwards, because it would have further exacerbated the lack of community support and direction. All of us are aware of the importance of maintaining community hospitals and the huge number of charities, voluntary sector bodies, and interest and hobby groups that work in our communities.
Above all—I suppose that this is the centre of the argument and the reason for the title of the debate—I was trying to understand from my own constituency experience which is the one place where all these community activities come together. Where do people find that they are talking to one another? Where do they meet and find that there is a commonality of their experience? Where do they find the strength of identity that goes with it? As it happens, the answer is: in the post office. It is difficult to think that the same is true of any of the other places that I have mentioned. Of course, for a large village event there might sometimes be a coming together in the village hall, but not everyone will turn up. Almost everybody, at some point, has to go into the post office, and they will find that that is where they come together. So, it becomes vital to examine closely how we will maintain the local community post office network. It is obviously a tremendous asset and an opportunity. The question is: how do we keep what there is?
As we know, most people still live within 1 mile of a post office—the figure is about 93 per cent. That is not the case in rural areas. Post offices provide services in respect of communications and the receiving of Government-related payments. There are currently slightly more than 14,000 post offices, and they serve 28 million customers. The current Government have presided over 3,800 closures—we have lost two post offices in my patch and between eight and 10 in neighbouring constituencies. There seems to be an average of about 18 post offices a constituency in Cheshire.
The chief executive of the Post Office has a responsibility to run his business most efficiently. If he were to reduce that figure to the number that he thinks that he needs to run his Post Office, one could infer that there would be a significant series of further losses of post offices. While rural areas and the urban deprived ones will be the hardest hit, it is clear that it is not our business in Parliament to tell the Post Office chief executive how to run his business most efficiently. He has a duty to do that. The question is: how do we make best use of that network and how do we preserve it? It might be a partnership. There might well be a need for Government and the Post Office to act together to recognise that the network is something to be valued and that, once lost, it cannot be revived.
I shall come on to that briefly. As I am sure my hon. Friend knows, it is quite a complex subject. It is important to recognise that the Government made a promise to keep post offices open, except in unavoidable circumstances. That was contained in the Labour manifesto of 2001. The pledge was to last until March this year, and I think it has now been extended until this autumn. That is important, because it is still within a relevant period. After much argument and urging the Government eventually made the welcome announcement that they would contribute £750 million—£150 million per annum—up to 2008 under the social network payments. The money is to support the rural and urban deprived community post offices and sub-post offices. We do not yet know whether it will be renewed.
That is important and goes back to a point that was made earlier, because a sub-postmaster or sub-postmistress is no different from someone in the rest of the private sector. They are in the private sector, and have bank managers to deal with and business plans to make. Most bank managers rightly want to see a three-year plan. We are now in a period in which it is impossible for a sub-postmaster or sub-postmistress to say confidently what their income will be.
The hon. Gentleman is making an important point. Does he agree that this is not only about the social network payment and the money that the Government make available to support the rural network? It is also about the level of commitment that they show to providing their services through post offices, the most important example of which so far highlighted is the Post Office card account. Next year, the contract for people buying their car tax disc at the post office comes up for renewal. There was an opportunity with both for the Government to show a commitment to post offices by providing services, not just by providing the funds for rural post offices, necessary though those are.
I entirely agree with the hon. Gentleman; indeed, I shall recite that argument as part of what I think the opportunity is for the Government to ensure that there is a sustainable future for these vital community services.
We were told by the Department of Trade and Industry, as the Minister will no doubt confirm, in November 2005 that it was planning a public consultation on the future of the social—that is the rural and urban deprived—post office network. That was originally planned to start in February and report by the middle of this month—within a few days, I suspect. I am very much hoping that the Minister will have the opportunity to put our minds at rest and say that he is now able to give us a timetable and the expected time of this report. We have been waiting for it with some anxiety. It is vital that it takes place, because it has not yet been started. No announcement has been made about when it will begin, despite the recent creation of a new Cabinet Committee. I think we are all beginning to wonder whether we should be holding our breath, because it will be chaired by none other than the well-renowned Deputy Prime Minister, and will deal with Post Office issues. We hope that it will be more joined-up across Government—
It is a very serious point. I want to report to the hon. Gentleman that recent correspondence with the Deputy Prime Minister about his Cabinet Committee implies that it has not yet met. Perhaps the Minister could put our minds at rest about that. Given the vital importance of the future of the post office network to our rural communities and, indeed, deprived urban areas, that Committee should be actively engaged in putting forward a strategy for consultation instead of sitting on its hands.
The hon. Gentleman made a very serious point if the Committee has not yet met. I would have thought that with new-found time on his hands the Deputy Prime Minister would think that that is one of the most urgent things he could get on with, given that there is so much pressure and anxiety while we wait for the Government to act.
I have had extensive discussions with many of my sub-postmasters and sub-postmistresses, as well as the National Federation of Sub-Postmasters, and have had the opportunity of briefings from Colin Baker, to whom I am grateful. All our post offices have both a social and economic role. It is well recognised that they provide a wide range not only of postal, governmental, commercial and retail services, but in rural and urban deprived areas they are often the only place where cash can be obtained. They represent a vital service for local businesses. Many rural businesses do not have a high turnover and it matters to them that their payment transactions and mailings are dealt with daily and promptly. It is not uncommon for those of us who represent such constituencies to hear of people making the run to the post office at 3.30 pm or 3.45 pm to catch the post because it is vital to the survival of their small businesses. If that service were lost it would be a major impediment to their survival.
What we as Members of Parliament probably get most concerned about is that post offices provide immense and vital support to the most vulnerable residents in our constituencies: older and disabled people. For example, the complexity of pensions is now so great that 1.7 million people who are entitled to claim the pension credit fail to do so. It is often the sub-postmaster or sub-postmistress who can give advice in a way that does not cause anyone to lose face and preserves the dignity of confidentiality, which is vital. They have confidence and knowledge and older people in particular value that and see the sub-postmaster or sub-postmistress as having a degree of independence from the Government as well as being knowledgeable and used by the Government as a channel of information. That independence often gives people the confidence to pursue that line of inquiry.
During the previous debate in this Chamber on pension credits more than one hon. Member, including me, raised concern about advisers on the telephone telling people who were entitled to the pension credit that only the first payment could be paid into the post office and that subsequent payments would be paid into their bank account. Does the hon. Gentleman share my concern that that is another stealthy way of trying to undermine the service? Clearly that is not Government policy, but are they aware of that practice and what are they doing to prevent it?
I have heard about that practice and the hon. Lady raises an important issue. Guidance and encouragement to do the right thing to sustain the relationships and incomes of post offices is needed and it is for the Government to take action. It is in the Government’s gift to influence such matters and they should not wash their hands of that.
The local post office often becomes a community focal point. People often congregate there and the police, local authorities and tourist organisations often display and provide information in them. They are increasingly places where people can go online if they are interested in doing so. Above all, we all have a shared responsibility in our communities and they are places where we can look out for one another. I am sure that we all know of someone in our community—perhaps an elderly person—who has gone to the post office when they were not well. They may have wanted to remain in their own home but have struggled out and the sub-postmaster or sub-postmistress did not face that person down with something that they would find embarrassing and difficult to deal with, but waited for a friend to come into the post office and alerted them quietly that the person they saw earlier might need looking after. That is such an important and valuable part of what post offices do in the centre of our communities. They help to preserve dignity and independence. I know that that happens almost weekly at one of the most enterprising small post offices in Wrenbury in my constituency, which Neil and Janet Palmer run to great effect. They are the centre of their community.
We should not lose sight of the fact that there is a multiplier effect in having a post office in the vicinity. Clearly, those who call into a post office will spend money elsewhere, not least if they are able to obtain cash because that is where the first, essential spends are made.
With incomes declining, the trend to non-viability and the fact that it is becoming increasingly difficult to make the idea of becoming a sub-postmaster or sub-postmistress attractive for people, particularly young people and young couples, to take over, the pressures of technology and the greater mobility that we all have means that we tend not to walk to a local service but to jump in the car. The question that then arises is, “What can the Government do about it?” They have the power to make decisions about state benefits and, particularly, how pensions are paid. Given the trend and the Government’s efforts to pay pensions electronically into accounts, there has been a substantial reduction in income from encashments. The National Consumer Council said in 2003:
“The end to cash benefits just hasn’t been thought through properly”
and the new arrangements
“take little account of people’s real needs.”
As we have heard, the Post Office card account was brought in in 2003 and it was said at the time that it would not be restricted, but earlier this year we found that it would be for only seven years. We have already had an important discussion about the major effect that that will have on the ability of businesses to plan and to receive investment support, and for confidence. What was amazing about the announcement in January was that the Government said that that was always intended. It cannot have been always intended if we knew nothing about it. I certainly remember the announcement because I was sitting where my hon. Friend the Member for Wealden (Charles Hendry) is sitting now. I well remember our hot debates to try to obtain a commitment that the card was sustainable and would not be limited.
Three years after its introduction, we learn from written answers—the information has only just been revealed—that the Post Office card account with 4.3 million users in the United Kingdom, providing 10 per cent. of the post office income, will be axed by 2010 with massive loss of revenue. No Post Office-based replacement has been announced. I hope that the Minister will be able to reassure us that there will be a son or daughter of POCA. The matter is important to us all and our constituents, not least the 1 million people who have signed the NFSP’s petition.
We heard in interventions about the loss of the BBC television licence contract, which, with other bill payments, represents 5 per cent. of Post Office income. The encouragement to renew vehicle excise duty online has shown a lack of commitment from the Government to encourage services to be provided by post offices as part of the underpinning of their social and community responsibilities and as part of a strategy that goes hand in hand with the commercial activities of the Post Office, which must run efficiently. There is the difficulty of gaining full recognition by the banks that they should see post offices as an extension of their network. That should be strongly encouraged, and I would have thought that the Government could do something to encourage that recognition. With rising costs, we are faced with the real possibility of closures. I am sure that the NFSP’s brief will be familiar to many hon. Members.
The problem is not just the inconvenience, although that is a particular difficulty for those with no transport or with mobility problems, and for older people; the problem is also that, in this more environmentally conscious age, closures will inevitably increase the use of the car, as people will have to go much further to reach a post office. Half of rural residents currently walk to their post office. We will find that increasing dependency on others becomes a feature of our communities, but many older people will simply not look for the assistance that they need, and they will often suffer quietly behind closed doors. We MPs have a duty to take real note of that.
Above all, community spirit will be badly affected. A spirit is always difficult to define, but we know when we have lost it. It is certainly difficult to rebuild. It is not an exaggeration to say that the post offices in our communities give strong evidence of community spirit. The loss of those facilities would have a very negative impact. Of course, if there is a multiplier effect, it will work both ways, including in a negative way.
I hope that colleagues throughout the House will join me in calling on the Government to undertake an urgent examination of the social—that is, the rural and urban deprived—post office network. I fully endorse what the NFSP says: a strategy is needed to combine the commercial and social activities. We have to accept that, as a matter of public policy, such a strategy will not necessarily be funded purely by commercial activities. It may need support, in which case we will need a review, so that Parliament and Government can come to a decision on the allocation of public resources to support a vital social and economic network across the UK. In the meantime, the Post Office can certainly encourage the use of services that can be delivered at post offices.
Communities must be put first, and we insist that central and local government use post offices as their primary outlet for information and services. We recognise that people want the continuing ability to feel an identity and belong to their communities, and want basic things, such as the ability to run their finances with cash rather than a bank account. That is a perfectly proper thing to do, and it can often be a much better budgeting process for those who have the least. We should not prescribe in either way, as there are plenty who would want a bank account, but the unremitting trend of alienating cash from the way that people think about managing their affairs is inappropriate and somewhat patronising.
Community value is strategic and is in the public interest. Our community services, epitomised by the local sub-post office, are the test by which we decide whether we can call ourselves a cohesive society. I call on the Government to act now, before it is too late. At the very least, I hope that the Minister will today announce the dates of the Department of Trade and Industry’s public consultation on the future of the social post office network.
I congratulate the hon. Member for Eddisbury (Mr. O'Brien) on bringing this well-worn topic back to Westminster Hall. It does not matter that we are going over old ground; until we get clarification of exactly what the Government want to do with the post office network, and of the plans on how to deliver services in rural areas, we will retread the same ground.
I welcome this morning’s debates. I see this as a three-hour debate; I hope that all hon. Members will stay for the second part, which is on the future of affordable housing in rural areas. To me, the two subjects are inextricably linked. It is no good talking about service provision unless we consider who lives in rural communities, and how they can afford to live in them.
I start by laying down a challenge. Too many rural communities want to maintain their services, but do not think about how they will do that. All rural communities need to regenerate themselves. They either grow in a sustainable way, or they die.
The hon. Gentleman is a well known campaigner and fighter for rural communities, but does he acknowledge that post offices are important to urban communities, too? They have been hit hardest over the past five years, with the number of urban post offices falling from about 9,000 to only 6,500. They are just as important to vulnerable people.
I thank the hon. Gentleman for being so generous. I shall refer tangentially to the Sustainable Communities Bill. The hon. Gentleman talked about the importance of rural communities and their wider sustainability, in terms of supporting services such as post offices. Does he agree that, unfortunately, rural communities are often hamstrung and have no control over important aspects of their future sustainability, such as over the growth in the number of second homes? At the moment, there are no restrictions on that growth, which is one of the key drivers in undermining the social, economic and environmental sustainability of many rural communities.
I thank the hon. Lady for that; of course, I agree with her. I shall push on and try to connect some of the points made.
I stress that in the Sustainable Communities Bill—I hope that the House will treat that subject increasingly seriously—there is at least the idea of a strategy on how local communities can take back power and responsibility, as they perceive, at least, that they have lost it. I think that often that is a perception, rather than a reality, but of course if a community has an out-of-town shopping facility, that is a reality that it cannot escape from.
There are three levels, and we have to start at the level of the individual. Too often, individuals complain about the loss of their post office, pub or village school, yet they drive past that school with their children, or drive past those facilities to the supermarket, or they work 200 miles away. That may well be the nature of the world that we live in, but it is not a good world, a sustainable world, or a world that will be fit for purpose in this decade and beyond. The adage “use it or lose it” applies, and too often we lose it, because people become concerned about a facility only when it is about to close. That is sad and reprehensible, but it is avoidable; we must start with the individual.
One of the problems with the Post Office card account is that too few people in the know have signed up to it. I have signed up to it; that is a moral responsibility to which I have adhered. I hope that the decision-makers see the value of it, and run it alongside bank accounts. It was never supposed to be a pure alternative to the bank account; it was supposed to be a different way for people to withdraw money. I know that that is not the Minister’s responsibility, but he has to talk to the Department for Work and Pensions about what plans it has for POCA. We just need coherence. A lot of people signed up for POCA because it is easy and successful, but also because they believed that that was how to keep their post offices open. Let us build on that.
Next, we move on to the level of the community. I believe that the whole community has a responsibility to its service provision. I declare an interest: I am still a town councillor in my town of Stonehouse. We were faced with the post office not necessarily closing, but being moved from a specially built building, and with a possibly deteriorating service. The town council, because it had money, invested in that facility and took the whole building on; now, the town council building abuts the post office. To me, that is the best of both worlds. A lot of smaller community councils do not have the money or wherewithal to do that. However, when they produce their annual report for their parishioners, they should state whether they have engaged with their post office and service deliverers in order to determine whether there are things that they could do better together, whether there is a mutual support mechanism, and whether they should go out to their community and say, “We need to invest in those services.” The idea of the common bond and the money that could be raised therein is not a fantasy. People can sign up to the belief that their services are important, and they can put their money where their mouth is.
The Library’s debate pack provides an excellent run through the issues. I am featured on page 3—I hope that it does not go to my head—in a story about Paganhill in my constituency. Paganhill post office was situated within a one-stop shop. There is a Tesco less than a mile away, but Tesco took on the one-stop shop and announced that it intended to move the post office out. Catastrophe! The community were up in arms, but what could they do about it? It just so happened that the Maypole hall, which was round the corner from the post office, was willing to consider assimilating the post office. It was a long saga, but 18 months down the line, 10 days ago, the new, refurbished post office opened in the Maypole hall.
There were three heroes: Alan Churchill, who chairs the Maypole hall committee, Robin Craig, who has taken on two sub-post offices and is looking to take on more, and Cyrsta Harris, who works for Stroud district council in its community development department. They all worked hard to make the transfer happen, and it is people like that who keep our services alive. Tesco, the Post Office and others played a part, but that is what is vital: people have to make things happen, otherwise services will be lost.
I was in Oakridge yesterday, a small village on the outskirts of my constituency. Mike and Kim Gorney live there, and she runs the sub-post office. Two hamlets, Oakridge Lynch and Far Oakridge, came together to keep a sub-post office going throughout all the recent difficulties. She has run it for the past 12 years, but Mike and Kim want to move in order to improve and extend the post office and introduce longer opening hours. I do not want to pre-empt the planning process, but I hope that they receive permission. Yesterday, they took me through how they will fund the development, and they are looking for help. One important aspect of the figure of £150 million is that it is supposed not only to pay a pure subsidy to keep businesses going, but to reward innovation. However, when the Gorneys look for funds, it always seems that the funds are spent up or they are not the right ones.
The last two pages of the excellent debate pack refer to the different funding streams available. The rural capital start-up subsidy scheme has gone, to be replaced by the rural re-start scheme. Interestingly, it has to be match-funded, and the Gorneys made it clear how difficult that is. When one raises money to buy a building and undertake much of the work, one has to pay for the movement of counters, security and so on. The rural investment fund was launched in October 2004, but it has only £1 million. Against the thousands of post offices that are trying to keep themselves going, let alone improve, it is not a great sum of money. I hope that my hon. Friend the Minister will explain how we can bolster it. Many post offices are able to take advantage of the rural rate relief, but it does not help when one moves a business. A small rural post office is already likely to have drawn down that money.
The Government need to be clear. They cannot keep withdrawing services. The Post Office card account is a classic case of worthy investment, and to announce that it will be run down over the next couple of years and replaced with bank accounts is not good news, because it is a psychological kick in the teeth. People have invested a lot of money in their business and they have run it not to make money. The submission that I think we all received from the National Federation of Sub-Postmasters shows that the average drawings are less than £1,000 a month. There are some bigger post offices, but as the submission says, it means that an awful lot of people take substantially smaller sums than even two years ago. They are minuscule. However, those people are heroes, and that is why communities owe them an obligation. It is no good saying, “Isn’t it terrible that they no longer want to carry on and nobody wants to take this business on from them?” One must be slightly mad to take on those businesses, such is the level of reward; however those people are true heroes and they should be rewarded financially and because they are key people in their communities.
The issues to do with the Driver and Vehicle Licensing Agency, which the hon. Member for Eddisbury highlighted, and that TV stamps saga all give out the wrong signals. They may not be problematic as discrete decisions, but collectively they are doing immense damage.
Those issues not only send the wrong signal, but downgrade a service. In my constituency there are 41 sub-post offices in which people can obtain a TV stamp, but there are only 16 PayPoints. It seems rather sad that the two organisations could not come together to work out how they could have maintained a mixed system in rural areas. The Post Office could have assisted people, as it has with banking, and reached further into the rural community.
I agree. I shall refer to the ATM issue, because I seek clarification from my hon. Friend the Minister about their—and perhaps other services’—introduction in rural post offices.
The Post Office sold me on the hub and spokes idea, whereby the main post office, which the Post Office might own, becomes the hub and uses its delivery mechanism to work in tandem with sub-post offices. As the hon. Member for Eddisbury said, they can remain independent private businesses, but it does not mean that they cannot co-operate. It is far better they do, rather than compete against one another and fail, with all those businesses suffering as a result.
I make no apology for concentrating on rural businesses, because they are under greatest threat. We have been through the urban reintegration issue, but I hope that my hon. Friend the Minister will clarify where the hub and spoke idea has got to. It affects what we do in Stroud, but it seems to happen by accident. Perhaps it happens by osmosis, but it does not seem to happen by design. It is not as well planned as it could be, and I want to know that sub-post masters and sub-post mistresses are being given all the help that they require to keep their businesses going, expand them and co-ordinate them with others.
The hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith) referred to banking and financial services. It is a crucial issue, because the whole system needs to hold together. Last week I received from the Post Office a long press release about the installation of ATMs in more sub-post offices. Even though my hon. Friend the Minister does not speak for the Post Office, he can talk to the Post Office, and I read into the press release that ATMs would be free of charge. We need to build up a bond of trust with customers and keep them using post offices, and if there are no banks easily accessible for miles around, they could be tempted to use ATMs and allied services. Foreign exchange has been a huge success story recently.
I want the process clarified. It is no good putting out press releases if we do not know what they mean in detail. If the post office is to become the community’s financial hub, we want to know that it will be invested in properly, and that it will be affordable, which means that we do not charge the poorest people more than they would pay if they could get to a bank. We have to make the process as easy as possible.
The challenge exists, but it will not be met by the Government alone. Communities and individuals bear a responsibility, too. The Government must set the strategy correctly and put the money in, and clearly £150 million will not be enough next time. We shall have to consider how we revisit and rework what we are doing in the more urbanised areas, as we are now considering the true urban centres, which face somewhat different problems. That is the challenge. I hope that we can move forward, and this debate has been a worthwhile opportunity to do so.
Several hon. Members rose—
I welcome you to the Chair, Mrs. Humble. I also want to congratulate the hon. Member for Eddisbury (Mr. O'Brien) on securing the debate, which is important. The fact that we have had a series of debates, on both the Post Office card account and the Post Office, shows how concerned hon. Members from all parties are about the future of the post office network.
The Post Office has suffered three blows this year: the announcement that the Post Office card account will be withdrawn in 2010, the encouragement to motorists to renew their car tax over the internet, and now the removal of TV licensing. What strikes me is that we have in the Chamber the Minister from the Department of Trade and Industry who is responsible for the Post Office, but those decisions have all been made by other Departments, which seem to be under pressure to cut their budgets and appear to be acting independently of the DTI.
We have heard that the Deputy Prime Minister is the Chairman of the Cabinet Committee that is supposed to be co-ordinating Government policy on the Post Office. I was extremely shocked to find out that the Committee has not even met yet. It is easy to make jokes about the Deputy Prime Minister, but as this is a serious debate I will avoid doing so. I simply point out that the Deputy Prime Minister seems to have nothing to do other than chair Committees, so if the Minister takes one thing away from the debate it should be to go to the Deputy Prime Minister and say that the message from all parties is that we want him to get on with the job of getting the Committee up and running and to come up with a solution.
The Post Office card account is clearly an important part of the business. I shall not go into detail on that subject today, because we have had plenty of debates on it already. However, I stress its importance and the need for a Post Office account to follow on from POCA and allow people to collect their benefits and pensions from the Post Office and from their Post Office account. Again, it is important that we have an early announcement on that subject. To emphasise a point that has already been made, as sub-postmasters and mistresses retire they will not be able to find anyone to take on the business unless it is seen to have a secure future. The most important thing that the Government can do is to make an early announcement that there will be a Post Office successor to POCA.
The other issue that I wanted to mention was that the Government have taken away TV licence renewals from the Post Office, which is taking away a service from rural communities. The contract has been given to PayPoint, and PayPoint tends to be based in Co-ops and Spar supermarkets and nearly all the outlets are in towns. It rarely has outlets in villages, so the service is being removed from rural communities.
PayPoint also seems to have an incompetent computer system that tells people the location of their nearest PayPoint outlet. Most worryingly, TV Licensing, too, is using that computer system to tell people where their nearest outlet is. I have a licence renewal letter that was sent to a constituent of mine in the village of Cardross, on the north bank of the river Clyde with a population of more than 2,000 people. It has a post office where people have been able to renew their TV licences for many years, but it does not have a PayPoint outlet. The letter to my constituent lists the local PayPoint outlets, and gives two, both in Port Glasgow. The PayPoint website says that Port Glasgow is only 2 miles away from Cardross. That is all very well, but the only problem is that the river Clyde is in between. The Minister knows the geography well, and if someone wants to get from Cardross to Port Glasgow they have to drive 10 miles up the north bank of the Clyde to the Erskine bridge, cross the bridge and drive 10 miles back. Clearly, the computer system is totally incompetent. There is a PayPoint outlet 3 miles away in Dumbarton, but the letter does not point that out. How can the Government possibly have given such an important contract to such an incompetent company, which does not have outlets in rural areas?
Another disadvantage of PayPoint is that because it does not have outlets in rural areas it causes great difficulties in many of the islands in my constituency. Seven of those islands—Lismore, Iona, Coll, Colonsay, Luing, Jura and Gigha—have post offices where people can renew their TV licences. There are no PayPoint outlets on any of the islands, so how are people there supposed to renew their TV licences? Clearly they can do so over the phone or through the post with a postal order, which, if they do not have a bank account, they will have to pay a lot of money to get, but they cannot take advantage of the new card that is the successor to the TV stamp scheme. People in those islands are being excluded from that important Government service.
If people on the islands are not able to buy their TV licences, I have a solution: we should simply make using a TV on the islands free from the requirement to obtain a TV licence. If the Government are not prepared to set up outlets for people to buy their TV licences, the quid pro quo should be that a licence is not needed to operate a TV on any of the islands. Those are my messages for the Government today.
I am grateful to the hon. Member for Argyll and Bute (Mr. Reid) for leaving me time to speak. I feel very sorry for the hon. Member for Stroud (Mr. Drew), and the Minister ought to listen to him. Week after week he turns up to Westminster Hall, because he has a majority of only 350, and tells the Chamber about how the Government are cutting services in his constituency. The Minister, who has the benefit of a majority that is nearly 20 per cent. of the vote in his constituency of Poplar and Canning Town, ought to listen to the hon. Gentleman because it is the seats such as his that are keeping Ministers in red boxes and croquet sets. I hope the Minister will listen. It is also important that the hon. Gentleman is the only Labour Member who has bothered to turn up to the debate at all, which highlights a cause for concern.
I hope that the Minister will take time during the summer recess to visit a constituency such as mine—he would be welcome in Banbury—to see how rural or semi-rural England works. The Minister represents Poplar and Canning Town; most Ministers seem to represent inner-city constituencies and they have little understanding about how rural and semi-rural England works. Indeed, the Minister’s responsibilities include London. I hope that someone in the Department of Trade and Industry is responsible for the English countryside, rural areas and how they function. I do not think that anyone is.
The Government make much about social exclusion, which, for them, seems almost entirely synonymous with inner-city deprivation. There seems to be no understanding in the Government that we can have rural social exclusion, and that we can have social exclusion in housing estates on the edge of towns such as Banbury and Bicester. They ought to see the Post Office as an opportunity.
Where does government interact with the people? We hear a lot from the Prime Minister about enhanced delivery of public services, but we are seeing a continuing alienation and remoteness of government as more is done online. That is fine for younger generations, who might be competent and au fait with being online and using the internet, but for older generations that is not always the case. We see the removal of services that gave people face-to-face contact with government such as Jobcentre Plus, which has disappeared entirely in a big town such as Bicester, one of the fastest-growing towns in England. If one cannot get online, the only other way to connect with the machinery of government is through call centres and the infuriating process of having to press serial buttons, which drives constituents and all of us completely crazy. We are privileged with most of those systems, because the Government have realised that they do not work, in having MPs’ hotlines so that we do not all go mad with Ministers in the Division Lobby.
The Government ought to see Post Offices as a real opportunity where the state and the machinery of government can interface with people and tackle some of the issues of social exclusion that the Government talk about.
The withdrawal of the Post Office card account from 2010 is absolutely crazy. At a stroke, it will undermine the viability of practically every village and urban sub-post office. As my hon. Friend the Member for Eddisbury (Mr. O'Brien) said, it was also disingenuous, because when the scheme was introduced everyone thought that it would go on for ever—that there would be a degree of continuity and substance. The Government’s withdrawal of the card account will undermine the post office network, and once that has happened it cannot be replaced. Once the post offices have been sold and the premises disposed of, they will never be available again.
I am not surprised that the hon. Gentleman, desperate to hold on to his majority of 350, should implore the Minister to throw him a lifeline by maintaining rural post offices, but if Ministers do not start to listen to the voice of England they will lose many more constituencies than Stroud. People are fed up with a Government who have become increasingly distant and remote—a Government who simply do not listen to those who want to see protection for the elderly, the isolated and the disadvantaged.
I thank the hon. Member for Eddisbury (Mr. O'Brien) for initiating the debate. I also thank all hon. Members who have spoken. I have a word of consolation for those of my hon. Friends who were unable to speak because of time constraints. The Liberal Democrats, like all parties, believe that this is an important issue, but I shall be brief in my response to this wide-ranging discussion, as we all look forward to many of our questions being answered by the Minister.
It seems to me that two forces are pulling against each other—the Government and the community. Communities want control over their lives and their surroundings. The Government have a tendency for centralisation, which they use in the name of efficiency and standardisation.
In Solihull, neighbourhood policing has worked most effectively, as has community support. The idea of localisation, of familiarity with one’s immediate area, has been extremely successful for Silhillians and, I am sure, for all in the United Kingdom who have been able to enjoy its benefits. I understand that an announcement will be made later today on the merger of police forces into super-forces; I hope that the plan will be shelved.
Similar things are happening to ambulance trusts, with 29 forces being reduced to 12. Again, that is a removal from the local area and local knowledge.
On the merger of ambulance services, I can tell my hon. Friend that in my constituency recently, first responders—they provide a remarkable service, particularly in rural areas, by getting to critically ill people before the ambulance arrives—have not been called out because the system has been changed. It is now more centralised and more automated, and because the service covers a larger area peoples’ lives are being put at risk. Does my hon. Friend share my concern about that development?
I do indeed. My hon. Friend gives an important illustration of what can go wrong when over-centralisation takes place.
About 80 community hospitals are under threat. We have lost 1,400 beds since 1999. The idea of a market-driven concept does not sit well with community hospitals. It seems to be their fault if they cannot make ends meet, and they have to close as a result. There is much concern among local people; community hospitals is a hot topic in many areas.
Hon. Members have already spoken about small shops, pubs, pharmacies and many other organisations. I remind the House that 30,000 independent retailers have closed during the past 10 years. We have often debated the encroaching role of the supermarkets, whose non-food sales have doubled in the last five years, and we have spoken of their predatory pricing and their squeezing of suppliers, and particularly in rural areas, those selling at the farm gate. That all gives rise to great concern.
As many as 20 per cent. of post offices have been lost in the past five years. The Government’s contribution to that, I am sorry to say, comes in the withdrawal of tax disc renewals, pension book payments and the Post Office card account. That all illustrates how much more difficult it is for post offices to make a living. However, I am pleased that the social network payments have been retained until 2008.
I am pleased also that other innovations are being explored that one hopes will be implemented in many areas. One idea is the hub and spoke system in which a major village has a post office with satellites in the surrounding villages in pubs, village halls, mobile post offices and in partnership with libraries, the police and so on. Those are all innovative ways that could help support the vital community link.
It has been alleged that members of my party and others who are extremely worried about the sustainability of communities are clinging on to a romantic concept of the village and the community as they used to be 50 years ago. We certainly cannot go back, but we can use what works. I have already mentioned neighbourhood policing. Solihull is also spearheading a care trust, a partnership between health and social services working as one, which I am excited to see and which I hope will have a good result.
My hon. Friend the Member for Falmouth and Camborne (Julia Goldsworthy) has introduced the Sustainable Communities Bill, and I understand that an early-day motion supporting it now has the support of more than 50 per cent. of Members. I ask the Minister to give serious consideration to the issues dealt with in that Bill. While speaking of private Members’ Bills, my Local Government and Planning (Parkland and Windfall Development) Bill seeks to ensure that local communities have some say in the planning decisions that affect their lives.
In control is where people want to be. People want to be in control of their lives, their destinies and their communities. When that control is taken away, the sense of community breaks down and we see alienation in the countryside and the town, where the need, particularly of the young, to assert identity manifests itself in a plague of graffiti and other forms of antisocial behaviour. We see elderly people alone, afraid to go out, with nowhere to go, and with their shops and post offices shutting down; and we see communities disintegrating as their character is changed beyond control and beyond recognition.
The psychological health of our nation and our communities is at stake. It is worth more than a few figures on the balance sheet. We want community services to be just that—services run by and for the community. We say no to ghost town Britain. We say yes to sustainable villages and towns, which are defined by thriving local economies, environmental protection, community involvement and democratic participation.
I congratulate my hon. Friend the Member for Eddisbury (Mr. O'Brien) on securing this important debate. There is an element of “Groundhog Day” about it; we regularly pop into the Chamber to discuss the future of the Post Office network. We last did so on 14 June, when I welcomed the Minister and said that we were prepared to give him a small exemption because he was new to his post, but that he had to come up with some answers soon. I went on to say:
“We are watching the whole network crumble while Ministers simply wash their hands of responsibility”.—[Official Report, Westminster Hall, 14 June 2006; Vol. 447, c. 293WH.]
That was an interesting mixed metaphor; I hope that the Minister has now finished washing his hands and that today he will break out of the Groundhog day tradition to give us clear answers about the future of the Post Office network.
The debate has been extremely wide-ranging and has covered a tremendous number of issues of enormous importance to our rural communities and others. My hon. Friend set those out with great clarity and understanding. He made a particularly important point in saying that we were not seeking to preserve communities in aspic, but trying to find a realistic way forward to bring new life, vitality and business into them. We are not trying to preserve something for the sake of tradition.
My hon. Friend outlined some of the other issues that we are considering in this debate: the village shop, the pub, the churches, the school bus services and village halls. We have also heard about pharmacies and ambulance services. One of the most startling points made to me by the excellent head of the Sussex ambulance service, Paul Sutton, was that only 5 per cent. of people in this country who have a cardiac arrest outside hospital will be alive two years later. In Finland, a much more rural country, 10 times as many—nearly 50 per cent.—will be alive two years later because there are defibrillators in the local communities. The issue is not only about relying on the local ambulance service, but how to put new services into the communities that will help people, and improve and save their lives.
Safety is a further aspect that should be mentioned. If we had had this debate 10 years ago, none of us would have said that there was a problem of antisocial behaviour in the communities that we are talking about. However, such behaviour has now spread out of the cities and into the big towns—into large villages as well. One of the things about which people are most concerned is the lack of a police presence in those communities and the lack of a sense that crime is being brought under control in them.
My hon. Friend the Member for Banbury (Tony Baldry) was absolutely right to highlight the extent to which Government services have been systematically removed from our communities. Such services are becoming more and more remote. My hon. Friend highlighted how, ultimately, they are moved to call centres with no connection whatever with the people whom they are supposed to serve. That process, of course, is part of the Government’s regional agenda, so beloved of the Deputy Prime Minister.
It was intriguing to hear the hon. Member for Solihull (Lorely Burt) criticise those changes; the Liberal Democrats are also committed to the Government’s regional agenda. If the hon. Lady wishes for such an agenda, she should know that the consequence is that increased remoteness of services. The only way to break away from that is to scrap that agenda and move decision making and power back to the communities that are most affected.
This debate is not just about whether Stroud, or a range of other marginals, will continue to be a Labour seat after the next election; we take it for granted that they will not. The issues are much more important. They are about the whole range of facilities that people enjoy in their communities and the survival of those communities. I hope that the Minister will be able to give us some good answers today.
The Post Office had declined dramatically. In 1999 there were 18,374 post offices in this country. There are now 14,400—a decline of 20 per cent. in just five years. In 1999, there were 43 post offices in my constituency. Now there are 28, a decline of a third in just five years.
Rural post offices account for about half the network; there are, perhaps, about 7,800. Nevertheless, they account for only 10 per cent. of the business. On average, they have something like 350 consumers a week, but 1,000 rural post offices have fewer than 50 consumers a week. We need to be sensible; we cannot simply preserve a business that is not operating well. Sometimes the postmaster or postmistress decides to move out. However, we need a strategy and long-term vision for what role the Post Office should play.
This year, the Post Office network will lose £2 million, and that loss is expected to double next year. In the course of that, the Government are withdrawing £168 million in Government contracts from the Post Office network. As we have heard, that will get worse. There are the issues of the Post Office card account, the changes in respect of renewing car tax licences online, and the moves, on commercial grounds, not by the Government but the BBC—although the Minister was accused of being responsible—to take the TV licence away from the Post Office and to give it to PayPoint.
The chief executive of the Post Office, Adam Crozier, has said that he can fulfil his legal obligations with just 4,000 post offices. We have to be very careful about how we interpret that; he is not saying that that is what he wants. We should also pay tribute to the outstanding job done by him and Allan Leighton in turning around the Post Office. However, we need to understand that Mr. Crozier can meet his legal commitments with just 4,000 post offices. If we want more than that, it is up to the Government to come forward with a strategy. The Post Office has a business to run, but a Government strategy and vision is completely lacking in this debate.
As my hon. Friend the Member for Eddisbury said, current Government funding for the Post Office network runs out in 2008. Decisions are being made now. In the coming months, people will sit down to decide whether they should close down or sell on their business. They may turn it into a house because they simply do not know what the future holds.
The Minister has to start coming up with answers. We look particularly to him to give examples of how we can bring new business into the Post Office network. Could post offices be used as centres for storing undelivered parcels? Courier companies often cannot deliver huge numbers of parcels. Rather than taking them back to their bases, why should they not take the parcels to the village post office, where they could be collected in due course? Can more be done with what is called the first mile of the postal network? Businesses in communities might bring their post to the Post Office and send it to whatever postal service delivery network they wished to use.
What are the Government doing about a successor to the Post Office card account? Ministers have to take the lead on that issue. In the 14 June debate, I said to the Minister that there had been too many examples of people being instructed to move from Post Office card accounts to bank accounts for that to have been happening by accident. Ministers must confirm that they will send a message to every single agency stating that they should put no pressure on people to move away from the POCA if they do not wish to do so.
In the months since then, has the Minister had a meeting about the issue? Has he written or spoken to his counterpart in the Department for Work and Pensions to make the point clearly? Furthermore, has he told his counterpart that DWP Ministers cannot simply stand back from the issue and say that it is a matter for the Post Office? It is a matter for the Post Office and the Government, and the banking community should be brought in as well. We need the Minister to take a lead on the issue, and I hope that he will give some more encouraging news today.
In the light of what we have heard today, will the Minister ensure that he has a discussion with the Deputy Prime Minister soon? The Deputy Prime Minister has very little else to do apart from sticking his tongue out at the media, so why has the Committee that he chairs not met? We are debating one of the most important issues, which affects every single constituency in this country. If the Deputy Prime Minister, with his reduced responsibility, has not found time to chair that Committee, that is a complete scandal.
There are ways forward, but so many of them are in the hands of the Government. We look to the Government and the Minister to give clear examples of how to move forward. However, I want to finish on a positive note. At this time of year, we go every weekend to village fêtes and to see what communities are doing to make themselves vibrant, successful and good places in which to live. We owe an incredible tribute to the people who make that happen: those who write the parish magazines, put on the village fêtes, run the local sports clubs and give cricket, football or rugby training for youngsters.
The communities in this country remain incredibly special. The fact that our communities are losing some of their economic vitality should concern us all. However, they remain immensely special places because of the desire of so many people who live in them to contribute to and improve their communities. We owe a tremendous debt of gratitude to the many people in our constituencies who make that happen.
It is a pleasure to see you in the Chair today, Mrs. Humble. I associate myself with the concluding remarks of the hon. Member for Wealden (Charles Hendry). It was clear from the response of other hon. Members that they also supported those remarks.
I congratulate the hon. Member for Eddisbury (Mr. O’Brien) on securing this debate. I shall keep my remarks to a minimum but try to respond to as many of the points raised by hon. Members as possible. However, I am not able to provide a definitive timetable, so the outcome of the debate will not be to everyone’s satisfaction.
Let me make it perfectly clear that the Government have heard everyone’s concerns and will take heed of them in their continuing deliberations on the future of the post office network. If it is to survive and have a sustainable future, it must adapt to the changing circumstances and environment in which it operates. Many sectors of the post office network lose substantial amounts of money. The rural network loses some £150 million a year, and the directly managed Crown offices have been losing some £70 million annually. The status quo is simply not sustainable. Several important steps to restructure and revitalise the Post Office have already been taken but the future of the network rightly remains an issue of national debate.
I acknowledge the generous comments of the hon. Member for Wealden about the success of the chairman, chief executive and staff of Royal Mail in turning around that service, which only a few years ago was losing £1 million a day. It has moved back into profitability and is investing on behalf of the taxpayer in a much more successful business. However, as everyone acknowledges, that involved painful changes.
As the Minister with responsibility for postal services, I have a contradictory role, given the circumstances in which I find myself. I want to help ensure the widest provision of services but also a sustainable network. Just before the debate, the hon. Member for Eddisbury and I discussed that contradiction in the corridor. There is clearly a need for a community network, but it must have the bedrock of a sustainable commercial network.
I appreciated the tone of the debate. It would have been easy for hon. Members to come here and criticise. I am not saying that there were no criticisms—clearly, there were—but in the vast majority of the contributions they were delivered in a constructive way. I assure hon. Members that I and officials at the Department of Trade and Industry are working extremely hard with officials and Ministers from other Departments on the issues that were raised in the “Groundhog Day” debate only a few weeks ago. Obviously, we will consider issues that have been raised today that are separate from those, but I suspect that all the bases have been covered in our considerations. We want to arrive at the best possible strategy in our conclusions. As colleagues would expect, I have also initiated discussions with Post Office Ltd and the National Federation of Sub-Postmasters in past weeks.
The hon. Gentleman said that the number of signatures on petitions shows the depth of feeling. Our response to that is straightforward: many people express an affinity with their post office by signing petitions. Unfortunately, as my hon. Friend the Member for Stroud (Mr. Drew) said, that does not mean that they use the services. There is an affinity with rural services but translating such support into commercial usage of the post office is obviously one of the challenges that we face. The least used 20 per cent. of offices in the rural network average 40 customer visits per week, and the least used 10 per cent. average just 16 customer visits per week. At £17 per visit, those figures loom large in our calculations.
The hon. Gentleman and other colleagues discussed the difficulty in selling on sub-post offices because of the uncertainty of the future. We recognise such concerns, but the sale of sub-post offices on a commercial basis continues. In 2005-06, there were 1,243 successful transfers—649 rural and 594 urban—and an increase on the number for 2004-05, which was 1,179.
The hon. Gentleman suggested that post office partnerships with stores such as pharmacies and with churches ought to be considered. From our initial £450 million support package, £25 million was set aside for a flexible fund to enable the Post Office to pilot new ways of delivering services in rural areas in a sustainable way.
The hon. Gentleman made some interesting suggestions about how other partnerships and other business services could increase viability. The Post Office is undertaking several pilot initiatives aimed at increasing usage of rural post offices; for example, the pilot with the police, which was mentioned by the hon. Member for Solihull (Lorely Burt), in which the local sub-postmaster or postmistress handles simple inquiries in the community and can report crimes. Post Office Ltd is also considering working with tourist information offices to enable the local post office to offer advice.
Furthermore, the Post Office is testing alternative means of service delivery. The core and outreach model, which was mentioned by colleagues, is being piloted by the company to expand the reach of the network to meet the needs of outlying small communities. Typically, the core sub-postmaster provides a service at locations such as the local village hall or pub for several hours each week. The Post Office published its report on the pilot trials in March. The lessons from the pilots will play an important part in the consideration and informing of the Government’s longer-term decisions on the future of the network.
The hon. Gentleman asked about Adam Crozier’s comments about what he would need to fulfil the licence obligations. He answered his own question when clearly identifying them as a hypothetical response.
If the hon. Gentleman will forgive me, I am trying to get through as many answers as possible.
The hon. Member for Eddisbury said that 93 per cent. of people lived within a mile of a post office, but that that was not the case in rural situations. In rural areas, 85 per cent. of households are within 2 km of a post office. That compares with 79 per cent. of rural households that are within 4 km of a doctor’s surgery. There are 8,000 rural post offices—some 55 per cent. of the network—catering to only 19 per cent. of the population. That clearly suggests an imbalance.
The hon. Member for Castle Point (Bob Spink) is not in his place, so I will pass by his question. The hon. Member for Eddisbury said that the Government were forcing people away from post offices. I do not want to be partisan, but it was the previous Conservative Government who first introduced direct payments. Not only this Government have changed how benefits are provided.
The hon. Gentleman said that the Government should use post offices as a primary outlet for their services. I assure him that other Ministers and I are considering exactly what we ought to be doing to ensure that we identify the protection that Government services might be able to offer.
My hon. Friend the Member for Stroud asked about fee-charging automated teller machines in some offices. Post Office Ltd has changed its cash machine strategy and is withdrawing from its contractual arrangements with the existing ATM suppliers, which supply fee-charging machines. A new partnership with the Bank of Ireland will result in the introduction of 1,500 Post Office-branded free-to-use ATMs across the network in the next few years. My hon. Friend may take that message to his constituents.
The hon. Member for Argyll and Bute (Mr. Reid) asked whether the Government are to blame for the decline in the post office network. I remind colleagues that we cannot force people to use post offices. We ought to do as much as we can to provide Government services through them, but we also provide services on the internet, by telephone and by mobile phone, and people readily access them through such means. We must work within the context of that trend. I am sure that those who are responsible for television licensing will receive suggestions about free use of TVs on islands and respond to them directly. However, I am not sure that they will agree.
My final comment is to the hon. Member for Wealden. I had a meeting with a Minister from the Department for Work and Pensions on the Post Office card account and other issues raised in our last debate and with other Ministers on the issues that clearly are of concern to both Government and Opposition Members. Inevitably, suggestions for change in and restructuring of the post office network—
Affordable Housing (Rural Areas)
I am pleased to introduce this debate, particularly in the context of the Affordable Rural Housing Commission’s report that was published in May. I thank the Minister for commissioning the report and congratulate the commission on its work, but towards the end of my speech I shall press her on what the next steps are, because affordable housing is a big problem in rural communities. Although progress has been made, we need to make further progress.
From my experience in Nottinghamshire, people have difficulty moving into the rural villages that surround the Nottingham conurbation. I know a family in Farnsfield, for example, three generations of whom live together—grandparents, parents and children. The children aspire to live in the village, but there is no affordable accommodation for them. There are similar problems in places such as Lambley, Lowdham and Woodborough. They are attractive villages where house prices have spiralled and young people have difficulty getting into the market. The situation is difficult in Nottingham, but I am painfully aware that it is far worse in other parts of the country, particularly the south-west, most of the south and the national park areas.
Everyone has a right to decent housing, whether they live in the town or the countryside. It is important to acknowledge that many people aspire to move out of the town and into the countryside. The Countryside Agency suggests that 100,000 people a year move out of the town and into the countryside, hoping for a better quality of life. We need to ensure that there is not an urban-rural divide. Some people, including some politicians, argue strongly that urban issues are different from rural issues, but rural housing is one side of the same coin—people move out of the town because they are worried about poor educational standards, high levels of crime and a decaying environment.
We need to continue to work hard as a Government to build on what we have achieved, to ensure that our town centres are revitalised and become places where people feel pleased and comfortable to live. The Government have a long history and a good platform on that. We need to continue that work, but of course we need to do things in the countryside too.
That is why I was delighted that our rural manifesto at the last general election contained a commitment to establish a commission on rural housing:
“We will establish a Commission on Rural Housing and ask it to explore measures to ensure that local residents and their families can have access to affordable housing. The Commission will examine a range of models—such as cooperative ownership or shared equity—to see which work well in a rural setting.
We are also keen that they look at the place of government owned housing stock in rural areas in addressing rural housing need.”
The commission was established shortly after the general election. It was chaired by Elinor Goodman and produced a comprehensive and well inter-linked report in May. The commission is keen to make progress with the report and so am I.
The commission has described its report, saying that it offered
“practical solutions which would improve access to affordable housing to rent or buy for those who live or work in rural areas. They were to be evidence-based, draw on best practice and propose action which could be taken forward across public, private and voluntary sectors.”
The commission achieved that aim. Its report contains a range of measures that, taken together, can be a move towards providing affordable housing.
Before I come to solutions, however, I want briefly to consider some of the evidence that the commission gathered. The statistics tell a compelling story. There was a 6 per cent. decline in rural new build as compared to a 29 per cent. increase in urban areas between 1998 and 2005. Average house prices in the countryside rose by 73 per cent., as compared with 68 per cent. in towns, between 2000 and 2005. It is therefore not surprising that, with rising prices linked to spiralling demand and falling supply, house prices for first-time buyers are 12 per cent. higher in rural districts than in towns and that the median house price in a rural area is 6 per cent. higher than in the towns.
If that was not problem enough, the average earnings in the rural economy are £17,400 a year, compared with an urban average of £22,300. The combination of high house prices and low incomes in rural areas means that people seeking to buy, even at the bottom end of the rural market, have to pay seven to 10 times their earnings, compared with an average of 3.4 to four times in urban areas. Rural dwellers, particularly young rural dwellers who have low incomes, face a real problem in accessing the housing market.
The consequence is that someone on such an income could probably afford housing in 50 per cent. of urban wards, but in only 28 per cent. of rural wards and 2 per cent. of rural wards in the south-east. Some 45 per cent. of newly formed households cannot afford to set up home in the ward in which they currently live. It is also important to note that the public sector is not compensating for market sector failure. There was a 22 per cent. increase in urban affordable housing provision, but only a 3 per cent. increase in rural areas between 2001 and 2005, and only 5 per cent. of houses are social housing in rural areas, compared with a national average of just over 23 per cent. Those figures spell out the stark reality for people who are looking for entry into the housing market in rural areas. There are problems of market access not only in Nottinghamshire but across the south, and particularly in the south-west.
What is to be done? Clearly we need to build a lot more affordable housing, not only in market towns—important as that is—but in villages of less than 10,000. They make up 19 per cent. of the population but receive only 10 per cent. of Housing Corporation grants. The commission has calculated how many new homes will be necessary and suggests that 11,000 new affordable homes will be needed in rural areas each year, which would be made up of 7,600 for rent and 3,200 for low-cost shared ownership. No one doubts that that is a big task, but the commission’s recommendations are compelling. We are taking those ideas forward, but we should do so much more firmly.
Let me run through some of the ideas. First, there needs to be a better analysis of rural housing need. Our current methodology is not as robust as one might want. There needs to be a debate, starting in the locality through parish councils and in local authorities, to a regional and Government level, about how we calculate housing figures, what we really need and what the timetable is for delivering those figures.
I am particularly keen to involve regional spatial strategies in the process. The strategies of most regional planning forums are now well under way. We could consider at an early stage what provision and recommendation those spatial strategies make for rural housing. Some strategies acknowledge the need, but some do not. There are some early gains to be made in this area.
I am a great believer in planning. Planning is a Labour concept—a socialist concept—and we should aspire to a planned, spatial structure. We should not be afraid of that, despite the waves in the water at the moment. I am keen for local authorities to introduce plans for rural housing through their local development frameworks. The exceptions policy has served us well up to now, but by itself it is not sufficient. In the new local development frameworks, local authorities need to identify sites for housing. The threshold for affordable housing in new developments needs to be brought down.
We need to revise some planning policies. It is not possible at present to convert outbuildings to housing on many farms in rural areas. We need to consider that matter closely. Last week I visited Beecroft farm in Bulcote, Nottinghamshire, where there was once a big piggery where pigs were fed on swill. However, that business has gone and the buildings are decrepit and decaying. In effect, it is a brownfield site, but our current policy guidance does not allow us to convert the buildings to housing. We should revisit that guidance.
The hon. Gentleman is making an interesting point in arguing that planning has socialist origins. Having said that, does he not agree that planning appears to be fuelled more by greed than need and that when local planning authorities pass permissions—particularly unfettered permissions for housing development in rural areas—they effectively give away lottery sums to landowners? Does he agree that we need to ensure that the planning system in rural areas should meet the need for affordable housing, not stuff the pockets of people who happen to be lucky enough to have developable sites?
I am not always sure that greed drives the planning process—clearly, landowners want to maximise the benefit of their land—but the hon. Gentleman is right that, through their local plans, local authorities are in a position to drive affordable housing. That is the commission’s view and mine, too. I hope that the Minister will continue along that line. Planning policy guidance is already being revised. There are encouraging movements in respect of planning policy statement 3 that will help affordable housing.
I have talked about the need to know how much housing we require and to use the planning process. However, it is also important to retain the existing stock. One can argue for new housing, but there is a strong case to revisit the right to buy in rural areas where public housing is in low supply. I welcome the movement on staircasing in rural areas, so that shared equity can be released—that is a step in the right direction—but if we are concerned about affordable housing, we must maintain the current stock.
We need to move towards financing public housing—affordable housing—in rural areas. I am pleased that in May the Housing Corporation announced an extra £230 million to provide 6,000 new houses in rural areas between 2006 and 2008. That decision recognises that there is a problem and progress has to be made. If the commission is right that we need to create 11,000 new houses each year in rural areas, we need to revisit the allocation from the Housing Corporation and at least double it.
I know—I am sure that the Minister will tell me—that this is a matter for the spending review. We need more money for rural housing. The Government have set up a commission to recommend the way forward and the Minister has considered the commission’s proposals. I hope that colleagues throughout the Government and in the Treasury will reconsider, because given the scale of the market failure, we need to provide more public support for rural housing.
We need to do many more things. Let me canter quickly through some of the things that the commission mentioned. We must continue to look at the public ownership of land in rural areas. The Ministry of Defence and the national health service, for example, are big landowners. A review is under way, but we need to make more progress so that we can define land in public ownership for rural housing. We must secure funding for rural housing enablers, which do tremendous work in bringing together proposals throughout the country, although their funding is not secure. We need to resolve that issue.
If we are to combat the elements who do not want to see more affordable housing in rural areas, we must advance high-quality design proposals that are sensitive to the environment. We need to consider new models of delivery and ownership, such as community land trusts and land-swap levies. We must also have a sensible discussion about second homes. Some people argue strongly that second homes are the problem and getting rid of them is the solution, but that is not my perception. I accept that in parts of the countryside, particularly the south-west and the national parks, second homes are an issue. However, we are considering more systematic market failure.
I look forward to reading the Lyons report at the end of the year, because I presume that Sir Michael Lyons will comment on taxing second homes in the countryside. Second homes are a problem, but we must not be seduced into thinking that it is the major problem; the issue is much wider than that.
It is a major issue in west Cornwall and the Isles of Scilly, which I represent. Does the hon. Gentleman share my concern that not only is it a problem, but it sets the tone for the market price of housing, which is way out of reach of people on the lowest incomes in the country, as is the case in my part of the world? Does he share my concern that in an interview in the Financial Times last week, the Minister said that the Government did not intend to follow the Affordable Rural Housing Commission’s recommendation in that respect?
I look forward to hearing what the Minister has to say about the commission’s recommendation and I shall consider her comments closely.
I accept that second homes are raising house prices to an exceptional level in attractive parts of the countryside like the hon. Gentleman’s, but affordable housing in rural areas is a much wider problem and is not just connected with second homes.
Real leadership is necessary to deliver affordable housing in rural areas. We are not talking about concreting over the countryside. The commission’s proposals would mean that to achieve its targets in population wards of 5,000, we are talking about six houses per community. I believe that that is achievable and sustainable. We must move away from a notion of sustainability in the countryside that focuses solely on landscape and environmental issues. We want a living, changing countryside, a countryside in which investment can take place, and in which investment in new housing is investment in a new future for the countryside. We have heard talk in this Chamber today about the post office network. There are concerns about small village schools, shops, pubs and bus services in rural areas. We must move towards younger, more vibrant and more sustainable villages in our countryside.
The commission has set out an agenda. I do not want it to be an agenda for discussion; I want it to be an agenda for change. If we are serious about a living, working countryside, we must take up the commission’s challenge and make the change. I am confident that the Government, having set up the commission, will look closely at its recommendation, follow some of its policy advice and introduce tools and measures for change.
I congratulate the hon. Member for Sherwood (Paddy Tipping) on securing the debate, which is on an extremely important subject. The lack of affordable housing used to be called the hidden problem in rural areas. It is now much less hidden due to the efforts of the hon. Gentleman and others in this Chamber and outside it.
My constituency, rather like that of the hon. Member for St. Ives (Andrew George), is a south-west constituency. According to figures just published, Torridge is the worst out of 408 English local authorities in terms of wages, and wages in West Devon are almost as bad. The published figures for Torridge and West Devon show that the average house price in Torridge is £186,000, and the average house price in West Devon is £235,000. That is 10.6 times average earnings in Torridge and 9.3 times average earnings in West Devon. No doubt the experience of many hon. Members on both sides of the House who represent rural areas is that their surgeries are filled increasingly with young people, families and single people who find it almost impossible to find a decent place in which to live.
That is why I welcome the Affordable Rural Housing Commission’s report. I agree with much of it. I have questions about parts of it, but there is no doubt that when I began to examine this problem and spoke to the chief executives and the planning and the housing departments of the local authorities, I found that the planning system was centre stage as the main obstacle to the development that both those authorities wanted to carry out. I congratulate West Devon borough council on its pioneering approach in this area. It is doing wonderful things and has recently produced a report that prioritises affordable housing in the villages as one of its main targets and objectives. That must be a good precedent; I hope that it will be repeated.
The planning system, however, is a major problem, and I want to raise with the Minister a specific example from my constituency of a pioneering, innovative scheme, developed by the community. A village in my constituency called High Bickington, which has received some national attention lately, formed a community property trust. The Minister may be familiar with the story. The village needed a new school. The Victorian cramped conditions in which the children are taught have been obviously inadequate for a long time, but instead of deciding to address only the educational need of the village, those in the village who were concerned about their community, of whom there were many, devised a plan that would address not only the need for a new school, but community woodland, affordable housing and the important question—I agree with the hon. Member for Sherwood—of design. If people are to accept the development of their villages, they must be satisfied that the design quality is high enough for them to feel easy and comfortable about the expansion in population and the expansion in building that it requires.
The community property trust in High Bickington worked for several years and many hundreds of hours—with the assistance, I must say, of some Government money—to devise a plan. It was recognised from the outset that that would not be within the local development plan. It was an innovative departure; it involved pioneering ideas. Several Ministers visited the scheme and described it as inspirational. So did the Prince of Wales. The trust’s plans for affordable housing were exceptionally good ideas. It devised a scheme whereby those whom it had identified already to occupy the affordable homes that it was building would receive back, when they handed over the tenancy to a new family, a sum of money that represented a proportion of the rent above cost that they had paid to the trust. They would pay their rent and, at the end of their tenancy, the trust would calculate how much it had cost it to maintain the building, and over and above that the departing tenants would receive a sum of money that was small but sufficient to enable them possibly to move on to a shared equity scheme or some other form of house ownership. Those ideas were immensely precious and valuable.
The trust submitted its application to Torridge district council, but that council was obliged, because the application departed from the local plan, to pass it to the Government office for the south-west. There it languished for many months, until eventually a public inquiry was held and the planning inspector decided to recommend against it on the ground that it departed from the local plan. Imagine the disappointment of those hundreds of villagers and members of the local community who had received encouragement from the Government—indeed, a senior Minister had visited and said that the scheme was inspirational—only to be confronted with devastating failure. That is despite their having received Government money for a scheme—I must make this clear to the Minister—that would always have departed from the local plan.
This is a case, I would submit, of the right hand not knowing what the left is doing. The Minister will know that I have written to the Secretary of State, raising the case and asking for the Secretary of State’s comments. I hope that she will feel able to comment, because there are still hundreds of devastated members of the local community, who have found that when they take the initiative and show the drive and energy necessary to devise a solution, they come up against the planning system. They had identified the local families that would be involved. They had measured carefully the local need. When they take into their own hands the means by which to produce local and radical solutions to the problems that they face, they come up against the rock of bureaucracy and the planning system.
I respectfully suggest that it is vital that the planning system be the subject, from top to bottom, of a radical review as to whether it favours the development of rural affordable housing. Only if we take that concerted approach and have a radical review of the planning system in rural areas—I agree with Elinor Goodman and the commission—can we conceivably begin to address the problem that we face.
The hon. Member for Sherwood talked about the need for imagination. The other day, I was with a representative of South West Water—not a very popular company, I have to say, in the areas that I and the hon. Member for North Cornwall (Mr. Rogerson) represent. I was being told about a plan that South West Water had and I was shown a map. I invite the other hon. Gentlemen here from constituencies in the south-west to make an application for the same map, because it is extremely interesting. Across the map of the south-west—across Devon and Cornwall—there were literally hundreds of dots, which showed brownfield sites. They were disused water processing or other water sites. Many of them were on the edges of villages and would be ideal for the development of two or three houses. There were about 100 such sites in my constituency alone. At least some of those would present potential opportunities for the development of affordable housing.
The company was telling me that it would like to make the land available for the purposes of affordable housing. It might be difficult for it to develop it profitably and viably if it were not permitted at least one market-priced house, but it does not, as I understand it—some hon. Members may be sceptical—seek to make a substantial profit. It wants instead to cross-subsidise, by the production of, say, one market unit and two, three or four other affordable homes. If there are 100 such sites on the edges of villages in my constituency alone, I ask the House to reflect on what a difference they might make to the problem in my constituency and other constituencies in the south-west. As the hon. Member for Sherwood said, however, that requires will and leadership. It requires a coherent and joined-up approach, which is what currently seems to be lacking.
The hon. Gentleman mentioned farmers. There is no question that many farming families in my constituency would like to build a bungalow or put up a building for members of their own family on the farm, so as to be able to work the farm. However, the planning system makes that very difficult. The hoops that people must jump through and the hurdles that they must get over are extremely rigorous. It should not be so, particularly if they are willing to have an agricultural tie on any such building. I agree with the hon. Gentleman that barns and redundant outbuildings are also wonderful opportunities to develop affordable housing. However—and I say this merely to enter a caution—it might not be profitable to do that unless at the same time there was permission to provide perhaps one market-price unit for the purposes of cross-subsidy.
I shall conclude—I know that other hon. Members want to speak—with an appeal to the Minister. It is critical that the Government should show that what we are debating is a crucial priority within their rural housing policy. It is vital that instead of a regional spatial strategy that is always urban-focused in relation to development, we should have a specific mainstream policy that will allow villages to breathe. I know that there is concern about nimbyism. There is no doubt that people who retire to villages or come to live in them at other times feel uncomfortable about what they may see as a threat to the precious way of life in which they have invested, which was the reason they went there. It is not only retired people or those who have arrived lately who feel that way. It is precisely those concerns that can, I believe, be tackled by the concern for design that the hon. Gentleman has spoken about.
I ask the Minister seriously to consider the sort of radical reform of the planning system, or at least the kind of leadership and will, that the Affordable Rural Housing Commission has spoken about. High Bickington was a classic example of a community taking its future into its own hands. However, it was confronted by bureaucracy and astonishing Government blindness to the effects of their own policy. That policy both paid for the development of the plan and then brought about its defeat, because of the objection, which had been apparent throughout the three or more years of the scheme’s development period, that it would mean departing from the local plan. We must have greater imagination and flexibility, and I urge the Minister to take that message back. Nothing is more important in the countryside at the moment than genuinely and urgently tackling the housing problem.
I apologise, Mrs. Humble, for the fact that you must listen to me again, but, as I said in the debate on post offices and community services, the debates this morning have a unified theme. They are not only about how we deliver services but about how people can live in the countryside and use them.
I thank my hon. Friend the Member for Sherwood (Paddy Tipping) for securing a debate on this issue now, and for explaining it so carefully and clearly, with numbers that even I can understand, to show the depth of the current crisis and why we must do something about it. I am pleased to follow the hon. and learned Member for Torridge and West Devon (Mr. Cox), if for no other reason than that the Minister may hear his plaintive cry for the High Bickington scheme. It is a brilliant scheme and one that needs to be moved forward. I know that planning rules exist, but I have always believed that rules are there to be broken if that would lead to a better outcome; we sometimes have a negative way of turning things down for reasons that are difficult to understand.
As my hon. Friend the Member for Sherwood would expect me to say, one of the pleas that needs to be made is for progress with the idea of community land trusts, which feature prominently in the report. I hope that the Government will sign up to the report lock, stock and barrel. It is really very good and well written, and it is possible to read it and think, “This makes sense.” Nothing less is to be expected from a body chaired by Elinor Goodman, the political journalist. If she cannot put the information across, no one can. However, its quality is due also to other members of the commission, including our late lamented colleague Peter Bradley, and Mark Shucksmith, who probably understands more about rural communities than most of us would ever claim to. There are people of real importance involved, and I hope that the Minister is presently not just dwelling on the report but considering the points for action.
The report is a road map that will take us forward. It contains ideas whose time has come, among which are community land trusts. I shall quickly plug the Cashes Green scheme in my community, which receives a mention in the report. It is described as a model, but things seem to be somewhat more complicated than they might. We need to unravel the complexities and recognise that such schemes are a way to move forward in rural communities such as High Bickington. The problem is often about locking the land away. If it is possible to control the land, the equity value that can be taken from it, and which people can share in, provides people with a reward. The important things are the land, its ownership, and communalising that.
I am not here to have a dig at the Minister, but perhaps we can clear some of the history of local authority ownership of housing out the way. The Government have a brilliant record on the decent homes standard. We do not congratulate ourselves enough, but we are driving that forward and it is almost certain that we shall reach our target by 2010. I feel slightly argumentative about who should own the property in question, but I do not want to get bogged down in that. The most important thing is to recognise that social ownership of housing is a key factor.
The Minister was at a seminar that I attended a couple of weeks ago. It was interesting, because we examined some of the complexities in models of social ownership across the domain, but particularly in rural areas. I made the point that local authorities have a key role to play and that leadership is sometimes lacking. It is too easy to abdicate responsibility and blame the planning process. I expect local authorities to be determined, and to make it clear that they will keep coming back until they deliver the schemes in villages and market towns as well as urban areas. That is their responsibility and what they are elected to do. They must sometimes take on the nimbies. This is about pointing out to people—this is linked to the previous debate—that there will be no services in rural Britain unless people of different ages, classes and, dare I say it, ethnic backgrounds move in to regenerate those communities. That will have to happen and will have to be encouraged.
I have two more points to make; I know that other hon. Members want to contribute. I hope that we can agree across the parties that the commission is brilliant and is worthy of full support, and that this is simply a question of pushing the Government even further in trying to get more resources going in faster.
I was interested to receive a paper from Shelter on this matter. Too often, we think of homelessness as an urban and city problem. Purely by chance, I was talking to a couple of people from a Christian group in Stroud called Marah, which was set up four or five years ago. Its initial aim was simply to offer a warm meal in the day, and it now operates on at least three days a week, providing meals for people who need them. One would think that we were talking about two or three people, but the group regularly feeds 70 people, 50 of whom it believes to be genuinely homeless, although not necessarily on the street. In rural areas there can be a lot of sofa surfing and people are often able to find residences for a while. Many such people have dependency problems with alcohol and drugs and believe that they are forgotten. Indeed, there is a great deal of evidence that they are. Inevitably, we are talking about people who can speak for themselves and aspire to some form of ownership or look to get some form of social rent, but let us remember that there are people below that level in rural areas—as you well know, Mrs. Humble—as well as in more urban settings.
My next point is, perhaps, sometimes forgotten. One of the key reasons for providing accommodation in rural areas is because a lot of jobs are being created in such areas at the moment, but that cannot work if there is no housing for people to live and work there. This is about squaring a circle: we must be cleverer in market towns and villages. We must recognise that if we are to provide for our older people, we need the people who can provide such care to live and work locally, or that will not happen. In the Cotswolds, and coming into my constituency, there is a care problem. People simply are not able to live and work there because they cannot afford to travel from Gloucester or Cheltenham. That is a real problem.
My hon. Friend makes an extremely interesting point. In urban areas, we face demand pressures from people who are coming from the rural hinterland because they cannot afford to live in the market towns and villages. Indeed, they are the very people who we need to take up the employment that is now in those areas. In Plymouth, we now have the third-highest-rising house prices in the country, and that is partly because of the pressure on our young people to leave towns and villages and go to urban areas where they can afford housing.
I thank my hon. Friend for her comments, because I have always believed that rural and urban problems are not separate, but interlinked. Problems in different areas may have different gradations and stresses, but they are essentially the same problems.
We should not isolate housing from either service provision, which depends on people coming and enhancing vibrancy in communities, or employment. It is a myth that people want to live in rural areas and commute miles and miles. If they do, they are wrong, and they may have to take slightly less well-paid jobs so that their quality of life will improve, which is, of course, why they moved to a rural area in the first place. The sustainability which is so vital, and for which we must all change our lifestyles, can be achieved only if people recognise that they have to make some sacrifices. If they want to live in those communities, they must work more locally. The good news is that, with the rolling out of the internet, plenty of jobs are being created in the service sector in rural areas; we simply need the houses there for people to live in so that they can do those jobs.
It is, as ever, a pleasure to follow the hon. Member for Stroud (Mr. Drew), who speaks with great articulacy on issues concerning rural communities, as well as international issues. He is certainly known as a rural champion in the House.
I congratulate the hon. Member for Sherwood (Paddy Tipping) on having secured this important debate and on having set out so accurately the issues before us today. I am keen to hear the Minister’s response to his points, and will therefore do my best to keep my remarks as brief as possible to allow the winding-up speakers to give the Minister as long as possible to address the relevant issues.
I congratulate also the hon. and learned Member for Torridge and West Devon (Mr. Cox) on his speech. We are relatively near neighbours, although he represents an English seat and I a Cornish one. Our constituencies are not many miles apart, and we therefore share a geographical connection. Our constituencies are both affected by many of the same issues.
I return to a point that I mentioned in my intervention on the hon. Member for Sherwood. The Government’s figures on second home ownership clearly show that Cornwall has by far the highest level, proportionately, of second homes anywhere in the country, followed by Cumbria, Dorset, Norfolk, Devon and East Sussex. This is not simply about the politics of envy. I still count among my friends many people who own second homes in my constituency, despite all that I say about the impact that they have on the local community. This is a question of the practical management of the existing housing stock and the impact that it has on local people.
Given the way in which the housing market works in areas such as mine in west Cornwall and the Isles of Scilly, it is almost as though local people—Cornish folk—do not have any right to live there. I can speak only about my area, although I know a little about the housing market in other parts of the country, having worked as a quasi-rural enabler in Nottinghamshire, Devon and elsewhere. The only options available to local people are to leave the area or live on low-cost reservations. Surely that is not the way forward if we are to have a housing supply that provides any sort of equity for the community who have been living there.
We know that the market is dysfunctional and that house prices are high, having doubled in the past five years in Cornwall. Figures on this are regularly trotted out, and I could trot out more, but I will not, which show clearly that the bottom rung of the housing ladder is now well beyond the reach of local people. Last year, I undertook a survey of local estate agents, which showed that twice as many properties in my constituency were sold to second-home buyers as to first-time buyers. I was surprised that any properties had been sold to first-time buyers, because I could not believe that any properties in my constituency were any longer affordable to local people. They must have benefited from the recent loss of an aunt or other rich relative. It is certainly not possible, on local wages, to get on to even the bottom rung of the housing ladder.
In addition, the public rented sector is extremely small; it is well below 10 per cent. of the housing stock, compared with 15, 16 or 20 per cent. in many urban areas. The private rented sector is smaller still. In many urban areas, such as London, the private rented sector might be expensive, but it is relatively healthy. The rents chargeable on private rented properties in my area are well in excess of anything that the housing benefit system is prepared to offer. Local reference rents are entirely unrealistic, compared with what local people are charged in the market. As a result, the situation is extremely difficult.
The hon. Member for Stroud referred to the problem of homelessness, but where does the problem go? It does not go on to the streets, but into quarries, caravans at the backs of farms, garages and garden sheds on the Isles of Scilly. People do not sleep on park benches quite so much but they do live in lichgates outside churches and elsewhere. Yesterday, in the Salvation Army hall in Penzance, I was a panel member at a Cornwall independent poverty forum hearing, which was organised by the diocese of Truro. Local young single men told us about people who were earning a living, but who were unable to afford even to rent a flat. We are talking not about people who are unemployed, but about people who are actually earning and who cannot find a place to live. That is happening in west Cornwall and, indeed, on the Isles of Scilly. That is the serious nature of the problem that we face.
Of course, simply building homes is not the answer. People talk rather blithely about the Kate Barker report and about the thousands of houses that are needed to meet housing need in rural areas, but that is a simplistic response, which will not address the problem. Over the past 30 years, Cornwall has had one of the fastest growing populations in the country, as well as the number of houses that have been built as a proportion of the overall housing supply. However, it has one of the worst housing problems—if not the worst housing problem—in the country, so simply building houses is not the answer.
Although I think that the planning system was set up with entirely honourable intentions, it deals, sadly, only with the supply side of the demand/supply equation, as I said in an intervention on the hon. Member for Sherwood. It must be recognised that it is creating scarcity on the supply side, which affects the market value of the land on which it allows people to build. Sadly, human frailties being what they are, that means that the system is fuelled by greed, rather than need. Landowners go to extreme lengths to persuade the local planning committee that they must have permission to build on their land. They know that getting that permission will turn one acre of agricultural land, which might be worth about £3,000, into something that could be worth £500,000 or more. Planning committees are, in effect, writing cheques for lottery sums for landowners, and we end up with people not having to work terribly hard to gain a great deal of income.
What does that do for local housing need? The answer is absolutely nothing if there is no affordable element. Even if one uses the planning gain approach, which I describe as the planning bribe approach, and builds some affordable housing, that still multiplies the price of the land to a large extent. We must therefore address the need to construct a new rung on the housing ladder. The intermediate market is not there and it needs to be constructed. Shared equity, mutual housing and other forms of property semi-ownership clearly need to be created.
In an interview in the Financial Times on 3 July—I think that the Minister knows my views about it—she said that second home ownership was
“not a significant factor affecting affordability”.
Well, it is in an area such as mine and in many other parts of the country. It might not be a significant factor affecting affordability throughout the country, but in areas where it is an issue, it is very significant; it sets the tone for the market price and has a tremendous impact.
There are only two ways to go. One is to make second home ownership fiscally less attractive. The Liberal Democrat tax commission has made it publicly known that we are looking at adding further taxes to capital gains tax to discourage second home ownership in certain circumstances. The other way is through the planning system. The knotty problem has always been how to define second homes, and I think that it can be defined through the taxation system. Once we agree on the mechanism that we use to define it, we can describe second home ownership as a separate and quite distinct use from permanent occupation. Under the use classes order, such use would be subject to a planning application that gave the local authority the opportunity to constrain the number or proportion of second and holiday homes in communities where the scarcity of properties had caused housing problems.
There are therefore two approaches to addressing the issue of affordability. I should say in parenthesis that my comments on second home ownership and planning should apply only to the lifetime of the occupancy; otherwise, we would have a stupid situation, in which we would all be applying to change our properties from first to second home use because of the premium market value that would apply to the property after the change.
My final point relates to the intermediate market. Clearly, that is the direction in which Government policy needs to go in rural areas where the mismatch between very low earnings and very high house prices is creating such tremendous problems. Although this sounds counterintuitive, one of the best ways to make progress would be to start by saying that there will be no further development in rural areas, but that, as an exception, we will use planning policy statement 3 to constrain land prices. Land prices are the big constraint on achieving any sort of affordable housing.
I should like to echo the sentiments of other hon. Members in paying tribute to the hon. Member for Sherwood (Paddy Tipping) for securing this debate, which is particularly important and timely, given that the Affordable Rural Housing Commission report, to which he and other hon. Members referred, was published some weeks ago, and we are now moving towards the recess, so hon. Members will have a valuable chance to comment on it and seek indications from the Minister as to how the Government intend to respond.
The hon. Gentleman gave a clear indication of the size and nature of the problem that is facing communities in rural areas. The housing dimension interacts with other problems in rural areas where, in the past, poverty has been concealed. The report by the Commission for Rural Communities highlights the fact that one in five people in rural areas is living in poverty, and seeks to show that these issues are interrelated and that the unaffordability of housing has a great impact on people’s ability to exist on the income that they receive.
In many cases, the examples of poverty do not show up because they are in small pockets in what would seem to be wealthier communities. That reflects the need for housing. As the hon. Gentleman said, we are not talking about huge developments in villages; we are talking about the need for one or two, or perhaps five to 10, houses in small villages and the fact that they would have a huge impact in tackling the problem of unaffordability.
The problem is getting worse in that the disparity between incomes and house prices is growing. The nature of the right to buy has meant that many villages now do not have any, or have very few, homes that are still available in the conventional social rented sector. People are forced either into staying on longer with extended family, if they still have family in those communities, or into relocating to other parts of the country or to urban areas, as we heard in the contribution from the hon. Member for Stroud (Mr. Drew) and the intervention by the hon. Member for Plymouth, Devonport (Alison Seabeck).
The consequences of the shortage of affordable housing in rural areas include overcrowding, where young adults, young couples and so on are forced to stay on longer in the family home. That can have health implications. I have seen in my surgery, as other hon. Members will have in theirs, the genuine anguish that exists in families and the impact on children who are growing up in inadequate housing. There can be problems whereby relationships then break up because they cannot cope with the strain. I saw a recent example where the number of children in a family was not quite enough to secure a banding that would have allowed the local authority to prioritise this particular application under the homefinder system and choice-based letting. The pressure of the circumstances in which that family was living was great. The couple broke up and a new dimension was added to the problems that they were experiencing.
The issue has effects not just on people as individuals and as families, but on the rural economy. If people cannot afford to live in rural areas but they still work there, they need to travel back into those areas, as the hon. Member for Stroud pointed out. We hear about sustainable development being that in the larger towns and on their edges, but that is not the case, because people are being forced to commute, almost invariably by car, back into the rural areas, and that has an effect.
The issue has an effect on the rural economy in terms of local shops and businesses. If younger families are not able to exist and to live in rural areas, those business will be affected. In my constituency and those of many other hon. Members in rural areas, small schools are a valuable part of village life. They, too, are under threat. We are now entering a period in which the change in the demographics might mean that a number of small schools will face problems. That can only be exacerbated by the lack of affordable housing in rural areas.
The break-up of extended families undermines the social network that exists to ensure that where problems are experienced relatives are on hand to lend a helping hand. In effect, some rural villages, particularly in the south-east, are becoming dormitories and commuter villages.
As with all problems of this nature, the causes are complex; they are never straightforward. It is clear that one dimension is the lack of supply. We need to build more. The report that I mentioned discusses—Shelter has supported this, as we have heard—the need for about 11,000 affordable homes a year to start to meet the need. I understand that the Housing Corporation has set aside the funding for about 3,000, so there is a huge gap to be made up.
We also need to examine the issue of planning. The contribution from the hon. and learned Member for Torridge and West Devon (Mr. Cox) was timely, and he gave a heartbreaking example of how a community’s hopes had been raised, people had been invited to participate in coming up with innovative solutions and then the existing system had failed them at a crucial juncture. I look forward to hearing the Minister’s comments on the issues he raised.
Does my hon. Friend agree that part of the planning issue derives from a lack of flexibility for local communities to identify their own particular problems and to find their own solutions? Does he agree that the Sustainable Communities Bill, which has the support of more than half the House in an early-day motion, might be one mechanism to allow local communities to identify their own problems and solutions, and to get Government support to help them overcome those problems? We could overcome the problem of the unintended consequences of national policy on the local community.
I thank my hon. Friend for her contribution and pay tribute to her work in support of the Sustainable Communities Bill. I am a signatory to that early-day motion and have spoken at a public meeting in my constituency—I know other hon. Members will have done the same in their constituencies—in support of the Bill’s concept. The Bill will make a valuable contribution to allowing local communities to take control of these issues, come up with innovative solutions and, hopefully, put them into practice; unfortunately, I have not been able to do so thus far.
There are also problems in respect of the new regional spatial strategy, as the hon. Member for Sherwood pointed out. The pressure to examine sustainability in terms of public transport infrastructure, travel-to-work areas and so on is having the effect of encouraging regional spatial strategies to focus new developments almost completely within larger settlements or on their edges—on green belt land. We have heard that there are examples of brownfield sites in the rural areas, and we need to be examining those as well. I hope that the Minister will reassure us that the regional spatial strategy process, as it moves forward, will also include more support for small, appropriate schemes in smaller towns and villages.
The problem is also caused by the issue of land pricing. My hon. Friend the Member for St. Ives (Andrew George) made a valuable contribution when he spoke about his area’s experiences of development, the attitude of some landowners to the planning process and how their land might be used to meet—or not to meet—the problems that their community is facing.
Local councils do not always insist on enough affordable housing. There are examples of councils that have taken a tougher line on the matter and I hope that we will encourage councils to take the opportunities that exist to deal with the problem. There are a number of indications in the Commission’s report of where it feels that Government policy could expand that area to give more opportunities to local authorities to tackle these problems. We also need to be aware that some guidelines could be clearer and the message could be stronger for local authorities to take advantage of existing possibilities.
I will touch on the crucial issue of second homes as a cause, which my hon. Friend raised. We have heard about the league table that shows which counties that is a particular problem in, and I speak not just as a member of my party’s team of spokespeople on this issue but as a Member of Parliament for a Cornwall constituency. In North Cornwall it is a huge problem. The parish of Crantoch in my constituency wrote to all the parishes in Cornwall to ask them to come up with a figure for the number of second homes in their parishes. Some appalling statistics came back from some parishes and showed the distortion. I believe that in Manaccan in my hon. Friend’s constituency the figure was 80 per cent. That is clearly unsustainable. Sustainability in the round is vital.
For solutions I refer hon. Members to South Shropshire where councils have taken a robust line with developers to ensure every opportunity of providing as many affordable homes as possible. We must look at methods of providing council homes, whether through the taxation system or, more helpfully, a planning category for second homes. The Government must make every effort in their spending commitments to ensure that additional money is provided for more affordable rural housing schemes.
As we are straying into planning policy, Mr. Hood, I declare an interest as the director of a property and building company.
I congratulate the hon. Member for Sherwood (Paddy Tipping) on the sensible and measured way in which he introduced the debate. With housing matters, it is usually easier to identify the problems than to identify the solutions, but, unusually for a debate in this place, a number of good ideas have come out of our debate today. Some have come from the commission’s work and some from hon. Members’ experience, which proves that there are solutions. However, I am not sure that they are solutions from the centre; I think that they are solutions that must be delivered in those communities with the greatest difficulties.
I shall set the context. The number of affordable homes being built has fallen over the past half a dozen years. In 1996-97, 32,489 were built and in 2004-05, 22,823 were built. Although the trend is now upward, we did not expect that fall when a left-wing Government were elected. There has also been a substantial collapse in the number of first-time buyers. There were 503,000 in 1997, which fell to 320,000 in 2005. Some of that fall is due to changes in the housing market and some to lifestyle changes. Some people want to do their own thing in Kathmandu and to buy a property in their 30s rather than in their 20s, which was perhaps the case in the 1980s. Nevertheless, there is a real problem.
The hon. Member for Sherwood set out clearly the problems in rural areas. A statistic that I saw recently was that in 2003 37 per cent. of people in rural areas paid more than half their income in mortgage payments whereas only 26 per cent. in urban areas did so. Some of that is a feature of lower wage levels, but certainly people are willing to gear up to get their little corner of England. The result is that there are real burdens. Those who were born and grew up in an area face substantial competition and difficulties.
I feel that I should say something nice about second home owners, partly because of the tone of the debate. I do not consider them necessarily negative, negative, negative. I understand what Cornwall Members are saying. We have the same problems in Dorset, and they cause particular housing problems. The hon. Member for St. Ives (Andrew George) mentioned some of the problems, not least definition. Second home owners are often people who have grown up in an area but have moved away to work and intend to return when they retire. They inject money into the local economy. Second homes are sometimes rented to tourists and tourism is very important in the south-west.
It is interesting to note the personnel who have taken part in the debate. Although they have changed a little during the past hour and a half, two thirds of the hon. Members in the Chamber are from the south-west of England. If one put a pin in the area with the real pressure, it would be the south-west.
I am interested in what the hon. Gentleman is saying about second homes. With the benefit of hindsight, does he think that it was a good or bad idea to spend hundreds of millions of pounds through the council tax subsidy under Conservative legislation subsidising wealthy people to have second homes when so many thousands of people in areas like mine cannot afford a first home?
That has changed now, and those people pay 90 per cent. of the council tax. My party has accepted that, but when second homes are sold they attract capital gains tax, which first homes do not. Most Members of Parliament have a second home for their work and face capital gains tax on either their property in London or their property in their constituency. There are fiscal disincentives. Even if a definition could be found, I am not sure whether two housing markets could be created. That is possible in the Channel Islands, which have special status, but I am not sure that it is possible here.
To return to the tenor of the debate, if we focus heavily on second home owners, we miss the point, which is finding land for development. The key point that was raised by my hon. and learned Friend the Member for Torridge and West Devon (Mr. Cox) and the hon. Members for Sherwood and for Stroud (Mr. Drew) is the difficulty of finding suitable sites for affordable homes. Most of my experience of rural areas comes from when I was a district and county councillor in Wiltshire. I was always surprised that growth was pushed into towns and that the villages had lines drawn around them that were so fierce—they sometimes went through people’s gardens—that it was almost impossible to have any organic growth.
The hon. Member for Stroud made an important point about services and one factor is that unless there is some organic growth in villages, a proper cross-section of people and ages is not retained and services such as post offices, schools and rural transport are not provided as the population becomes slightly more elderly and perhaps slightly better off, so the way in which the area grows is distorted. The growth factor is important.
On the question of farms, in my experience there are sometimes opportunities for both light industrial use and housing growth on farms on the edge of villages, but that tends to create strong emotions. When I was leader of a district council, we made proposals for certain villages to become local centres to allow more growth. I have never been faced with such a large avalanche of letters and protests from people in those villages who did not want them to grow. The difficulties are understandable.
The solution is to give a lot more flexibility to local planners. If local people are given the ability to vary local planning without an inspector overruling them, they are in much the best position to create local solutions to local problems. I know numerous examples of district and parish councils signing up to schemes, but being overruled by national planning policy. I hope that when the Minister looks at planning policy statement 3 she will allow a degree of flexibility for housing in rural areas.
We heard that 11,000 units are needed, which is not an awful lot, and it should not be beyond the wit of people in rural communities to provide that. We have heard today of water companies, the Ministry of Defence and a number of public corporations that have sites in rural areas that could be adjusted and used. The local solution is the best solution and some sensible ideas have come up today. I understand the strong passions and emotions about the second home argument, but I do not think that it is the key. The key argument is to provide suitable sites for land so that our villages can grow more organically.
Design is terribly important. Sometimes, the best way of getting the design that one wants is to control the land, which Prince Charles has often done, particularly with his developments in places such as Poundbury in Dorset. His control of the land allowed him to do rather more with the development. We must consider giving local planning committees more flexibility on design. I am not sure that we want all housing to look the same, whether it is in Warrington, Basingstoke or Plymouth. Local materials and the local look not only add diversity but can make our country look more attractive.
I congratulate the hon. Member for Sherwood (Paddy Tipping) on securing the debate, and on raising the issue of the Affordable Rural Housing Commission report, which is widely agreed to be extremely important and weighty. The Government added to that report. We set up the commission precisely because we were concerned about affordability pressures in rural areas. Such areas face all sorts of additional challenges and wider issues to do with affordability. We are looking to develop some of the recommendations and to take forward the commission’s work. I shall try to give hon. Members a flavour of some of the work now under way.
However, we recognise that there is a wider problem of affordability that affects both rural and urban areas; my hon. Friend the Member for Sherwood is right about that. Housing supply is simply not keeping up with housing demand. More than 200,000 new households are formed each year, but only about 160,000 new homes are built a year. The level of house building is significantly lower than it was, say, 30 years ago. As long as there is that gap between new household formation and the number of homes built, there will be growing pressures on affordability across the country in future. Our assessment and research suggests that if we simply carry on at the current rate of house building, over the next 20 years the proportion of 30-year-old couples able to afford their own home is likely to drop from more than 50 per cent. to nearer 30 per cent. That is simply unsustainable, given the aspirations of first-time buyers and the next generation.
My hon. Friend is right that rural areas face particular problems, and hon. Members raised a series of issues. Problems can include restrictions on areas in which homes can be built, the planning system, and the quite proper need to protect the countryside in rural areas. It is important to recognise that there can be different levels of wages in rural areas; in particular, agricultural wages can be much lower. We also have to recognise that there are wide variations between rural communities. Small coalfield villages that face regeneration challenges are different to affluent commuter villages, which are different again to coastal villages. Rural areas will face very different challenges, and we should not make the mistake of assuming that there is a single answer for all rural areas.
Equally, we need to recognise the challenges set out in the Affordable Rural Housing Commission’s report. The commission challenged the approach to sustainability that was built into the planning system some time ago. Often, the well-intentioned response to the need to protect brownfield development and to ensure sustainable development in terms of transport, including public transport, has been to focus the vast majority of new development around big cities and towns. However, as the commission makes clear, the consequence is that some of the wider issues around sustainability that affect rural areas have not been considered.
Hon. Members have pointed out the challenges that result when young people cannot afford to buy homes in the villages and rural areas where they grew up. They move out, and local schools can become unsustainable as a result. Just as there is an ageing population, there can be ageing villages, as young people often cannot stay in the area because there are no homes for them to move into. The approach taken by the commission is right, and we need to consider the idea of the living, working, and changing countryside, as my hon. Friend said. That is why we have stated that we need to reform the approach through planning policy guidance, and through our new draft policy on planning for housing, planning policy statement 3. The commission welcomes our approach to PPS3, and says that it builds in the kind of flexibility that we need when approaching the subject of rural areas. We need to allow them to grow where necessary, and to respond to local demands.
The hon. and learned Member for Torridge and West Devon (Mr. Cox) mentioned a case in his constituency. He will be aware that I cannot comment on individual planning cases. I was not involved in the decision, and although I am aware of the case, he will know that I cannot comment on its details. However, I would like to address some of the broader issues linked to it. He asked a question that was really about whether there should be more flexibility for small sites in rural areas where needed housing could be developed. I agree that there should be, and that is exactly why PPS3 tries to incorporate that approach for the future.
The hon. and learned Gentleman asked, effectively, whether it should be easier to adapt to housing need and not to be bound by out-of-date local plans. I think that it should be easier to update local plans, and that is why we are changing the approach to planning to encourage local development frameworks. Aspects of such frameworks can be updated much more easily. Also, the change will mean that decision makers need not simply respond to decisions that may have been made years ago about the housing needed in a particular area, but could instead consider current need and market demand, and so could be more responsive to market approaches. That is our new approach as part of PPS3 and as part of the response to the Barker inquiry.
There are two ways for hon. Members who face such problems in their area to deal with the issue. First, they can think about what can be done to update local plans more rapidly and to take advantage of the changes that we have made to the broader planning system; secondly, they can consider how applications measure up against the new approach in PPS3. We hope to publish the final version of the planning policy statement later in the year; we have already published the draft for consultation. It is useful to compare planning applications that are currently coming through with the approach in the new guidance.
Hon. Members mentioned the need for shared ownership and social housing, which is an important subject. Predominantly rural districts account for about 23 per cent. of the population, and get about 21 per cent. of the social housing budget. My hon. Friend the Member for Sherwood mentioned smaller local areas. Some 19 per cent. of the population live in settlements of fewer than 10,000 people, and just 10 per cent. of the programme budget is spent on them. That suggests that, although a proportionate share of resources goes to predominantly rural districts as a whole, my hon. Friend is right that social housing is being built predominantly in market towns and larger communities. My hon. Friend the Member for Stroud (Mr. Drew) asked what we would do to support social housing, and asked whether we could use community land trusts. I agree with him that we have an important opportunity to support more social housing and shared ownership in smaller communities.
There are particular opportunities for the use of section 106 of the Town and Country Planning Act 1990, which the hon. Member for North Cornwall (Mr. Rogerson) mentioned. Nationally, 140,000 new homes were built in 2004. Of those, 100,000 were built with no developer contribution at all to either affordable housing or infrastructure. That is not fair. As a result, rural areas in particular can end up not getting their fair share of shared ownership and social housing. Our assessment was that if all rural communities could do as well as the best rural communities in getting resources out of section 106 and the planning gain system, there would be substantially more affordable homes being built in rural areas, and we particularly support that.
The hon. Member for St. Ives (Andrew George) raised the issue of second homes. The Financial Times asked me about the national approach, and we were talking about the national economy. The fact is that second homes account for about 1 per cent. of overall housing stock. There are plenty of rural and urban areas in which second homes account for less than 0.5 per cent. of housing stock. The reality is that the national housing market and the national affordability problem is driven by lack of housing supply, not by issues to do with second homes.
However, I recognise that in some areas second homes create particular pressures. Some communities do face particular pressures; we have always recognised that. We asked the Affordable Rural Housing Commission to look into that because we thought it such an important issue. However, the challenge faced by the commission is one that hon. Members have long debated in this House: it is the issue of what workable measures can be used to address the problem. That is difficult, but we have to recognise that there are broader issues, including the amount of affordable housing and new supply. We have to do something to challenge that problem across the country.
Charitable and Community Events
Mr. Hood, it is delightful to see you in the Chamber in a different context.
I am grateful for the opportunity to raise a matter that concerns a great number of people. I should like to bring to the attention of the House the way in which local police authorities invoke section 25(1) of the Police Act 1996 to charge charitable community events considerable sums for police cover. It puts scores of events at risk by making them financially unviable. In Devon and Cornwall alone, some 80 annual charitable community events, which are a vital and cherished part of community life, may disappear.
Section 25 of the 1996 Act states:
“The chief officer of police of a police force may provide, at the request of any person, special police services at any premises or in any locality in the police area for which the force is maintained, subject to the payment to the police authority of charges on such scales as may be determined by that authority.”
That provision replaced an earlier, identical section, section 15(1) of the Police Act 1964, which itself was based on common law established by Glasbrook Brothers Ltd v. Glamorgan county council in 1925.
Why am I concerning myself with a well established and historical police power? Until recently, the police did not exercise the power in relation to charitable and community events, but the varying attitudes of police authorities throughout the country have created an unequal and unfair playing field. Community events flourish in areas where police choose not to charge, while in others, community life grinds to a standstill as police price events out of existence.
The House needs no convincing about the benefits of such charitable and community events. They bring together communities, foster social cohesion, maintain precious traditions and enhance our cultural life through the hard work and dedication of altruistic volunteers who give up their time for the benefit of the community. However, the current legislation draws no distinction between charging for the charitable community event and the commercial profit-making event. It also provides no clarification of what constitutes “special police services” above and beyond what the police are obliged to provide as part of their regular service. It devolves the entire responsibility for setting the scale of charges to individual police authorities. Yet again, we see a postcode lottery. As in the health service, it is true of the police service.
The Notting Hill carnival escapes any charge whatever for a considerable policing cost that runs into hundreds of thousands of pounds, because the Metropolitan police do not charge for such community events, but the organisers of the Dart music festival in Dartmouth, which is minuscule in comparison, were whacked with an initial bill of £16,095.15. As a result of negotiations, the bill was reduced to £5,875, and finally, after further negotiations, to £2,742.35. I am not sure whether the role of the constabulary in Devon and Cornwall is not more like that of a car salesman. One haggles with the individual police inspector over how much one should pay for policing. It is not the way that I see policing, and the public do not want to see it continue either.
One would have thought that throughout the land, constabularies would wish to promote good deeds and community enterprise. At least the Metropolitan Police Commissioner recognises that each year the Notting Hill carnival has helped to cement good race relations and bolster good community spirit. In spite of massive police presence, he refuses to make any charge whatever to the organisers in London. What is wrong with the Devon and Cornwall constabulary? Why cannot it recognise the benefits to the community of events such as the Dart community festival, and soon the Dart regatta?
My hon. Friend’s excellent speech gives rise to two thoughts. First, does he agree that when one challenges police officers—local divisional inspectors in particular—about a charitable event such as the Hatherleigh carnival in my constituency, which was fixed with a bill last year, they are embarrassed about it? They find themselves in a terrible position—
I am most grateful to my hon. and learned Friend for attending the debate. If he catches your eye, Mr. Hood, I feel sure that he will be able to develop that point. The whole House would welcome hearing from him, as it always does. He highlights no more than an anxiety throughout Devon and Cornwall. The police have suddenly discovered that they have the powers, which are nothing new, as they have been available since 1925, to squeeze more money out of a hard-pressed community that already pays taxes, and pays council taxes to the police. Communities will be charged even more if they do anything socially useful.
The question may well be asked: will the police charge for antisocial behaviour? When they catch a group of young people, will they send them a charge, too? Besides a criminal charge, will there be a civil charge for the police time spent apprehending them? That would be the natural result of such thinking.
The assistant chief constable in charge of operations support in Devon and Cornwall constabulary said in a letter of 3 May to the Western Morning News:
“Every force in the country is obliged under the provisions of the Police Act 1996 to charge organisers of events for all additional services provided outside core policing. This is a national policy, and one that the force cannot opt out of.”
I am sure that the Minister has taken note of that last point. The Minister knows, as I do, that that is just not true. Section 25 of the 1996 Act simply enables the police to levy charges; it by no means requires them to. It is not mandatory; it is discretionary.
As the then Home Office Minister, the right hon. Member for Norwich, South (Mr. Clarke), subsequently Home Secretary, said in a written answer on 29 November 2000:
“The decision whether to charge for costs of policing at local events is a matter for the local police authority and the Chief Constable… Special police services are not defined in the 1996 Act or elsewhere. I would expect them to be services that meet some or all of the following criteria:
They are not part of the general duty of the police to keep the peace and protect life and property;
The service to be provided is on private land; and,
The service to be provided is for a commercially organised event.”—[Official Report, 29 November 2000; Vol. 357, c. 683W.]
Is it right that decisions affecting the future of at least 80 annual community events in Devon and Cornwall alone should be decided at the discretion of an unelected police authority? There have been a few important judicial decisions about the legality of charging for special police services. In May, two months ago, the Court of Appeal found against the West Yorkshire police authority, because there was no written contract prior to the services provided to Reading festival, which is a large profit-making event.
My concern is related to the operation of section 25 not in respect of large commercial events such as music festivals—Glastonbury, for example, has a £17 million turnover; it is a commercial event—or football matches, but in respect of the small, charitable, local, peaceful events that are an established and cherished part of the west country way of life. By their very definition, they do not have the resources to fight expensive legal battles that often hinge on obscure legal points. They are the quiet martyrs of the legislation. It threatens to wipe them out without recourse to appeal and without too much fuss.
I would like to believe that the relatively modest nature of such events is the reason why the Government have failed to notice the reprehensible approach to police charging which is creeping in throughout many parts of the country. We would certainly hear about it if the Met landed the Notting Hill carnival with a bill for hundreds of thousands of pounds. But small events such as the Dart music festival, or Widdecombe fair, which has been going for hundreds of years, can slip easily under the radar of the public, the media and the Government. This is in no way a reflection of their importance to the local communities and how beneficial they are to our culture.
I pay tribute to the Western Morning News, the regional organ of our area, which has taken up the cause wholeheartedly and exposed the number of shows, festivals and carnivals that face new charges for policing. Its excellent leader on 30 May pointed out that public support for the police is essential to help them uphold the law, and concluded that
“the force could do itself a great favour and win a great deal of public backing by announcing there will be no policing charges for such popular local events”.
I fear that the police are hitting at softer targets—events with limited resources but huge social, community and cultural benefits—to help pay for policing the real problems elsewhere. That is not the way to foster good community relations and is not a practice that should be allowed to continue on an ad hoc, incoherent and inconsistent basis.
I certainly do not wish to see every decision of the local police authority prescribed by central Government. I believe that it is absolutely right to keep decisions as close to the people as possible, and I am for creating real and genuine local accountability. However, I fear that local police authorities are proving far from accountable. I have still received no substantive reply to the three letters that I wrote to the chief constable of the Devon and Cornwall constabulary about the matter in April. That is not good news and does not foster good relations between Members of Parliament and the constabulary.
As a result of the tremendous impact that police charges are having and will have on charitable community events in the west country and the geographical disparity in applying the legislation, combined with the opaque decision-making procedures through which charges are applied and levied, I ask the Government to bring forward clear and fair national guidelines that will ensure that charitable community events across the country are not wiped out by surreptitious police charges.
Mr. Gary Streeter (South-West Devon) (Con): I congratulate my hon. Friend the Member for Totnes (Mr. Steen) on securing the debate, and thank him for allowing me to have two or three minutes to underpin his remarks and to raise one specific case, which is that of Yealmpton show, a show with which my hon. Friend will be extremely familiar as he used to represent the part of my constituency that comprises Yealmpton. It has been going on for well over 100 years and is a prime example of what my hon. Friend is talking about.
Yealmpton show is the biggest show by far in my constituency and on a good day, when the weather is right, it can attract up to 10,000 people, 20 per cent. of whom are children. It is run by a registered charity and all the work is done by hard-working volunteers. It is not profit-making and any surplus is given away to charity. Ironically, recently it gave some money to the constabulary widows’ and orphans’ fund, not knowing that it would receive a bill for this year’s performance.
Last year, the show made a loss because of bad weather. That is the sort of organisation that we are talking about. It is a day when people from the countryside and Plymouth come together and have a day of tremendous fun, which is exactly the kind of things we should be encouraging. However, this year the police have come to the organisers out of the blue and asked for payment to cover half of the cost of police engagement in the show. What does that engagement entail? It is not like Notting Hill carnival, where there have been riots and difficulties in the past. It is not about public order, but about a constable or two diverting traffic from the public highway into Yealmpton show field and carrying out ordinary police activities, which are obviously increased by the number of people using the field on a particular day. The show has been asked to pay nearly £2,000, which is money it can ill afford as a marginal activity.
At a time when the Devon and Cornwall constabulary should be seeking to make friends rather than enemies in our part of the world, there will be a huge public reaction, because the Yealmpton show is so popular, when the demand for payment is realised by my constituents. People in South-West Devon are entitled to ask what on earth they are paying their taxes for. If something like policing the show is subject to an additional charge, what are we paying for generally through our taxes for the police? I hope that the Devon and Cornwall constabulary will think again. Like my hon. Friend the Member for Totnes, I have written to the chief constable and still not received a reply. I hope that the constabulary will think again but, if not, I hope that the Minister will listen seriously to the case and take action that will cause the Devon and Cornwall constabulary to think again.
I shall raise two points. Hatherleigh carnival is an event that has been held for many years. It has a particular attraction as it is one of the few carnivals to have flaming tar barrels, which are wheeled down the high street in Hatherleigh. When I first heard about the flaming tar barrels, and when I went to see them, it caused me a degree of discomfort, but it is only when one goes to see them and inquire into how they are handled that one realises that at every stage the barrels are under the close and tight control of people who know exactly what they are doing and that there is no danger. The fire service is consulted every year, and there have been no accidents or injuries.
Last year, Hatherleigh carnival, which usually raises about £1,500 to £2,000 for charity, was suddenly fixed with a bill of about £1,500 to £2,000. That meant that my constituents would have nothing left to give to charity after they had paid the police force. The point that was made to me by my constituents and the organisers of the carnival was that that would deter people from participating in such important community events. They usually get involved because they know that the proceeds will go to charity. The chances of Hatherleigh carnival happening the following year were remote.
I am fortunate because there are an excellent number of local divisional inspectors and officers who, as I said to my hon. Friend the Member for Totnes (Mr. Steen) earlier, were embarrassed by their position. They found themselves caught between the community that they were trying, often with great care and diligence, to police and the ridiculous order that meant that they were required to charge a small, charitable event that encouraged the charitable activities of the community. With a degree of good will and negotiation, we managed to get that charge extinguished. Of course, the carnival now lives from year to year with the threat that that charge might reappear.
My constituents said to me, “How often do we use the resources of the police through a normal year? We barely see a policeman in our village communities.” Insult has been added to injury because not only are our rural beat officers and our neighbourhood beat managers fairly infrequently seen in rural areas, but they are now being withdrawn to be replaced by police community support officers. The rural communities in which such charitable events are, as has been said, at the very heart of community activity and feeling, are being deterred, disappointed and depressed, not only by the absence of police but by the fact that when they put on an event that takes a great deal of initiative and hard work, they find themselves charged for it.
It is a pleasure to serve under your chairmanship, Mr. Hood. I begin by congratulating the hon. Member for Totnes (Mr. Steen) on securing an important debate, not only for his constituents but throughout the country. I will mention some of the points that he raised about his locality, but to cover the terms of the debate I shall need to draw widely and broadly on issues across the country and raise a number of issues that might not be specifically relevant to his part of the world.
I also congratulate the hon. Gentleman on the way in which he conducted the debate and the measured tones in which he put forward his case. In addition, I congratulate the hon. and learned Member for Torridge and West Devon (Mr. Cox) and the hon. Member for South-West Devon (Mr. Streeter) on putting forward their points of view in support of their hon. Friend.
I understand the importance of the issue, because only recently I met the Showmen’s Guild. My hon. Friends the Members for Nuneaton (Mr. Olner) and for Chorley (Mr. Hoyle) raised issues about travelling fairs and so on similar to those that the hon. Member for Totnes raised about the Dart music festival. It is an issue across the country, and we are seeking to address it and to work with the police in dealing with it.
The hon. Gentleman makes a fair point. To a degree, I accept what he says. I was illustrating the fact that there is much debate about the matter in respect of commercial and community or charitable events.
Section 25 of the Police Act 1996 replaced a similar provision in section 15(1) of the Police Act 1964. Prior to those statutory provisions, the practice of lending constables has been recognised since the 19th century. There are three key elements to section 25. First, anyone may ask the chief constable of a police force to provide special services. Secondly, it is for the chief constable to decide whether or not to provide those services. In reaching a decision whether to provide services, the chief constable is likely to take into account the overall resources available and the impact of providing the special services on the policing that would otherwise be provided to the community. The third key element is that it is for the police authority to determine the scale of charges. In practice, most day-to-day decisions are likely to be delegated to the chief officer of the force.
Section 25 clearly requires a request for services to be made before the question of charging arises—an important point. The police cannot unilaterally impose a charge. In some cases the request may be made by a person other than the organiser or promoter of an event. For example, the owner of land on which an event is to be held may ask for special police services to be provided, and he may then pass on any policing costs to the organisers of the event.
Section 25 does not describe what constitutes special police services. From time to time, there have been disputes about whether particular services fall within the bounds of section 25 or of previous provisions. Judgments in court cases arising from such disputes provide the main guidance to the interpretation of section 25. A judgment was recently given in the Court of Appeal; the hon. Member for Totnes referred to that case, and I shall say more about it later. First, however, it may be useful to say more about the definition of special services.
The broad definition set out in case law is that special police services are those provided over and above the general obligation of the police to maintain law and order and to keep the peace. Examples of special police services include the provision of policing at football stadiums, at concert venues and at motor racing grand prix. In those examples, much or all of the policing service is provided on private property, and the courts have identified that as an important factor in deciding whether special police services are being provided.
Other events may involve the provision of some special police services. For instance, special police services may be requested for large-scale private parties or to provide an additional police presence at funfairs. No central record is maintained of the events for which charges are made under section 25. However, figures published by the Chartered Institute of Public Finance and Accountancy indicate that police forces in England and Wales received income of about £23 million from providing special police services in 2004-05. The hon. Member for Totnes may be interested to know that that is the latest year for which figures are available. That sum represents about one quarter of 1 per cent. of the net budgets of forces in England and Wales.
It is clearly sensible for the organisers of events at which special police services may be required to discuss the likely policing requirements with the police, in advance. It is evidently in the interests of all parties to reach a clear agreement about what services are to be provided under section 25 and what the cost will be.
As I said, those are matters for local negotiation. Clearly, if negotiations take place, the local police will have to make a judgment about what they think is appropriate, and they will have to take account of what is appropriate for general safety and for law and order in the area. I say again that it is for the local police to work with the local organisers of such events, and for them to come to an agreement prior to the event. Such agreements are made and adhered to in the vast majority of cases. As I said, we need to see good practice; we need to encourage people to come to agreements locally.
The police are approaching organisations that do superb work in the community and implying that if the organisers do not come to an agreement the police will block any request for an entertainment licence that may be applied for to run the event. That is not good practice; it is blackmail.
It is a matter for local negotiation. What I have to say about the guidance published by the Association of Chief Police Officers may help.
In 2005, ACPO published guidance on charging for police services. It provides forces with a common and comprehensive charging methodology. It reflects the association’s recognition of the importance of taking a transparent and consistent approach to such matters. ACPO recommends that forces should seek to harmonise their methodologies with the guidance over the three years following its publication in April 2005. It is therefore rather early to assess the impact of the guidance, but I would expect it to deal with some of the points raised by the hon. Gentleman.
The guidance was, at least in part, a response to criticisms of the diversity and inconsistency of approach taken by forces to charging and calculating the cost of services provided. The guidance does not mean that the cost of special police services will be identical at every apparently similar event. The cost of providing services will vary, in order to reflect the characteristics and requirements of particular venues.
For events to which section 25 applies, the guidance sets out an approach to calculating the full economic cost of services provided. That cost includes all pay and allowances for the officers involved, usually at overtime rates. It also includes pension and national insurance contributions and the cost of other overheads. As I said, I believe that the guidance will help tackle some of the issues raised by the hon. Gentleman.
In the time left to me, I shall say a little about the Dart music festival. The hon. Member for Totnes will know better than me that the festival brings a diverse range of musical entertainment to Dartmouth. I believe that it has been an annual event since 1998, and that it is enjoyed by residents and many visitors. I understand that 2006 is the first year in which the question of a charge for policing the event has arisen; that flowed from the constabulary’s wish to follow ACPO guidance.
The Devon and Cornwall constabulary advises me that the festival organisers discussed the programme with it ahead of the event. The constabulary identified a requirement for additional policing in Dartmouth during the three days of the festival over and above that normally needed on a Friday, Saturday and Sunday. The full economic cost of that additional policing was some £14,000. However, the force agreed with the organisers that only about £2,700 of the total related to special police services in respect of some additional police officer overtime.
I further understand that although the festival took place in May, the force has not yet invoiced the festival for that amount. The force is still considering whether the charge is appropriate. I believe that the matter is to be discussed by the hon. Gentleman and the assistant chief constable later this month. No doubt, what has been said this morning will help.
I congratulate the hon. Member for Totnes on securing this important debate, and I thank the hon. Member for South-West Devon and the hon. and learned Member for Torridge and West Devon for their contributions. It has provided an opportunity to consider matters that are important both to the police service and to the many organisers of commercial and community events.
Section 25 of the Police Act 1996 provides a useful enabling power. Through it, the organisers of events, or others with an interest, may request services that the police are able to provide that go beyond what they are obliged to provide as part of their ordinary duty.
Television Licence Agents
I wish to raise the issue of how the licensing authorities deal with those who choose not to own a television—or own one, but only to play videotapes or DVDs, not to receive broadcast material.
A TV licence is payable if a set is owned and used to receive broadcasts. The Government decide the proportion of the licence fee that goes to the BBC, which receives the fee in its entirety, as far as I know. For that reason, the BBC has recently been left to collect the licence fee, although the rate of the fee and the principle behind it is established by Parliament.
The BBC has chosen to contract out collection to a third party called TV Licensing, which is linked to Capita, the organisation that provides a range of public services for private profit on behalf of a number of agencies, including parts of the Government. My hon. Friend the Member for Bassetlaw (John Mann), who is here today, will be aware of Capita’s role in dealing with compensation for mineworkers.
TV Licensing has a code of practice on how to deal with collecting the licence fee. Among its harmless provisions is that it should be courteous to customers, and we all recognise that as an important part of any service agency. Unless it obtains a magistrate’s warrant, the organisation has no power to enter someone’s property without their consent to verify whether they have a TV or whether a TV is being used for receiving broadcasts.
To some extent, the organisation also propagates what is possibly an illusion about TV licensing vans. From childhood, I remember adverts featuring vehicles with discs on top of them that were supposed to identify where a TV was in operation; a man would knock on doors to pursue the matter. TV Licensing propagates the impression that such activity is a critical part of prosecuting those who choose not to pay for a licence, although, as far as I know, there has not been a case in which evidence from such a vehicle has been produced in court.
I shall be intrigued to hear what the Minister has to say. When such matters have been raised in the past, the Government have sought to suggest that responsibility for collection and policy is a matter for the BBC and not for parliamentary concern. Indeed, a previous Minister, my hon. Friend the Member for Rossendale and Darwen (Janet Anderson), said:
“It is for the BBC, as licensing authority, to keep under review the guidelines under which TV Licensing operates.”—[Official Report, 5 March 2001; Vol. 364, c. 87W.]
That is wholly inadequate; such activities are sanctioned by Parliament. The principle of having a licence fee to pay for broadcasting is sanctioned by Parliament, and to express no interest in how that fee should be collected is an inappropriate dismissal of responsibility.
We all recognise that some people who should have a licence choose not to pay for one. It is difficult to estimate how many such people there are, but it is reckoned that they make up about 5 per cent. of those who should have licences. All of us would accept that if we are to have a licence to pay for public service broadcasting, we should attempt to make sure that people do not freeload and receive such broadcasts for nothing.
I turn to the group whom I want to address in this debate. In our society, a small group of people choose not to have a television. They do so for a variety of reasons; for example, they may feel that the broadcast content is inadequate and that they do not want it. A small number of people have moral objections; only a couple of weeks ago, a constituent of mine told me that he does not wish to have a television because of his religious beliefs. It is not for us to be concerned about why someone should choose not to have a television; it is entirely for them to decide.
Until reasonably recently, an individual’s clear statement that they did not have a television was accepted by the licensing authorities. People were taken at their word. Presumably, it was subsequently decided for some reason that among those people were a reasonable number of liars, or people who were forgetful and changed their minds about having a television but did not apply for a licence, and that those people were a concern.
At the moment, the approach taken is to assume that every household has a television. The address database includes all addresses in this country. In some cases, it includes commercial addresses; mailings sometimes go out to industrial estates suggesting that TV licences are not being paid. The premises involved are not only domestic. The assumption that I mentioned is made, and there is therefore also an assumption that homes on the database that do not hold a licence must be breaking the law. That is backed at the moment by a further assumption that when someone, replying to a TV licence inquiry, says that they do not have a television or do not receive broadcasts, they are probably not telling the truth—or, at the very least, that the issue requires verification. An agent will knock on the door and ask to inspect the property to find out whether there is a TV.
It seems that there is an exception, which was raised by a constituent of mine. If someone is over 75, they are not obliged to pay for a TV licence. If they can show, by producing a birth certificate, that they are over 75, they are left alone. I suppose that we should be thankful for small mercies, although my constituent was very upset. I shall come in moment to the mail that is sent out. A relative of the elderly lady concerned contacted me to say that she had been very shocked to receive her letter. The licensing authorities graciously responded to me and said that they took my word, as a Member of Parliament, that the lady in question was over 75. They said that they intended to leave her alone. Their discretion on whose word should be taken as truth is interesting. Anyway, that small exception applies: the authorities will not persist with very elderly people.
The mailings sent out are offensive in a number of ways. I have a number of examples here, and unless I am a very unusual hon. Member, they are also drawn to the attention of other MPs from time to time. One common feature is that the envelope makes it perfectly clear what the matter is about. If the letter were put through the letterbox of a multiple-occupation block, it would be clear to all one’s neighbours that one was probably not complying with the law.
One letter states that TV Licensing officers would soon be visiting the address of the gentleman who wrote to me. Another one, perhaps jokingly, refers to the chance to own Britain’s most successful anti-detection device—there is a picture of a van with radio equipment inside—and to avoiding a knock on the door, risking a fine, millions sold, batteries not required, peace of mind guaranteed and so on. Ho, ho, ho.
However, if one is sharing a property with other people, such a letter gives the message that they might be a fiddler. If it goes to an ordinary household, it certainly gives a message to the postman who puts it through the letterbox that he is dealing with someone who probably is not complying with the law. The public disclosure of what the letter is about is offensive to many people.
The tone and accuracy of the correspondence are also offensive. Let me deal first with accuracy. The gentleman who wrote to me provided a selection of the 150-plus letters he received from TV Licensing at his address. He has made it clear repeatedly that he does not own a television and does not wish to own a television. To be fair, he does own a television but only for the purpose of playing tapes. Nevertheless, in law he is not required to pay for a licence. He received a letter that stated:
“After repeated reminders that this address is currently unlicensed”—
repeated reminders, certainly, but he had responded to them and made it perfectly clear that he was not obliged to pay for a licence—
“we have still had no response from you.”
The letter then draws attention to some of the penalties that may apply.
Another letter entertainingly states:
“On average, Officers from our Enforcement Division catch 70,933 people every year.”
The organisation achieves a remarkably precise average. In any case, I would be interested in public disclosure of exactly how well the activity is performed. The letter goes on to state that
“there is no record of a TV Licence at your address, and that you may therefore be watching or recording television programme services without a valid licence. If this is the case, you are breaking the law.
Enforcement Officers have been authorised by us to visit your address…to interview you under caution in compliance with the Police and Criminal Evidence Act 1984.”
To be honest, that might not appear aggressive to a highly educated, well-prepared individual, but to many people, waving legal penalties and saying that they may be interviewed under caution is extraordinarily aggressive, particularly if they have repeatedly made it clear that they are not obliged to pay for a licence in the first place. The process of recording who has said what and ensuring that the database functions as a source of information for pursuing those who have not paid for a licence clearly is not carried out satisfactorily or efficiently by TV Licensing.
What do constituents complain about? First, they complain that there is an assumption that they have a television. I suspect that they have to live with that, as the overwhelming majority of households in this country do have a television. The assumption is probably fair. People find it offensive because they choose not to have a television, but we must accept that it is probably reasonable.
People certainly object to the refusal to accept their word, and I have a great deal of sympathy with them. If a resident has made it clear that they do not own a television and that they will not own a television, the most that TV Licensing should do is to contact them, perhaps once a year, to ask if that is still the case. They should be contacted courteously with an appropriately phrased letter, not one that aggressively implies that they are probably breaking the law.
People do not like the aggressive tone of the letters. I gave some examples of the kind of tone that is used. Again, I sympathise with their concerns. They certainly do not like the public way in which that aggression is delivered. To package such letters in what are, in effect, open envelopes and indicate that people may be offenders is simply not acceptable if someone is carrying out a perfectly lawful activity and does not have to pay for a licence.
Lastly, we must consider the impact on someone who is elderly or disadvantaged in some way and who may readily become confused or made anxious by highly legalistic mail. Again, that is not acceptable.
What should we do? First, there are perfectly reasonable databases of names and addresses in the UK that are updated regularly. If there is no evidence of a change of occupier, a gentle and neutrally worded annual inquiry would be appropriate. If a person says that they have no TV, asking them to confirm that on an annual basis is reasonable.
Secondly, a response from the resident—as I said, in most cases my constituents do respond—should prompt a review of appropriate actions. A response to one of my constituents stated:
“This is an automatically produced letter and the wording may not be totally appropriate to your individual circumstances.”
It simply is not acceptable or reasonable for a company to send aggressive direct mail to an individual who has made their circumstances clear because it cannot be bothered to change its records. I hope for an improvement in performance in that respect.
Thirdly, correspondence should be private. It is not appropriate to use a variety of logos and messages on the envelope that indicate what is inside. Fourthly, I would like to know about the performance of the organisation. Does it provide a cost-effective means of collecting TV licence fees from people who have chosen not to pay? What is the BBC paying for this purpose, and with what result? I look forward to the Minister’s response.
I congratulate my hon. Friend the Member for South Derbyshire (Mr. Todd) on securing this debate. I appreciate not only from his remarks but from those of other hon. Members the effect that correspondence or a visit from officials of TV Licensing can have. They can cause anxiety to those who are affected, not least those who are legitimately paying their licence fee and may have been caught in the system.
However, it is important to put on the record the fact that licence fee evasion costs some £150 million each year. From the surveys and work that we have done with licence fee payers, the majority of the public—substantial numbers—have huge faith and trust in the BBC, but absolutely expect value for money. The sum of £150 million a year is substantial, and it is right that the BBC has a system to try to collect that money and drive down losses. My hon. Friend asked about performance, and I shall come to that.
To set out the Government’s position, we all must recognise the need for effective and efficient TV licence fee collection. In the charter review White Paper, we confirmed that we consider the television licence fee to be the best way to finance the BBC and that it should therefore remain the main funding source throughout the 10- year period covered by the corporation’s new charter. In keeping with the need to maintain the BBC’s independence from the Government, we have also confirmed that it will remain the responsibility of the BBC to collect the licence fee and to ensure that that is done in a proper, efficient and cost-effective manner.
On the efficiency of licence fee collection, enforcement has rightly been the subject of past scrutiny by the National Audit Office and the Public Accounts Committee, and we expect it to be the subject of further inquiries. The House of Lords BBC Charter Review Select Committee also stressed the importance of cost efficiency in the collection and enforcement of the licence fee, and sought improvement in that area.
The Government acknowledge that licence fee enforcement must take place in such a way as to maintain public support. Successive charter review public consultations have reminded us of the public concerns about the impact of the licensing system and the way it operates, particularly in relation to the elderly and low-income households.
My hon. Friend commented that the BBC collects television licence fees on behalf of the Government. That is absolutely correct, but it is not the same as saying that the Government are—to use his words—expressing no interest in how fees are collected. Parliament originally gave the BBC the responsibility for collecting licence fee revenue in the Broadcasting Act 1990, but endorsed that more recently in the Communications Act 2003, which contains additional safeguards in relation to the powers of entry. As television licensing authority, the BBC has a statutory responsibility for the administration and enforcement of the licensing system. With that goes the responsibility to establish appropriate procedures and guidelines for staff and collection agents.
It is not the Government’s responsibility to administer that, but of course we have a view on how that might be done if the system is abused. In the light of concerns such as those that my hon. Friend has expressed, we have included a provision in the BBC’s new royal charter to make the BBC Trust more directly accountable for the activities of TV Licensing than has hitherto been the case under the board of governors. Article 24(2) of the charter explicitly provides that the functions of the new trust will include ensuring
“that arrangements for the collection of the licence fee are efficient, appropriate and proportionate”—
and I emphasise “proportionate.”
We intend that that requirement should give a clear steer to the trust to take a close interest in the TV licence arrangements and satisfy itself that they operate in a way that is efficient, yet without seeming unfair or oppressive to those who come into contact with the system. There is a careful balance to be struck. One the one hand, the BBC as enforcing authority has a responsibility to ensure that every address that should have a television licence has one. On the other hand, it should not turn its back on significant evidence of licence fee evasion, which currently runs at around £150 million each year in lost licence fee revenue, the cost of which is ultimately borne by those who pay their television licence fee.
My hon. Friend asked about performance. The BBC has so far been successful in reducing the evasion rate, which stood at an estimated 4.6 per cent. in March 2006—around one in 20 households, which is still staggering. That was, however, down from 7.8 per cent. in March 2001. The trend is downwards, which is significant in terms of the many tens of millions of pounds of revenue that would otherwise be lost to the BBC or which would constitute an extra cost to be borne by everybody else who legitimately pays their licence fee. Given both the scale of the problem and the amounts of money lost, it is correct that a rigorous approach should be taken to maintain and improve on that record.
On the other hand, efficiency and effectiveness should not be seen in isolation. The public have a right to be treated with respect and fairness. It is an absolute prerequisite that that should be seen to be the case in order to ensure long-term support for the licence fee system. I am aware that concern has been expressed about TV Licensing enforcement officers visiting people in their homes or expressing an intention to make such visits, particularly when the person in question has already indicated that he or she does not have a television. However, home visits are not a new practice to combat evasion. TV Licensing has long made a point of making home visits to selected addresses for which it receives a declaration that no television set is in use.
The BBC indicates that the underlying reason for the home visit policy is the scale of false declarations. To give an idea of what we are talking about, in 2004-05 more than 50 per cent. of declarations received by TV Licensing that no television was in use were false. For that reason, the BBC has a policy under which TV Licensing now visits all addresses for which it has received such a declaration. The purpose of the visit is to identify genuine non-users of televisions, so that subsequent contact with them can be minimised.
If one considers the volume of licence fee evasion—£150 million a year—and the fact that 50 per cent. of declarations that no set is in use are false, the case for a rigorous procedure to stop licence fee evasion is absolutely justifiable. The fact that the figures are coming down suggests that the policy is working. As I have said, however, it matters that the procedure is fair and proportionate.
TV Licensing officials may enter a person’s home only with that person’s consent or if authorised to do so by a warrant issued by a magistrate, as my hon. Friend will understand. The BBC assures me that visits by inquiry officers follow a strict set of procedural instructions and take a matter of minutes. I understand that, following successful verification that no television is in use at the premises, the policy of TV Licensing is now to exclude the address from any further enquiries for an initial period of four years.
I also acknowledge the concerns about the tone of TV Licensing’s advertisements and letters of inquiry. Although the BBC has assured my officials that the contents of TV Licensing’s letters are not visible to a postman, it is clear that they come from TV Licensing, and I can understand that some recipients are unhappy about that. I also understand that it may sometimes appear that TV Licensing is out to pursue people who choose not to own a television set.
For the sake of clarity, it may be helpful to point out that an estimated 1.19 million households have a TV but no licence, as of March 2006. To give some perspective, that is twice the number of households with no television. In their duty to administer and enforce the television licensing system, the BBC and TV Licensing take the view that there is a clear obligation to all licence fee payers to investigate unlicensed addresses, to verify the status of the premises and establish whether a licence is indeed required.
I appreciate the need for TV Licensing to consider the individual’s privacy when corresponding, however. Although it is not for the Government to become involved in the day-to-day operation of the system, I will undertake to raise my hon. Friend’s concern about envelopes and logos with the BBC.
In conclusion, I hope that what I have said, especially my references to the obligations on the new BBC Trust in relation to the licensing system, will go some way to reassuring my hon. Friend that the Government are alert to the concerns that he has raised in this debate. We remain committed to the television licence fee as the basis for funding the BBC. That requires support for a collection and enforcement system that is efficient and effective; but that system must also be seen as fair and proportionate to those who come into contact with it.
I thank the Minister for his response, which has included some encouraging points, but the standard of administrative efficiency is poor. In the case of the 75-year-old to whom I referred, the letter to me said:
“We have found that a small number of addresses”—
I do not know what “small” might mean, bearing in mind the scale—
“have recently been sent a mailing in error. We had already been told that no TV Licences were needed”.
The difficulty is often with TV Licensing not logging what it already knows on its system.
If one looks at efficiency, one must consider the scale of the evasion and the BBC’s success in driving it down. Evasion is a serious problem that costs all licence fee payers considerable amounts of money in order to support those who do not pay their fair share. However, I am prepared to raise some of the issues that my hon. Friend has mentioned with the BBC. I remind him of the contents of the new charter, specifically the section that relates to the collection of the licence fee now being the responsibility of the trust. I hope that the trust will listen carefully not only to my hon. Friend’s speech but to the Government’s reply.
China Clay Industry
I welcome the opportunity to have this urgent debate on the devastating news that has hit mid-Cornwall, and particularly the china clay community, not just about some 800 direct job losses in Imerys, but about the loss of as many knock-on jobs and, significantly, the fact that china clay will no longer compete in a major sector of the market against overseas competition. This is not outsourcing, which has been behind many job losses in the past, but a real loss at the centre of one of Britain’s most impoverished communities.
My hon. Friend is right. Some commentators believe that this problem is identified directly with the clay industry in a relatively small geographical area. In fact, it will have huge repercussions throughout my constituency, which is adjacent to my hon. Friend’s, and will go wider into other sectors of the Cornish economy, much of which is fragile and at a critical point.
I agree. It is worth noting that this announcement has also led to the lowest morale that I can remember, not just in the clay industry, but in St. Austell and the wider community, including Fowey, Par docks and the other affected areas in my hon. Friend’s constituency. I hope that the Minister will be able to bring a glimmer of hope to that devastated community.
I do not intend to make any political complaint. It has been obvious for some years that there is a threat to the Cornish industry. Cheaply accessible reserves of clay are opening up in Brazil. Those are cheap not because of low labour rates, but because the clay deposits have already been washed out of the hard rock. I visited Brazil and saw that a digger and a lorry is all that is needed to produce clay there. Cornwall has been relatively protected because it is near the main paper markets and Brazil is a long way away. I shall return to that issue.
I thank the Minister’s colleagues at the Treasury, with whom I worked for some years to find a solution to the climate change levy, which has impacted on the clay industry. When I first raised that matter with Ministers in 2003, the levy had already taken £4 million out of the industry and raised energy costs alongside others that were already rising. The climate change levy was a clear threat to an industry in which 20 per cent. of costs are energy related and 80 to 90 per cent. of production is exported. I was pleased that Ministers acknowledged that the industry was potentially in the category that should have help with the climate change levy. There was a rather tortuous route to get help, but help has been put in place and, as a result, climate change levy costs for the industry have potentially been reduced by £1 million or so a year. The industry has also done a lot of work for itself, for example, by introducing combined heat and power plant before any grants from Government to do so and being innovative in reducing energy costs.
This is not a complaint about Government in any sense; it is a plea for help, particularly for Ministers to understand the scale of the impact in a tightly defined community. Sadly, the work done with Treasury Ministers and others to get the reduction in costs has not been enough, given the pressures on the industry from energy costs that have risen through the roof.
Figures given to me by Imerys during a meeting on Thursday, when I also met trade unions and local councils, show that over a three-year period its energy costs have risen from £15 million to £40 million per annum. That is a huge hit by any standard and is compounded by the dollar exchange rate. The low value of the dollar has increased the competitiveness of clay from Brazil, where both production and sales are in dollars, meaning that it is cheap relative to Cornish-produced clay. All those factors have hit the industry hard and the only protection for Cornwall has been the cost of bringing clay from Brazil, which is around £35 a tonne.
It is a significant, although not huge, factor that paper-coating clays sell for $120 to $140 a tonne. Imerys is now pulling out of that market, because that product is highly energy intensive to produce and not so protected from shipping costs, because of its high value. Imerys is saying that it will concentrate on filler clays, which are low value—the opposite of what is happening generally in manufacturing and other goods markets in the UK—and by selling at roughly £70 a tonne, the £35 a tonne shipping costs and low energy costs significantly protect Cornwall’s clays relative to Brazil. However, the company is still on edge. Later on, I shall mention help that the Minister might be able to offer.
It is interesting to hear the trade unions, which I met privately, and workers in the company say that there is low morale and great unhappiness with this decision by a French-based company. Nevertheless, there is a degree of understanding of the pressures faced by the industry and the strategy that it is pursuing. I thought that my meeting with the company on Thursday was likely to be preparatory to a pull-out from Cornwall on a fairly short-term scale. Imerys is making some major investment to try to ensure that the filler clays will continue, which makes sense strategically, but we need to be aware that this industry will not be in Cornwall in the lifetimes of those alive and working in the industry now. There is a limit to how far the clay can be worked economically. Only three years ago, the company’s statements were talking about a 40-year life; it is now talking about 20 years-worth of reserves, even if things go well. They may last longer than that—there are potential new reserves to work—but the future for the industry is rapidly contracting in an area where there is little other employment. That situation should be viewed in the context of measures that the company says will cut its operating costs by nearly a third. These are drastic reductions.
The clay company has said that there are 1,850 directly employed jobs left. Some reduction is already going on from a previous round of cuts, but another 800 jobs are to go. The company also confirms, as does the council, that because it will no longer be operating in this sector, the present reductions are not like previous ones, when much work was being outsourced. In this case, the outsource suppliers will be losing jobs on a large scale as well. A minimum of 800 job losses are expected on top of the ones already announced, so we are probably talking about a minimum of 1,600 jobs being directly affected by this decision.
I congratulate my hon. Friend on securing this debate and thank him for giving way. He mentioned the impact on the wider economy of mid-Cornwall and potentially the whole county. Does he agree that that will make it harder for the convergence funding that is coming to Cornwall to have an effect, given that the playing field has been lowered even further for people in mid-Cornwall, who will now have to work particularly hard to achieve any level of regeneration?
Convergence funding is important. We in Cornwall are fortunate to have objective 1 funding, which is the highest level of European support. That has been matched by the Government. We are the only place in the UK poor enough to get convergence funding, but there is a still a question about the match funding. It is difficult for the Government to put that in place quickly, but we urgently require some reassurance on that convergence funding matching from Government, which is important and even more difficult to find, especially when yet another private sector employer—the biggest one in Cornwall—is contracting.
The net effect of the china clay job losses impacts on nearly 7 per cent. of jobs in the travel-to-work area. The concentration in the clay villages is massive. Taking into account the direct and indirect effect of the job cuts, more than one in three of the 3,700 working households in the clay villages can expect one of their members to lose full-time employment. One in five clay village household jobs will go directly with the Imerys job losses. Within the clay communities, the impact is absolutely enormous. We are talking about between 20 per cent. and one third of all the employment in villages that are among the most deprived communities anywhere in the country and where employment opportunities are extremely scarce and, indeed, employment land has been extremely scarce up to now because of the clay workings themselves.
To put this in context, the Imerys jobs are relatively well paid. The incomes average £23,000 a year in a borough where local incomes average only £18,500 a year, so they are some of the high-grade jobs. Despite the fact that they are sometimes relatively low skilled and they are certainly very specifically skilled, they are full-time, mainly male jobs in an area that has very little else and where other jobs in the community are worse paid.
A study conducted a few years ago—so the figures are a little out of date—in St. Dennis, which happens to be the village I live in, showed that the average household income there was only £6,000 a year. That is one of the larger clay villages, so these are very poor communities indeed. Thirty-two per cent. of people in Restormel borough as a whole—the communities that we are talking about are the poorest communities, so the figure for them is likely to be even higher—have no skills, compared with an average in the south-west of 26 per cent., so there is a major issue about skills as well. The skills that people do have are mostly specifically orientated on clay communities.
The deprivation in these communities is among the greatest in the United Kingdom. We are talking about a community that is regarded as one of the poorest communities in Cornwall, which is poorer than anywhere else in England. We need to bear it in mind that the only really equivalent community is that in the Camborne-Redruth area, which lost its heavy engineering and is now the target of very high levels of Government support. If I can get one message across to the Minister, it will be that the fear in St. Austell and the clay villages is that we will end up in the same circumstances. Those of us from Cornwall remember the way in which the shops went from Camborne and the shops closed in Redruth—everything went. Only now, after huge investment, is the area showing signs of picking up.
In this case, we know that the clay industry will go over the next 10 or 20 years—whatever it will be—at best. We know that there are huge-scale job impacts now in villages that are best thought of as coal-mining villages—if the Minister is not familiar with clay villages, she should think of coal villages. We need the kind of support that coal villages received and we hope to receive it before the full impact is felt. The Minister may well say that at least this is not a closure; it is only a cutback. However, we know that closure will come in time, and right now the cutback is huge for what are very small communities.
The Minister may be aware of the closure at St. Mawgan on almost exactly the same time scale. RAF St. Mawgan is shutting. There, we are losing 920 military jobs and some 200 civilian jobs. It is the other half of the borough, but I know that many of those people are located in the clay villages, because it is that kind of employment. I meet all the time military staff working at RAF St. Mawgan and civilian staff. It is a relatively affordable area, a relatively low-cost area, so there will be an impact there, too. Some 670 indirect jobs associated with RAF St. Mawgan are also expected to go as part of the works happening.
We know that the Minister and other Departments will offer a package relating to training, skills and job seeking. That is one of the things that will come through the action force that will be set up. A taskforce involving the South West of England regional development agency, the Government office for the south-west, the county, the borough, the jobcentre and others is meeting now in St. Austell to consider the issue. I know that a lot of work will be going on, but if there are no jobs, there is a limit to what can be done. People cannot be retrained for jobs that do not exist.
In those terms, I also want to highlight the fact that Imerys is not the only clay company. In particular, Goonvean wrote to me only last year, expressing its concern about the impact of rising energy costs. I hope that we will not see the same effects on that company. It is a specialist company,—a niche supplier,—so it is a little more protected than Imerys. Nevertheless, there is an almost palpable concern that this issue runs right across the china clay industry at the moment.
What do we want? First, I am not optimistic that we can save any of these jobs. There is a clear reason for the changes, and the company is presenting a strategy to meet that challenge. Nevertheless, there is an ongoing threat to the remaining operations. I hope that it will be possible to look again at the energy costs facing the company. The company will be doing that. It is taking out the thermal driers, which is the most expensive end, but if the Government could do anything to help the company to work through the energy cost issue, that would be helpful. I know that there is a limit. Nevertheless, work with the company would be welcome.
Secondly and fundamentally, I have talked in the past about the support given to MG Rover when it shut during the general election. However, the impact of MG Rover closing, in a much, much larger community, was not, frankly, as big as the impact will be in clay communities. As I said, the best way to think of them is as coalfield communities. I hope that I can persuade the Minister to examine whether some of the support packages given to the coalfield communities can be offered to clay communities. That includes all the waste restoration issues. The company will have an obligation to restore some of the areas, but there are no obligations on the company to restore some of the older worked areas that are no longer being worked. It now looks extremely unlikely that those areas will be worked again.
We need the Government agencies—the Government office for the south-west, the regional development agency, the county council and Restormel borough council—to work together through a 20-year strategy. Some of that work will already have been initiated. Clearly, it must be brought forward now, and the 20-year strategy has to include the process of working out what the future is for employment in the area, what the Government can do to help that, and what can be done to bring it forward. Clearly, waiting is no longer an option.
I hope that the Minister will look again at the A30-St. Austell link road: the A391. That has just been deprioritised by regional government’s recommendations to the Department for Transport. It said that it is not a regional priority, so it is unlikely to happen in 10 or 20 years. That link road is proposed specifically to help to facilitate economic regeneration in St. Austell. I know that it is not directly the Minister’s responsibility, but I hope that she can say today that she will talk to her colleagues at the Department for Transport about it. Clearly, the decisions taken at regional level by the regional assembly on the issue do not really apply in the current circumstances. I hope that Ministers will consider the proposal in terms of the specific needs of the community.
I hope that we can also have an assurance that in terms of Government funding—I talked about match funding for objective 1—there is potential for investment in a range of ways in the community. I am thinking particularly of the closures at Par docks. The complete cessation of use of those facilities by the clay company opens up a big opportunity for marine-related industries or other kinds of development. It is important that the Government work through that with the local councils to ensure that it is based on employment opportunities, not simply a quick profit for developers. I hope that the Minister will ask officials to work with the company and the local councils to ensure that any land disposals and asset disposals take place in the context of job regeneration, rather than a quick payback to the company. The company has given some reassurance on that, but it is easy to say it; it is often harder to do it in practice. We need employment opportunities to come out of these events. I hope that the Minister will work with colleagues to seek to ensure that we can have some reassurance about the match funding needed for the next round of European funding.
There is no underestimating the impact of these events in the communities affected. We really ask just two things of the Minister, and these are the biggest points of all. First, we must not wait for absolute catastrophe in order to start prioritising the St. Austell and clay village area in the same way as the Camborne, Redruth and Poole area is the subject of some prioritisation at the moment. That will require a change in policy to be made by the regional development agency and by Government, but it is important that we do that now, rather than waiting for catastrophe to strike.
Secondly, we ask that the Minister give some reassurance to the community that she is aware that the impact of what is happening is far bigger than it may seem on paper to a Government who are used to dealing with thousands of jobs. In the community in question, one in five households is set to suffer a direct loss of full-time employment, and the number is probably one in three when the knock-on effects are taken into consideration, even without RAF St. Mawgan. That is a very big impact.
I congratulate the hon. Member for Truro and St. Austell (Matthew Taylor) on securing the debate so quickly after the news that we received towards the end of last week. I am very conscious of the importance of the china clay industry to Cornwall, and to his constituency in particular. I understand entirely the disproportionate impact that such events can have, especially in a rural constituency. I know the area quite well and have been there a number of times, with various ministerial hats on, to try to tackle some of the problems with employment opportunities—particularly, in the first instance, when the tin mines were closed. I know that such closures create devastation for individuals, families and communities, and we all need to work together to ensure that we build a sustainable future by way of jobs for people who live there.
My analysis of the future of the china clay industry is the same as the hon. Gentleman’s, but I am not as pessimistic as he is. We should grasp the opportunity of the £25 million that Imerys is putting in to maintain a presence in the area, and work with the company. We shall do that—probably through the regional development agency, which is our vehicle for ensuring delivery of many of our tools of support to companies. However, we will work hard to ensure that we do the most that we can.
It is an important point; I do not want to give the impression that I think the company is about to pull out overnight. I think that it has a strategy in place, and I hope that that will retain jobs, but there is a limited resource. The company is under continued pressure. However, I agree that it is important, for the sake of morale, for the community to understand that there is work, and to try to preserve the 1,200 jobs that remain.
As the hon. Gentleman knows, we have established the taskforce, and I and other Ministers will be examining its work. That provides immediate support to the individuals affected and their families, and provides retraining. I hope that it will be able to organise some job fairs and similar events, such as we have used elsewhere in comparable circumstances, to try to link individuals who have just lost their jobs with employers in the region who have vacancies to fill.
I am conscious that I have little time to answer the hon. Gentleman’s questions. The Cornwall economy is one of the poorest; for that reason it always gets access to many of the European funding mechanisms that are available, in recognition of the challenges that it faces in sustaining jobs and developing enterprise and growth. However, figures are much better than they used to be. The growth rate for 2002-03, with respect to total gross added value, shows that Cornwall added 6.8 per cent., outperforming the rest of the UK by 5.5 per cent. and outperforming all other objective 1 areas, where the average was 5.9 per cent.
Employment has grown in Cornwall since 1999, although, interestingly enough, it is a depopulating area, and many of the traditional jobs have gone. Clearly, new industries are settling there. Other key initiatives are important. One of those is the combined universities in Cornwall, which I was involved in helping to establish when I had responsibility for higher education. The hon. Gentleman spoke about new marine-related industries, for example. If the right relationship can be established, involving the university and its research capacity, and if ideas arising from that knowledge and research development can be translated into practical enterprise opportunities in the locality, that will be the best way to ensure sustainable long-term job opportunities in the area. I always saw that combined university development as central to the attempt to regenerate.
We all take great joy in visiting such places as the Eden project or Tate St. Ives. The Eden project now employs up to 600 staff during its busy period. I hope that the hon. Gentleman accepts that that is a positive development in the area. We reckon that it brings about £100 million of local economic benefit. I understand that there is also a major redevelopment project in St. Austell.
Yesterday I announced the new map for assisted area status. Cornwall has full status and will also benefit from full convergence funding. I hear what the hon. Gentleman said about match funding; it is down to the local players—the regional development agency and the local authorities, including the county council—to look for that match funding, but they, and the RDA in particular, have the necessary resources and I hope that those concerned will benefit from them. If the hon. Gentleman has a problem, he should come back to me about it. Substantial resources are thus available in the area in question, and assisted area status, for example, could be of help to the company if it has a sustainable project. Perhaps the company should work with the RDA to see whether, on matters such as energy costs, a proper case could be put, through assisted area status, for state aid to support its continuing endeavour in the area.
Many of the issues that the hon. Gentleman has raised are now dealt with locally. We have decentralised, and his party should be in favour of that. I was surprised—it was news to me—that the A391 had been deprioritised locally. I had seen it as a quite important way to open up those very poor communities to job opportunities. It is a decision that has been taken regionally, however, and I am in some difficulty. I do not mind talking to my colleagues in other Departments, but if it has become a lower regional priority, that is difficult for us at the centre to override.
It is a matter in which the region advises, but Ministers dispose, so the Minister’s colleagues at the Department for Transport take the decision. Also, the issue has arisen in the consultation exercise at regional level. I hope that the Minister will raise it. We shall have a much better idea by the time Parliament returns in the autumn, and perhaps the Minister will be willing then, if we feel the need, to meet local representatives if issues need to be dealt with.
I am certainly happy to meet representatives, and I undertake to do so. I also undertake to write to my colleagues in the Department for Transport, if that decision was taken before the Imerys redundancies. I completely understand, also, the impact of the supply chain in relation to jobs. However, land and asset disposal are really matters for the locality, through the RDA and the relevant local authorities. It is not a matter for Government, and I urge the hon. Gentleman to work closely with those bodies, as I am sure he already does.
The hon. Gentleman asked me to show an understanding of how devastating the impact of the closure is locally. I understand totally, and tried to express it last week in the responses that I gave to the situation. Our job, in working with the hon. Gentleman and all the relevant agencies locally and nationally, must be to give the area a future, and to close the gap in prosperity and job opportunities that still exists across England. It is our intention and policy aim to tackle that gap.
Question put and agreed to.
Adjourned accordingly at one minute to Two o’clock.